- Step 1: Understand What an Executive Condominium Is
- Step 2: Check Your Eligibility
- Step 3: Evaluate Your Finances
- Step 4: Plan the Transition from HDB to EC
- Step 5: Research Upcoming EC Launches
- Step 6: Submit an Application
- Step 7: Secure Financing
- Step 8: Choose Your Unit and Finalise Purchase Agreement
- Step 9: Prepare for HDB Sale
- Step 10: Collect the Keys to Your EC
- Rules and Responsibilities of Owning an Executive Condo (EC)
- Conclusion
- Frequently Asked Questions (FAQs)
Upgrading from an HDB flat to an Executive Condominium (EC) is a significant step for many Singaporeans seeking to enhance their living standards.
ECs are government-subsidised, offering prices lower than private condos. However, they are subjected to some ownership restrictions like HDB flats. Upgrading from HDB to an executive condo (EC) can be an attractive option for those seeking more spacious living, condo facilities, and potential for capital appreciation while still enjoying some government grants.
This article provides a comprehensive, step-by-step guide to navigating this transition effectively.
Step 1: Understand What an Executive Condominium Is
ECs are a hybrid housing option developed by private developers but subsidised by the government. They offer facilities similar to private condos like swimming pools, gyms, and clubhouses.
However, unlike a private condo, an EC is subjected to ownership restrictions for the first 10 years, after which they are fully privatised. For more information, please refer to executive condo eligibility conditions.
Key Features:
- More affordable than private condos due to government subsidies.
- Enjoys CPF Housing Grant of up to $30,000, with actual amount depending on monthly household income.
- Transition to full private status after 10 years.
- Catered to the “sandwiched class” of Singaporeans with a monthly household income between S$14,000 and S$16,000.
Step 2: Check Your Eligibility
Before proceeding, ensure you meet the following requirements:
- At least one applicant must be a Singapore citizen.
- Combined monthly household income must not exceed S$16,000.
- Must have completed your Minimum Occupation Period (MOP) of 5 years for your HDB flat, and 10 years if it comes under HDB’s new Plus and Prime flat classifications.
- Cannot own a private property or have sold any in the past 30 months.
- Current owners of an HDB flat must sell it within six months of purchasing the EC. For a new launch, it must be disposed of within 6 months of the Temporary Occupation Permit (TOP) issuance. A resale EC must be disposed of within 6 months of the option acceptance date.
Step 3: Evaluate Your Finances
Upgrading involves significant financial planning. Here are some important cost considerations:
Evaluate Your Savings: Ensure you have enough funds for the down payment and monthly mortgage payments.
Down Payment: Bank loans can cover up to 75% of a new launch EC price. At least 5% of the cost must be paid in cash while the balance of 20% can come from your CPF Ordinary Account (OA) or cash.
Example: For a S$1 million EC, you’ll need at least S$50,000 in cash and S$150,000 from CPF or cash.
Monthly Loan Repayments: Ensure sufficient funds are available for your monthly instalments, after accounting for the Mortgage Servicing Ratio (MSR) and Total Debt Servicing Ratio (TDSR). Refer to “How to Choose a Housing Loan“.
Financing Options: Unlike HDB flats, ECs require bank loans instead of HDB concessionary loans, which generally have stricter conditions and higher interest rates.
Current Mortgage: Understand your existing mortgage obligations and how you can finance your EC.
Sale Proceeds: Estimate how much you will gain from selling your HDB flat and factor it into your affordability calculation.
Resale Levy: If you have previously purchased a subsidised HDB flat or received a CPF Housing Grant, you will be subjected to a resale levy, with the amount depending on the type of HDB housing you have purchased as indicated below.
| First Subsidised Housing Type | Resale Levy Amount | |
| First Subsidised Housing Type | Recipient of CPF Housing Grant (Singles) | |
| 2-room/ 2-room Flexi flat | $15,000 | $7,500 |
| 3-room flat | $30,000 | $15,000 |
| 4-room flat | $40,000 | $20,000 |
| 5-room flat | $45,000 | $22,500 |
| Executive flat | $50,000 | $25,000 |
Buyer’s Stamp Duty (BSD): BSD is tiered: 1% for the first S$180,000, 2% for the next S$180,000, and so on. Refer to the table below or learn more about stamp duties calculation.
| Buyer’s Stamp Duty (BSD) | ||
| Higher Purchase Price or Market Value of the Property | Rates on or before 14 February 2023 | Rates on or after 15 February 2023 |
| First $180,000 | 1% | 1% |
| Next $180,000 | 2% | 2% |
| Next $640,000 | 3% | 3% |
| Next $500,000 | 4% | 4% |
| Next $1,500,000 | 5% | |
| Amount exceeding $3,000,000 | 6 | |
Legal Fees: Expect legal fees of around $2,500 to $3,000. Different law firms may charge different rates. Check a few law firms for quotes or ask your property agent for recommendations.
Secure a Loan Approval-in-Principle (AIP): Get pre-approved for a bank loan to know your borrowing limits.
Step 4: Plan the Transition from HDB to EC
Sell First or Buy First? Decide whether to sell your HDB flat before purchasing the EC. Both decisions have their pros and cons:
Timing Considerations: Ideally, sell your HDB before or soon after securing your EC to avoid dual mortgage payments.
Sell First: This reduces financial strain and avoids paying Additional Buyer’s Stamp Duty (ABSD). It also allows you to use proceeds for the EC purchase. However, you will need to find temporary accommodation until you EC is ready to move in.
Buy First: This gives you more time to find the right EC while you still have a roof over your head. However, it requires ABSD upfront, refundable upon selling your HDB flat within six months of buying a resale EC or upon issuance of the Temporary Occupation Permit (TOP) for a new launch.
Step 5: Research Upcoming EC Launches
Once you have sorted your finances and plan, find out about new EC launches on developer websites, online property portals, property review blogs, or contact a property agent.
When researching your EC, take note of the following:
Location: Consider your preferred location, transport options, proximity to amenities, schools and workplaces, and future development plans for the area.
Project Details: Research the developer’s reputation, project specifications (unit sizes, appliances, fittings, facilities), and pricing.
Showroom Visits: Attend showrooms to view layouts, site plans and facilities to get a better feel of the development.
Market Conditions: Stay updated on EC market trends and launch dates to make an informed decision. You may contact a property agent to assist you on this.
Step 6: Submit an Application
Although you can apply for an EC personally, it is advisable to enlist the help of a property agent for the following reasons:
- Expert Knowledge: Agents have in-depth market knowledge, including eligibility criteria, pricing trends, and upcoming launches.
- Time-Saving: Agents can assist with the entire application process, unit selection, and post-purchase procedures.
- No Commission Payable: For new launches, the developer pays the agent’s commission. So, why not take advantage of the free service?
e-Application Process: Complete the online application form with the necessary details including personal particulars and household status. Your property agent will be able to guide you through the entire application process.
Balloting: You may need to participate in a ballot if demand exceeds supply. Do take note that during the initial EC launch, 70% of the units are set aside specifically for first-time applicants. This is to assist those who are entering the property market for the first time, have not previously purchased a subsidised housing unit from HDB or other developers, or have not received any housing subsidies or grants from HDB.
Wait for the outcome: Await the results of your application, which may take a few weeks.
Step 7: Secure Financing
Once your application is approved, you have the option to choose two financing schemes – Progressive Payment Scheme (NPS) or Deferred Payment Scheme (DPS).
NPS: Pay progressively as construction progresses while servicing any existing loans.
DPS: Pay only 20% of the purchase price upfront; the remainder is due upon obtaining the Temporary Occupation Permit (TOP).
Do take note that under DPS, the purchasing price of the EC is often 2-3% higher. This compensates the developer for the delayed receipt of funds, which can impact their cash flow and financial planning. Additionally, it allows the developer to reclaim any loss of interest as the bulk of the proceeds will only be due on the completion of the EC unit.
The schedule of payments for both schemes is shown below:
| Stages of Payments | Timeline | Normal Progressive Payment Scheme (NPS) | Deferred Payment Scheme (DPS) |
| Booking: Upon the grant of the Option to Purchase | Option Date | 5% (Cash) | 5% (Cash) |
| S&P: Upon the signing of the Sales & Purchase Agreement | 9 Weeks from Option Date | 15% (CPF or Cash) | 15% (CPF or Cash) |
| Foundation: Completion of Foundation Work | 6-9 Months | 10% (5% CPF or Cash and 5% Bank Loan) | – |
| Framework: Completion of Reinforced Concrete Framework | 6-9 Months | 10% (Bank Loan) | – |
| Wall: Completion of Brik Walls | 3-6 Months | 5% (Bank Loan) | – |
| Ceiling: Completion of Roofing/Ceiling | 3-6 Months | 5% (Bank Loan) | – |
| Windows: Completion of Electrical Wiring, Internal Plastering, Plumbing and Window Frames | 3-6 Months | 5% (Bank Loan) | – |
| Car Park: Completion of Car Park, Roads and Drains serving the housing development | 3-6 Months | 5% (Bank Loan) | – |
| TOP: Temporary Occupation Period | TOP | 25% (Bank Loan) | 65% (Bank Loan) |
| CSC: Certificate of Legal Completion | CSC | 15% (Bank Loan) | 15% (Bank Loan) |
Step 8: Choose Your Unit and Finalise Purchase Agreement
Upon successful application, you will be invited to book a unit.
Receiving the Option to Purchase (OTP): When booking your EC unit, you will receive the Option to Purchase (OTP). Typically, you need to pay a deposit of 5% of the purchase price.
Delivery of the Sales and Purchase Agreement: The developer will send the S&PA within two weeks from the date you receive the OTP. This document outlines all terms and conditions of the sale.
Deadline for Signing: Once you receive the S&PA, you have three weeks to sign and return it to the developer. This is a critical step as failing to do so may result in losing your booking and any deposits paid.
Payment Obligations: When signing the S&PA, you will need to pay 20% of the purchase price, less any booking fee already paid, within this timeframe.
Step 9: Prepare for HDB Sale
Plan the sale of your HDB flat. You have six months post-EC purchase to sell your HDB flat. Work with a property agent to speed up the process if needed. If you are selling yourself, you can advertise on the new HDB resale flat portal.
Complete the Sale: Once you receive an offer, complete the sale and use the proceeds towards your EC purchase.
Step 10: Collect the Keys to Your EC
Arrange for Collection: Once the EC is ready, collect the keys and move into your new home.
Move-In Preparations: Renovate and furnish your EC unit. Ensure all utilities and services are transferred seamlessly.
Settle in: Enjoy your upgraded living space and facilities available.
Rules and Responsibilities of Owning an Executive Condo (EC)
After upgrading from an HDB flat to an executive condo, there are rules and responsibilities that differ from staying in an HDB flat. These include the following:
Private Governance: Condo disputes are self-managed under the Building Maintenance and Strata Management Act (BMSMA).
Participation in Management: Owners elected into the Management Corporation (MC) are responsible for running the estate, attending meetings, voting, and implementing house rules.
By-law Compliance: Owners must follow by-laws set by the MC, even if they didn’t vote for them. By-laws are established to ensure harmonious living, proper maintenance, and management of the condominium community.
Maintenance Fees: Timely contributions are required for shared facilities; fees may increase over time, especially when the development ages and requires more repairs.
Shared Responsibilities: As an executive condo owner, you share responsibility with other residents to maintain the estate. This includes deciding collectively on covering costs for necessary repairs and using facilities responsibly.
Renovation Restrictions: Modifications to unit structures and external features require approval from the MC.
Conclusion
Upgrading from an HDB flat to an executive condo (EC) is a major financial and lifestyle decision. It requires careful planning and financial preparedness.
In addition, it is essential to stay informed about the current market trends and upcoming EC launches as they can significantly impact property prices and their investment prospects.
Consulting an experienced property agent can provide you with valuable market insights and guidance throughout the application process. These include advising on EC eligibility and ownership criteria, assist in identifying suitable properties, and offer advice on financing options. Their expertise can help you manage the EC application process, making it less stressful.
Frequently Asked Questions (FAQs)
Here are some commonly asked questions to help you gather the necessary information when upgrading from an HDB flat to an executive condominium (EC).
1. What is the process for upgrading from an HDB flat to an executive condo?
Upgrading involves several steps: researching suitable executive condos, checking eligibility, securing financing, selling your HDB flat, and completing the purchase. It’s essential to understand the market and legal requirements to ensure a smooth transition.
2. What are the eligibility criteria for purchasing an executive condo?
Eligibility typically includes being a Singapore citizen or permanent resident, meeting minimum age requirements, and not owning other properties. Additionally, you must comply with the monthly household income ceiling of $16,000 set by the Housing and Development Board (HDB).
3. How does financing work when upgrading to an executive condo?
For EC purchases, HDB loans are not available. You will have to take a bank loan. It is crucial to assess your financial situation, including your credit score and debt-to-income ratio. Consulting with a property agent or mortgage advisor can help you find the best financing solution for your needs.
4. What are the costs involved in upgrading to an executive condo?
Costs include the purchase price, stamp duty, legal fees, renovation expenses, and moving costs. Additionally, you may incur costs from selling your HDB flat, such as agent fees. Careful budgeting will ensure you are financially prepared for this significant investment.
5. How can I sell my HDB flat before buying an executive condo?
You can sell your HDB flat through the HDB resale portal or engage a real estate agent for assistance. Ensure you meet the minimum occupation period (MOP) before selling. Timing your sale and purchase strategically can help minimise financial strain during the transition.
