Divorce in Singapore is on the rise, especially among those recently married. While no one enters into a marriage expecting it to fail, things happen. Almost 4.1% marriages ended in a divorce or separation in 2019. Separation and divorce often bring a flurry of emotions and stress, and the shared matrimonial property is often an apple of discord.
Whether you’re going through a rocky time in your marriage, or are just reading up for possible future reference, it’s important to be aware of the factors that play a part in post-divorce property settlements in Singapore.
1. Is the Divorce Amicable or Ugly?
First of all, the said property should be defined as a matrimonial home, and how much the wife is entitled to in a divorce needs to be looked at, even if the property is registered under only the husband, or was inherited from the family or passed on as a gift.
Once the property has been determined as a “matrimonial home”, both parties need to submit their respective positions through their divorce lawyers to the civil court during an ancillary hearing. Here, the decision to retain or give up the property is recorded in a court judgement.
In the case of private properties, if the divorce or separation is amicable, the decision to retain the family home can be mutual. However, if it is an HDB or Build-To-Order flat (BTO), the eligibility terms to retain the flat ride on a number of factors. Even if the couple goes through an amicable split and wants to transfer their “interest in the HDB flat” to the other party’s name, it’s not so easy! More on that below.
If a couple is unable to divide their assets amicably, the judges have free reign to do so. This depends on the couple’s cash savings and the extent of contributions each party has made to the property.
2. Is the Matrimonial Home an HDB Resale/BTO Flat or Private Property?
Amicable split or not, the decision to retain private property is much easier than retaining an HDB flat. In order to retain an HDB flat under the SSC scheme, you’ll need to check the following boxes:
Consideration for SSC Scheme
Requirement to Retain HDB Flat
At least 35 years old
Fulfilled 5-year MOP
Matrimonial Home Status
Resale flat purchased from open market without CPF Housing Grant for family
If you do not fulfil any of the above conditions, you cannot retain the said flat, even if you are the sole registered owner.
In the case that your ex-spouse is older, he/she can retain the flat on mutual agreement, otherwise, the property can be disposed of, sold or divided between the said parties as the Court thinks is just and equitable.
If there are children involved in the divorce or separation, either party can retain the HDB flat depending on the following factors:
- Either spouse was originally listed in the application to buy the flat.
- The spouse having the child’s custody (care and control), or
- The one, who financially qualifies to take on the home loan for the HDB flat.
3. What Are the Stages of Divorce and How Are Matrimonial Assets Divided?
Divorce is a long-drawn legal process that needs to be justified by the court. Once the court establishes that there is a breakdown in marriage, the Court grants an Interim Judgment, which is a provisional order for divorce. This document allows you to start making decisions regarding children, property and finances.
These are known as “ancillary matters” and a couple must reach an agreement on how to split their assets before the final stage of the divorce proceedings can be reached.
As per Section 112(2) of The Women’s Charter, the division of matrimonial assets depends on the following factors:
- The extent of contributions each party has made in terms of money, property or work towards acquiring, improving or maintaining the matrimonial assets.
- Any debt owing or obligation incurred or undertaken by either party for the joint benefit of any child in the marriage.
- The extent of contributions each party has made towards the family’s welfare, such as looking after the home or caring for the family or any aged relative dependent on either party.
- Any agreement between the parties with respect to the ownership and division of matrimonial assets owing to the deed of separation.
- The assistance provided by one party to the other (this can be material or immaterial), including assistance that helps the other party to carry out his job or business.
- Any period of rent-free occupation or other benefit enjoyed by one party in the matrimonial home to the exclusion of the other party.
- The needs of the children involved.
- The length of the marriage.
- The income, earning capacity, standard of living and financial resources, which the family experienced before the separation and is likely to change in the anticipated future.
4. How Is the Division of CPF Monies Carried Out?
The court holds the power to order a division of the parties’ CPF monies if the parties are unable to agree on how their matrimonial assets should be divided, and let the court decide on this matter on their behalf.
If your ex-spouse is a Singaporean Citizen or Singaporean Permanent Resident and has been granted a portion of your CPF monies, the division can take place as:
A Transfer Order
Under a transfer order, the court can order an immediate transfer of your CPF savings to your ex-spouse’s CPF account with the amount subject to the court’s discretion. This transfer can take place without you keeping aside your retirement sum.
Once the transfer is made, your ex-spouse can use the said amount for approved CPF schemes such as housing, investment and education. He/she may also withdraw this money when he/she turns 55.
To commence the transfer of CPF monies, you will need to submit the court order for the division of matrimonial assets to the Central Provident Fund Board (CPFB).
A Charging Order
If your ex-spouse is a foreigner, then under a charging order, your ex-spouse will be granted his/her share of your CPF monies in cash only when you become eligible to withdraw your CPF savings. Payment to your ex-spouse is subject to you keeping aside your retirement sum first.
For the ex-spouse to receive payment, the court order for the division of matrimonial assets first needs to be submitted to CPFB. If the court order is accepted, CPFB will notify your ex-spouse on his/her entitlement to a share of your CPF savings when you become eligible to withdraw it.
Once CPFB has received your ex-spouse’s application and supporting documents, the application will be processed. The monies will be paid to him/her through GIRO within 10 working days or via cheque within 15 working days.
Ultimately, the court can order you to transfer your share of the matrimonial home to your ex-spouse, with partial or no refunds made to your CPF account for your contributions to the property’s purchase price.
5. What Is the Transfer of Ownership to the Spouse, and How Can You Get a New Home Loan after Divorce?
Agreeing to not sell the house and split the ownership of the house requires the buyer to obtain an Approval-in-Principle (AIP) with a bank first.
In-Principle Approval (IPA)
Get your IPA to budget for your dream home confidently
The amount that you expect to borrow from the bank is the sum of your share of the outstanding loan, as well as 75% of the purchase price or the amount that you’re buying over.
There are a handful of eligibility factors that must be met, namely
If the buyer doesn’t qualify for the total loan amount, then he has to take a smaller loan. That means the buyer needs to come up with the difference through cash or CPF and include that in the downpayment.
Once you have the AIP, you’d know how big a loan you are actually eligible for and how much it will cost you monthly. Finding out your loan liability, before the final verdict on your divorce is out, helps you decide if you can afford to take over the property or not. Plus, this, in essence, is the process of obtaining a new home loan after divorce.
Divorce in Singapore is Highly Personal
The law doesn’t lend itself easily to a divorce, because it’s so personal in nature. However, if you know your rights and the risks involved, it is possible to make a legally informed decision in your favour.
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This article was written by Manasi Hukku. Manasi likes to cover the intersection between research and relevance to help readers find a place they’ll love. She is a UX Conversation Designer, Medium Columnist and mother of two.