Tuesday, 10 December 2013

Singapore Refining the Executive Condominium Housing Scheme 09 December 2013

Singapore Refining the Executive Condominium Housing Scheme 09 December 2013

The Government will execute three measures for Executive Condominium (EC) developments to bring the terms for ECs closer to that for public housing, and assist support a steady and lasting EC market. This complies with a review by MND on the EC Housing Scheme, thinking about feedback from the Our Singapore Conversation on Housing.

A. Reduce EC Cancellation Fees

1. First, Government will reduce the cancellation charges for ECs from 20 % to 5 % of the purchase price. This will certainly ease the monetary trouble of customers who need to cancel their EC bookings after signing the Sale & Purchase Agreement. The new cancellation cost will certainly be put on EC land sales which are released on or after 9 Dec 2013, consisting of those where the tenders have not closed.

2. The cancellation cost for ECs is presently set at 20 % of the purchase price, just like those for private real estate. Nonetheless, unlike purchasers of private housing, buyers of EC units could not sub-sell their units if they could not complete their purchase, and have to pay the cancellation cost. This has specifically enforced considerable monetary problem on young couples that consequently are not able to proceed with their marital relationship and thus the EC purchase.

3 Government will therefore match the cancellation cost for EC units with that for HDB Build-to-Order (BTO) flats, and reduce them from 20% to 5% of the purchase price.

B. Resale Levy for Second-Timer Applicants

1 Secondly, Government will certainly now require second-timer applicants that get EC units directly from property developers to pay a resale levy, like second-timer applicants that purchase BTO flats. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.

2 Currently, second-timer applicants who buy EC units directly from property developers gain from the lower EC prices which came from the initial eligibility and ownership restrictions imposed on EC purchases. However, they do not need to pay a resale levy. The payment of Resale Levy for second timer applicant to EC is an alignment of treatment with second-timer applicants who buy BTO flats and thus will ensure greater parity.

C. Revision of Mortgage Loan Terms

1 Thirdly, the Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by banks for EC units bought directly from property developers at 30% of a borrower’s gross monthly income. This is in alignment with the earlier measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages EC buyers from over-stretching their finances and supports an affordable and sustainable EC market.

2 The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 Dec 2013.

For further enquiries on any of the above measures, the public can contact the HDB Sales Customer Service Line: 1800-866-3066.

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