HDB tightens rules for transfer of flat ownership

Previous rules allowed some to avoid paying ABSD; 
transfers now granted only under special circumstances

4 May 2016

Housing Board flat owners who wish to transfer their ownership to a family member are no longer allowed to do so except under six special circumstances including divorce and financial hardship.

Previously, owners were not bound by such restrictions when transferring their flat to a spouse or immediate family member.

Having done so and given up their ownership, HDB dwellers could then purchase a private property without incurring the Additional Buyer's Stamp Duty (ABSD).

This duty of 7 per cent of the purchased property price applies to Singaporeans buying any second residential property here.

Under newly tightened regulations which took effect on April 1, changes in flat ownership are allowed only on grounds of marriage, divorce, death of an owner, financial hardship, renunciation of citizenship and medical reasons, said an HDB spokesman yesterday in response to queries. This would include those who need help from family members in servicing the mortgage, or who have a chronic illness and wish to bequeath the flat.

She stressed that HDB did not make the change to target the loophole that allowed buyers to avoid paying the ABSD, but as part of a regular policy review. Those who do not fall under the new guidelines will be reviewed on a case by case basis.


Property observers said flat transfers done to avoid the ABSD have been an open secret and a common practice in the real estate circle.

Termed as "decoupling", it often involves one spouse legally giving up his or her co-owner status to become an authorised occupier.

"Agents were going around teaching people how to do this and it was all above board," said Mr Chris Koh, director of estate agency Chris International.

The practice caught on after January 2013, when Singaporeans had to start paying ABSD from their second property, instead of the third, as a measure to cool a heated market.


On average, about 6,000 applications for ownership transfers were approved each year from 2012 to last year, mainly due to marriage, divorce, death of an owner and financial hardship, HDB said.

R'ST Research director Ong Kah Seng said the latest move by HDB would help ensure that buyers are not financially overstretched.

Real estate lawyer Lee Liat Yeang, a partner at Dentons Rodyk & Davidson LLP, agreed.

"Decoupling is not all that rosy. It may not be easy for a single income to support a loan for a private property," he said. "It could also be the seed of future dispute as you are selling off your interest in the flat."

Mr Koh noted there is a considerable transfer fee and the spouse left with the flat would have to pay the other's Central Provident Fund mortgage instalments with interest.

While the Government said as recently as last month that it is too early to unwind property cooling measures, experts said it might be time to consider easing the ABSD.

PropNex Realty chief executive Ismail Gafoor said: "A second property should not be seen as excessive and Singaporeans should not be penalised for it."




Property Review SG