Flat ownership transfers only allowed in certain cases: HDB

The Housing and Development Board (HDB) has implemented new restrictions for the transfer of flat ownership to a family member or partner. From 1 April this year onwards, ownership transfers are only allowed under six special circumstances.

These six circumstances include marriage, divorce, death of an owner, financial hardship, renunciation of citizenship and medical reasons.

Previously, flat owners could simply transfer ownership of their property to another family member or their spouse. Since 2012, around 6000 applications for change of HDB flat ownership are approved each year.

After giving up ownership of a HDB flat to a family member or spouse, these individuals could avoid incurring the Additional Buyer’s Stamp Duty (ABSD) when purchasing another property.

Singapore citizens must currently pay an ABSD of 7 per cent on a second property. An ABSD of 10 per cent applies to a third or any subsequent properties purchased.

According to industry experts, the practice of “decoupling”, whereby one spouse surrenders his or her co-owner status of a HDB flat in order to avoid incurring the ABSD when buying another property, used to be a common practice and an open secret before the change in regulations.

The ABSD was first introduced in 2011. It was revised in January 2013 as part of cooling measures to combat rising property prices. The 2013 revision made ABSD applicable from the purchase of a second property onwards, instead of the third.

Since then, the practice of “decoupling” became even more widespread.

Nevertheless, a spokesperson for the HDB stressed that the tightening of regulations was not in response to the rise of the “decoupling” practice to avoid ABSD. Instead, the change was part of a regular policy review.

HDB also noted that should reasons for a transfer in flat ownership not fall under the six approved circumstances, the HDB would review applications for transfers on a case by case basis.