Navigating Decoupling & Acquiring Two Properties

Many people have hear about the term DECOUPLING. But what does it really mean? Read on more to find out.

In late May 2023, Mr & Mrs Wong found themselves at a crossroads when they received my brochure. Since they have been contemplating the possibility of selling their fully paid property and purchasing two separate ones, they decided to reach out to me for guidance.

Their current property, which they purchased six years ago, held a unique challenge. Their shared ownership, equally divided at 50/50, complicated matters. The prospect of decoupling, where one would buy out the other’s shares, hung over them, accompanied by the specter of higher stamp duty, calculated based on the percentage of shares transferred.

With some reservations, they arranged a meeting with me, expressing concerns about potential obligations or charges if their exploratory journey didn’t lead to action. I understood their situation, acknowledging the complexity of today’s real estate market and the ever-changing landscape of rules and regulations.

My mission was clear: to enlighten them about the current market conditions and gain a deeper understanding of their needs and concerns. Ultimately, I assured them that no charges or obligations would bind them if they chose not to proceed.

Our first meeting, held at their residence and spanning nearly three hours, was a constructive exchange. They shared their aspirations and initial plans. Their initial inclination was to sell their aging property and acquire a new one closer to a school, ensuring their child’s education in the coming years.

With this foundation, we concluded our initial meeting, and I set to work, curating a list of projects tailored to their unique requirements. Concurrently, I connected them with bankers to initiate the in-principle approval (IPA) process.

A few weeks later, a second meeting was held They had gotten an IPA loan from the bank, and I had compiled a list of potential properties, encompassing resale condos and upcoming projects. Additionally, I had prepared a comprehensive financial plan for their sale and purchase, presenting them with a holistic view of their options.

After rigorous discussions and careful deliberation, they leaned towards acquiring a brand-new condominium over existing resale properties. The allure of a new project, albeit with a longer time to the Temporary Occupation Period (TOP), prompted a decision to retain their current property for the time being. As for their child’s school plans, we agreed to rent a property when the time was right, subsequently renting out their existing one. However, this plan necessitated decoupling the current property to avoid the Additional Buyer’s Stamp Duty (ABSD).

I guided them through the process, sourcing upcoming projects and connecting them with a law firm to execute the decoupling seamlessly.

In the blink of an eye, their perseverance paid off as they secured their desired unit in a prestigious project. Their first choice materialized, thanks in part to a favorable ballot number. The project’s overwhelming popularity on its launch day made their success even sweeter, marking it as one of the top projects of 2023. Their joy knew no bounds, and they felt truly blessed by their good queue number. The journey had been a collaborative effort, requiring time and dedication from both myself and the Wongs.

In reflection, they expressed gratitude for taking that initial step of reaching out to me after receiving my brochure. They were appreciative of the countless calls and the time spent, culminating in the successful acquisition of their dream unit.

Securing their dream unit was just the beginning of the journey. The intricate process of decoupling loomed ahead, demanding precise timing to sidestep Additional Buyer’s Stamp Duty (ABSD) and to ensure timely Central Provident Fund (CPF) returns. These challenges requires meticulous planning and considerable effort, yet Mr. and Mrs. Wong knew they were not alone.

They expressed their genuine appreciation for the invaluable advice and planning I provided.

As the decoupling process unfolded, it was anything but a daunting ordeal. Instead, it became a smooth and relatively stress-free experience. Throughout the journey, my vigilant watchfulness proved essential. I consistently identified potential pitfalls and guided them away from any missteps, ensuring that their path remained clear and obstacle-free.

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