Returning Home from Overseas? Here's How Dual Property Ownership Applies to You
As the pandemic continues to worsen in several countries overseas, Singaporeans continue to return home to be reunited with family and move away from areas where the spread of the COVID-19 virus is rampant. Some do so for safety, others do so due to loss of jobs, but the purpose is the same; Singaporeans have returned to find shelter from the storm. It is estimated that some 13,700 Singaporeans have returned home.
Returning home brings its own struggles concerning housing, however. Some Singaporeans are still holding on to their various properties abroad, be it under rent or as outright ownership. For those who did not foresee this situation, many have been stuck in a loop of renting locally, or moving back in with their parents. However, these are both short-term solutions with no long-term investment from an economic view.
For those affected, we have narrowed down some options in light of the unusual circumstances that the pandemic has brought to our shores.
Can I Buy A New HDB Flat Now?
The short answer is “Yes”. However, there are certain conditions, including the requirement that one does not own any other property, be it in Singapore or overseas. This is because HDB flats are public housing which prioritises Singapore citizens who need a home (i.e. they don’t have any other property).
If you’re caught in a sticky situation with an overseas property yet are in genuine need of a roof over your head in Singapore, you can try making an appeal to HDB. Approval, however, is on a case-by-case basis, though there have been successful cases in the past.
Browse resale HDB flats on PropertyGuru.
How Can I Make A HDB Appeal?
For some who have settled down overseas, disposing of their overseas family home might not be an option. This could be due to a myriad of reasons such as children studying overseas staying at the property, aged parents staying behind as they are unable to travel, an inability to sell the property due to complicated real estate situations aboard and so on. If your situation is complicated, you have a chance of appealing with HDB. The main point of communication is to let the relevant authorities know that you are unable to afford buying private property and have an immediate need to instead purchase an HDB flat.
Appeal Tip #1: Get Your Finances in Order
Part of the criteria taken into consideration during an appeal is whether or not you have a good financial position that reassures HDB of your ability to afford and support a flat in Singapore. In this respect, it would benefit your case to assemble all the necessary financial documents to prove that you have the necessary income and funds to fulfil eligibility requirements.
At the same time, you should be ascertaining what you can afford, and how much of a home loan you might be able to get, based on those financial means. Using online tools like PropertyGuru’s Affordability Calculator can help you calculate your TDSR, and thus what kind of property you can afford.
Appeal Tip #2: Be Transparent about your Reasons for Holding onto Overseas Property
Being honest and transparent about your need to hold onto your overseas property is a necessity, be it family members staying behind, or legal ramifications that prevent you from selling. If you are earning any money from renting out your property, it is important to declare that as well. Appealing for a new HDB flat is not a means to work the system but a means by which citizens can still find a home to own and a place to live affordably in Singapore at great need.
This entire process can take up to several months and you should make sure that you have all the paperwork necessary before moving forward.
Popular Case Studies for Returning Singaporeans
Case Study #1: New Couple Who Own Overseas Property Where Their Aged Parents Are Staying
This is a popular scenario, particularly in parts of Malaysia and Australia where more than 15,000 Singaporeans diaspora reside. These places are favourable due to their large sprawling land space as well as the fact that they are away from the hustle and bustle of life.
It is a common occurrence to see aged parents follow their children overseas to retire in more peaceful surroundings while taking in the adventures that retiring in a foreign country can provide. In light of the pandemic, it has been said to be dangerous for those who are elderly or in more vulnerable health states to travel and some might not wish to go through the rigours of travel or the intensity of quarantine on their return home.
The best-case scenario for this is if you wish to return to buy a resale flat that will give you the means to stay in Singapore while not having to worry about the worries connected with a brand new one. However, the Additional Buyer’s Stamp Duty (ABSD) of 12% will be incurred but you may wish to appeal your case to HDB directly to lower it. Alternatively, if possible, you may wish to pass the title of your overseas property to your parents directly and take on the new property in Singapore as your “first property”. This might also simplify some of the legal matters overseas where your parents are living.
Case Study #2: Older Couple Buying Local Property For Retirement While Owning Second Property Overseas For Children Staying There
This has also become a common occurrence. When children move overseas to study, if the parents are so inclined, they tend to move overseas as well, working remotely, retiring or even starting their own businesses. However, the pandemic saw many parents coming back for fear of worsening situations forcing their children to be left behind to pursue their education.
In this scenario, if your overseas property is being used by your kids, you might want to retain the title to that property and instead use their names to purchase private condominiums here. This has become a popular occurrence not just to protect their children’s ability to have property in Singapore, but to avoid the nasty ABSD that comes with dual property ownership.
If you do not have the financial means to purchase private property, similar to case study one, you may want to pass off the overseas property to your children and buy more affordable housing for retirement plans locally.
The real dilemma comes from those who do not plan for the future. Unfortunately, Singapore laws act in such a way that they allow you to buy overseas property after your initial purchase of a HDB flat (after the MOP of your flat has been fulfilled). However, you will be unable to do the opposite which is to buy a HDB flat after purchasing an overseas property under your name.
Though COVID-19 comes with its unprecedented scenarios, if you are planning for the future and eventually intend to return home, securing your first home locally is an important step forward. Whether you are buying a property with less restrictions, or you have successfully appealed to HDB, you will then also need to finance your property with a suitable mortgage.
Given that you might have been out of touch with Singapore’s property and finance regulations if you have been overseas for a long time, consulting PropertyGuru Finance’s Home Finance Advisors will familiarise you with your next steps, and also help you find the most suitable mortgage from all the major banks in Singapore when you’ve received approval and found your ideal property, so that you can successfully start your home ownership journey in Singapore—wherever that might take you.
Disclaimer: Information provided on this website is general in nature and does not constitute financial advice.
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