This is the story of my encounter with Mr. and Mrs. Cheng, a couple facing the delightful challenge of accommodating their growing family. They were currently residing in a 3-bedroom Executive Condominium (EC) but found themselves in need of more space after welcoming twin babies into their lives. To address this, they had two primary options: either upgrading to a larger 4-bedroom condo or downsizing to a HDB flat, either a 5-room unit or an Executive Apartment.
After careful consideration, the Chengs decided that going for a HDB flat would be the more practical choice that catered to their needs. However, during Mr. Cheng’s search for the right HDB flat, he encountered several real estate agents who left him disappointed. He felt these agents were not genuinely working in his best interest. His intention was to purchase a HDB flat for his family, but he sensed that these agents were pushing him towards bigger condos, likely because they were aware of his strong financial standing.
In Mr. Cheng’s opinion, the agents he had met seemed to have ulterior motives, persuading him to buy larger properties rather than genuinely helping him find a suitable solution. This experience left him upset and disappointed. Consequently, he developed a negative impression of property agents and approached future interactions with extra caution. Initially, he did not share these sentiments with me; I only learned about them after he decided to engage my services.
For a while, Mr. Cheng postponed his plans until one day, out of the blue, he received my brochure at his doorstep. After some hesitation, he decided to give me another chance and gave me a call. During our initial conversation, he shared his need for more space, and I vividly recall our first phone call. He asked me the typical questions most buyers would ask, but he repeatedly emphasized that if we met in person and he didn’t feel comfortable, he wouldn’t be obligated to proceed. I assured him of this, and soon we scheduled a meeting at his residence.
During our meeting, Mr. Cheng elaborated on his situation and asked for advice on whether to opt for a HDB flat or a larger condo. We delved into the financial details he had provided before our meeting. After careful review and discussion, I proposed that a HDB flat would be the more suitable choice for his family. This recommendation stemmed from the fact that his main concern was obtaining a larger living space for his family, rather than focusing on capital appreciation. Furthermore, even if he were to purchase a newer condo with more bedrooms, it still wouldn’t offer the spaciousness that a HDB flat could provide. Additionally, residing in a HDB flat would offer various subsidies and benefits. At that moment, he recognized that my advice was truthful and aligned with his interests, rather than being driven by my own agenda.
Moreover, I introduced an innovative idea that caught him off guard. I suggested that Mrs. Cheng become the sole property owner of the HDB flat, with Mr. Cheng listed as an occupier. Contrary to common belief, I explained that while forming a family nucleus is typically required to purchase an HDB flat, having just one owner is indeed possible. Mr. Cheng was initially skeptical about my proposal, as he had always thought that listing both spouses as owners was compulsory. He took the initiative to verify this with HDB on the next working day. HDB confirmed that this arrangement of having one owner and the other spouse as an essential occupier was not only viable but also legal.
However, I was transparent about the limitations of this approach. Although it could help them bypass Additional Buyer’s Stamp Duty (ABSD), Mr. Cheng would need to wait five years before considering further property investments. Financial stability was crucial, as only Mrs. Cheng’s CPF could be used for the purchase, and her income needed to be sufficient to secure a mortgage from the bank. We confirmed these details with the bank to ensure feasibility before proceeding.
After discussing the proposal, Mr. and Mrs. Cheng decided to move forward with the purchase of the HDB flat, with Mrs. Cheng as the owner and Mr. Cheng as the occupier, successfully avoiding ABSD on their second property acquisition.
Fast forward to the present, the Chengs have spent nearly four years in their HDB flat, with one more year to go before Mr. Cheng can consider his next property move. This arrangement has allowed Mr. Cheng to navigate the property market without the burden of property ownership tied to his name, thus avoiding ABSD.
It’s important to highlight that property regulations and taxation laws can change over time, so individuals considering such strategies should consult legal and financial professionals to ensure compliance with current legislation. While this story provides insights into a potential approach, individuals should exercise caution, seek professional advice, and verify the legality of any methods within the prevailing legal landscape before proceeding.
I am delighted to have assisted Mr. Cheng’s family in finding their new home and look forward to serving Mr. Cheng again in his upcoming property plans in a couple of years.