If you own an existing HDB property in Singapore, you are free to sell it in the open market once the MOP ends after five years. After the MOP expiry, most HDB flat owners express aspirations to settle in more stylish housing units such as Executive Condos (ECs) or private condos.
This is where MOP upgrade experts can step in with help and the right advice. They can solve the challenges like selling HDB buy condo plans and also explain ways for HDB to upgrade to a condo. The MOP mandate BTOs and DBSS is 5 years. But MOP will vary for different types of flats under various other schemes.
There are different reasons why a family wanted an upgrade after the MOP term ends. That is why the MOP upgrade adviser will seek to know the specific reason for the transition plan from HDB to Condo. Some will be looking for a more convenient location suiting their work and proximity to education facilities where as many others would love to upsize because of a growing family.
However, on the economic front, the main compulsion will be to cash out on the existing housing property and invest in more attractive options that would appreciate further. Once the specific reasons for the upgrade are available solutions will be offered by the consultant on how to go about it.
However, the most important part is to do an assessment to confirm if you can afford a new Condo from the available resources of the potential sale and cash proceeds. Also, make sure your financial position is stable for a possible cash top-up for the next purchase.
Now let us look at the upgrade options after MOP where you want to sell the HDB flat. In this scenario, there are 4 major options to avail.
Buy Condo first sell HDB later
Sell HDB now and buy Condo later
Buy Condo and Sell HDB simultaneously
Sell HDB and buy 2 properties
The best way to proceed with an HDB upgrade is by purchasing a resale condo before you sell the HDB flat. This brings many advantages such as a flexible timeline and an interim home to stay when you sell the HDB flat.
Also, the rental income from the flat can be put to use to service the mortgage for your condo. But that will work when you have stable financials.
In buying a condo upfront before selling the HBD flat you have to bear out three cash payments. There will be a 25 percent down payment and expenses of buyer stamp duty and additional buyer stamp duty will be the other two.
Also, you cannot leverage CPF if you are still paying the home loan related to your first flat. In short, there are many ticklish areas in the HDB upgrade to condos. But don’t worry, your adviser will take care of all such issues and make sure your sell HDB buy Condo dream is fulfilled with a viable roadmap.
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JJ Wong is the founder of MOPUpgraders.sg and has been a Property Wealth Planner in the real estate market for the past 6 years. He has helped many clients achieve their aspirations with the right financial planning and sound timeline planning. He is the man behind upgrading case studies of those who are holding on property under 10 years.