Upon reaching your 5 years Minimum Occupation Period (MOP), you decided to sell your BTO HDB. What's next?
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Assumptions we make:
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Cash proceeds of $300,000
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Combined CPF OA available for use is $200,000 ($100,000 each)
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Both Husband and Wife are 35 years old
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Both Husband and Wife earn a combined income of $10,000 ($5,000 each)
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Both Husband and Wife have a monthly CPF OA contribution of $1,100
In this article, we explore 4 options:
Option 1: Buy Resale HDB ($750,000) using Both Husband and Wife as Owners
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CPF OA used as downpayment: $182,900
Buyer Stamp Duty (CPF): $17,100
Cash used as downpayment: $150,000
HDB Loan*: $417,100
Monthly Installment: $1,892
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What's good:
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Affordable monthly installment which can be fully covered by the both owner's monthly CPF OA contribution
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Balance cash proceeds from sale of the BTO HDB of around $150,000 which can be put towards renovation, savings or other investments
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What's bad:
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After the 5 years MOP, subsequent property purchases will incur Additional Buyer's Stamp Duty (ABSD)
Option 2: Buy Resale HDB ($650,000) using Either Husband and Wife's names as Owner and the other as Essential Occupier
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CPF OA used as downpayment: $84,400
Buyer Stamp Duty (CPF): $14,100
Cash used as downpayment: $297,496
HDB Loan*: $263,104
Monthly Installment: $1,194
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What's good:
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Low monthly installment which can almost be fully covered by the Owner's monthly CPF OA contribution
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Essential occupier is able to purchase a private property after the 5 years MOP without incurring ABSD
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What's bad:
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The Essential occupier's CPF cannot be used towards the flat purchase or servicing of the housing loan
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All cash proceeds from the sale of the BTO HDB is used up
Option 3: Buy Resale Condo ($1,200,000) using Both Husband and Wife as Owners
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CPF OA used as downpayment: $167,400
Buyer Stamp Duty (CPF): $32,600
Cash used as downpayment: $100,000
Bank Loan: $900,000
Monthly Installment: $3,746
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What's good:
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Balance cash proceeds from sale of the BTO HDB of around $200,000 which can be put towards renovation, savings or other investments
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Get to enjoy full condo facilities
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What's bad:
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Higher monthly installment which cannot be covered by both owners' monthly CPF OA, monthly cash top-up of $1,546 is required
Option 4: Buy New Launch Condo ($1,400,000) using Both Husband and Wife as Owners and Rent while waiting for TOP
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CPF OA used as downpayment: $159,400
Buyer Stamp Duty (CPF): $40,600
Cash used as downpayment: $200,000
Bank Loan: $1,050,000
Progressive Payment (first 2 years): $331 - 2,317
Rental expenses: $3,000
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What's good:
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Balance cash proceeds from sale of the BTO HDB of around $100,000 which can be used towards rental
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Lower monthly installments for the first 2 years due to progressive payment for new launch
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Potential capital gains upon sale at TOP
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What's bad:
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Monthly installments will be much higher when nearing to TOP, coupled with the rental expenses
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We started our own home buying journey more than 7 years ago. Through our own home buying process, we know that it can be an exciting yet challenging process.​
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We understand that everyone's circumstances and objectives are different so we offer a customised solution for each of our buyers. Our consultancy service combines the use of data and our years of experience to walk with you through your home buying journey.
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Let us meet up for a more detailed financial calculation for you!