Singapore EC (Executive Condominium)
Singapore EC (Executive Condominium), are a type of housing in Singapore. First built in 1999, EC is a hybrid of public and private housing developed to meet the housing aspirations of the growing number of graduates and young professionals. They are strata-titled apartments built by the private sector and has similar facilities to a private condominium that are enclosed within a gated compound with security, amenities like swimming pools, clubhouses, playgrounds and so forth. They are to be built and put on sales by private developers, but at a price considerably lower than private homes because the development land prices are subsidised by the Government. Additionally, buyers can take Central Provident Fund (CPF) grants of up to $30K (T&C apply) to pay for an EC bought from a developer.
Buying a Singapore EC (executive Condominium) is subject to some regulations that apply to HDB flats.
Buyers’ Gross household income must not exceed $16,000, in order to qualify for an Executive Condominium. This limit was raised from the previous $14,000 in 11 Spetember 2019.
For direct purchases from a developer, there is a minimum occupancy period of five years; during which the EC cannot be sold or rented out whole. After five years, the EC can only be sold to Singaporeans or Singaporean Permanent Residents (PRs). When the development reaches ten years old, EC can be sold to anyone including foreigners.
In December 2013, HDB announced that Executive Condominiums will now be subjected to the Resale Levy. This is a lump sum payment made to HDB when you purchase a second subsidized home. However, this only applies to ECs whose land sales were launched on or after 9 December 2013. At present there are still a few ECs available that are not subjected to the Resale Levy.
Guide To Owning An Executive Condominium
Setp 1. Eligibility Conditions & Schemes
1. Citizenship & Age
To qualify, all applicants need to be at least 21 years old (35 years if you’re applying under the Joint Singles Scheme). One of you must also be a Singapore Citizen, with at least one other applicant being either a Singapore Citizen or Permanent Resident.
2. Income Ceiling
Your combined gross monthly household income cannot exceed $16,000, plus, you’ll be required to fall under one of the following HDB eligibility schemes:
- Public Scheme
- Fiancé/Fiancée Scheme
- Orphans Scheme
- Joint Singles Scheme
- Other Bars to Ownership
3. Public Scheme
You, the applicant and Your spouse, and children (if any)
- Your parents, and siblings (if any)
- Your children under your legal custody, care and control (for widowed/ divorced)
You, the applicant and your fiancé/fiancée
You, the applicant and;- Your unmarried siblings, or
- Another single unrelated orphan
6. Joint Singles
You, the applicant and another single person (both to be of minimum age of 35 years old)
(Note *You may buy a dual-key EC units if you form a multi-generation family as follows:
- Married couple with parents/grandparents
- Fiancé and fiancée couple with parents/grandparents
- Widowed/divorced with children and parents/grandparents*
7. Special Requirement for Undischarged Bankrupts
Undischarged bankrupts need to seek the Official Assignee (0A)’s consent if they are applying for an EC However they do not need to seek the OA’s approval to be listed as an occupier.
8. Other Bars to Ownership
You’ll also be prevented from purchasing an EC if you or your co-applicants:
- own non-HDB property (overseas or locally), or have disposed of such property within the last 30 month.
- own/have owned more than 1 of the following: (i) flat bought from HDB; (ii) EC/DBSS flat bought from a developer; or (iii) HDB resale flat bought with a CPF Housing Grant
- haven’t met the *minimum occupation period on your current subsidised flat*. If it’s an executive condominium, you’ll need to wait a further 30 months from its date of disposal, before you can apply for a new one
- are a divorcee – for 3 years from the date of divorce, only 1 party of the divorce can own a subsidised flat
- have previously cancelled an HDB application or terminated the Sales & Purchase Agreement (S&P) for a DBSS flat/EC using a CPF Housing Grant, in which case you’ll be barred for 1 year or 5 years respectively.
(*Minimum Occupation Period of 5 years period (excluding any period of subletting of the whole flat) has lapsed from the **date of taking possession of the flat to the date of application for a new EC)
(** The date of taking possession refers to following dates (whichever is applicable):
- Date of key collection, for flats that are bought direct from HDB
- Date of resale completion, for purchase of resale flats from the open market bought with the CPF Housing Grant
- Date of transfer at market value of the flat bought with CPF Housing Grant
- Date of key collection for EC/DBSS flats bought from the developer)
9. Essential Occupiers
You or any person listed the application must not be currently listed as an essential occupier of:
- An existing HDB flat bought directly from HDB,
- A DBSS flat bought under the CPF Housing Grant Scheme, or,
- A resale flat bought under the CPF Housing Grant Scheme
However, an essential occupier may apply or be included in an application only if he has stayed in the existing flat for 5 years from the *date of taking possession of the existing flat to the date of application for an EC.
* The date of taking possession refers to:
- The date of key collection, for flats that are bought directly from HDB
- The date of resale completion, for purchase of resale flats from the open market bought with the CPF Housing Grant
- The date of transfer at market value of the flat bought with CPF Housing Grant
- The date of key collection for Executive Condominium/DBSS flats bought from the developer, whichever is applicable.
Within three years from the date of the divorce, only one party in the divorce can own one of the following housing units:
- a flat bought directly from the HDB
- a DBSS flat / EC bought directly from a private developer
- a resale flat bought from open market under the CPF Housing Grant Scheme
If you have an existing matrimonial home, which is one of the above, and that home is retained by your ex-spouse, you may apply to buy or be listed as an essential occupier in any of the above housing unit only three years after your date of divorce.
However, this three-year wait out period will not apply if you are buying any of the above homes with your parents or a new spouse, or if you are buying a resale flat from the open market without the CPF Housing Grant.
If there is no matrimonial home or the matrimonial home was bought from the open market without any CPF Housing Grant, you may apply for any of the above housing units after you get your ex-spouse’s consent not to own or be listed as an essential occupier in any of the above housing units within the three-year period from the date of divorce.
The requirement for ex-spouse’s consent is waived if you are buying any of the above housing units with your parents or a new spouse or if you are buying a resale flat from the open market without the CPF Housing Grant.
The requirement to seek ex-spouse’s consent during the three-year period from the date of divorce is also waived if you meet the following conditions:
- All your children are below 18 years old at the date of divorce; and
- You have the legal custody of all your children and are also the only parent with the care and control of all your children.
STEP 2: GET YOUR FINANCES IN ORDER
Now that you’ve determined you’re eligible to buy an executive condominium, it’s on to the trickier question: can you afford one?
Focus on evaluating your financial situation so you know what you can afford. Buying a home isn’t just about the purchase price; there are other costs and taxes that you need to factor into your decision.
If you’re in need of some guidance, SMS /Whatsapp “EC-Qualification” <Name> <Email> to (+65) 90624481 for an appointment for a no obligation consultation on qualification and evaluate your financing status.
Get an Approval-in-Principle (AIP) for a bank loan
Approach a bank and get yourself an AIP – that’ll set out how much the bank will loan you, and your monthly mortgage payments.
Your loan’s going to be subject to regulations like Total Debt Servicing Ratio (max. 60% of income) and Mortgage Servicing Ratio (max. 30% of income), so depending on your existing loans and lines of credit, your total loan might be lower than you expect.
Pro-tip: not all banks offer the same deal, so shop around to get a package that works for you.
Check your CPF Funds
If you intend to use your CPF Funds, log into your CPF Account via their website to check how much you’ve got in your account.
For your first property, you should be able to use all the savings in your Ordinary Account up to the Valuation Limit (which is the lower of the purchase price or the value of the property at the time of purchase).
But if it’s your second or subsequent property, you’re required to set aside at least the current Basic Retirement Sum (presently that’s $83,000) in your Ordinary Account and only use any savings in excess of that.
Consider miscellaneous fees and resale levy
Unfortunately, you won’t have the option of an HDB loan if you’re getting an executive condominium, so you’ll have to secure a loan from a bank.
You can use your bank loan to cover, at most, up to 80 percent of your purchase price. Legally, you must pay for at least 20 percent of the property (referred to as the down payment) in a mixture of cash or CPF savings (this includes a 5 percent Option Fee and a 15 percent Exercise Fee).
Not only that, you should factor in incidental costs like legal fees and Buyer’s Stamp Duty (BSD), all of which can come up to quite a sizeable sum.
Let’s take the example of a property worth $600,000. You can expect to pay:
- Option Fee (5%) : $30,000
- Exercise Fee (15%) : $90,000
- Buyer’s Stamp Duty : $12,600
You can use your CPF savings to pay these costs, but if you don’t have enough to cover the total amount, you’ll need to pay the balance out of pocket.
Be warned that if you’ve previously purchased a flat from HDB, or received a CPF Housing Grant, you may also have to pay an additional resale levy of $55,000 when purchasing your new executive condominium.
Also, if this isn’t your first property, or you’re a Singapore Permanent Resident applicant, you’ll be liable to pay an Additional Buyer’s Stamp Duty as well.
STEP 3: SHOP AROUND
Finally, it’s the fun part.
Go on to HDB’s website for a list of all available and upcoming executive condominiums.
Shortlist the ones you’re interested in, contact a licensed qualified real estate professional to get more information about the flat. Unlike regular HDB flats, an executive condominium is bought directly from the developer, not through HDB. Executive Condominiums are sold in the market via real estate agencies appointed by Developers and marketing are trained to manage and assist keen and qualified buyer in application process.
STEP 4: SUBMIT YOUR APPLICATION
Singapore EC are normally officially launched in the open market by developers in co-operation with appointed real estate agencies.
Qualified buyers are required to make an electronic application known as an eApp and usually prior to official launch, e-application can be done via appointed real estate agents prior to official launch to manage mass amount of public interest.
This by no means obligates you to purchase the flat; it’s more a registration of your interest.
The benefit of completing an eApp is that when the development is officially launched, you’ll be given priority to view the mocked up show flat and book a unit.
First or Second-timer applicant?
First-timers enjoy privileges and priority in flat allocation.
Yours will be treated as a first-timer application if you and any of the other listed owners and essential occupiers meet the following criteria:
- Not the owner of a flat bought from HDB, or an EC/ DBSS flat bought from a developer
- Not sold a flat bought from HDB, or an EC/ DBSS flat bought from a developer
- Not received any CPF Housing Grant for the purchase of an HDB resale flat
- Not taken any form of housing subsidy (e.g. benefitted under the Selective En bloc Redevelopment Scheme (SERS) or HUDC estate privatisation)
If you are a second-timer and your spouse/ spouse-to-be is a first-timer, you will be glad to know that you and your spouse/ spouse-to-be will enjoy first-timer privileges and priority as a couple.
Yours will be treated as a second-timer application if any of the following applies to you or any of the other listed owners and essential occupiers:
- Have owned or sold any of the following:
- HDB flat bought from HDB
- Resale flat bought using a CPF Housing Grant
- EC/ DBSS flat bought from the developer
Once taken some form of housing subsidy (e.g. benefitted under the Selective En bloc Redevelopment Scheme (SERS), HUDC estate privatisation)
STEP 5: BOOK YOUR FLAT
On the development’s launch, applicants who submitted eApps will be invited to an exclusive opportunity to view the show flat and book a unit if they wish to.
The developer may choose to do this by way of ballot such that applicants are invited to view and may book in order of the ballot number or thru balloting on day of preview launch. Buyer balloted with early queue have the greater the choice of units and the higher chances of getting the unit of your choice.
Prior to attending the balloting exercise, you might want to have a few shortlisted units in mind, just in case your first few choices get snapped up by those ahead.
Once that’s over, the launch is officially open to the general public.