Understanding Executive Condominiums (EC) in Singapore
Executive condominiums (ECs) are a popular housing choice in Singapore, offering a unique blend of affordability and luxury. They provide a more upscale living experience compared to HDB flats, yet come at a more reasonable price point than private condominiums. ECs cater to middle-income Singaporeans who exceed the income ceiling for HDB flats but find private condos financially out of reach.
Developed by private developers and subsidized by the government, ECs provide a range of condo-like amenities, including swimming pools, gyms, clubhouses, and well-thought-out designs. In the words of former National Development Minister Khaw Boon Wan,
it’s like getting a Lexus for the price of a Corolla.
The following discussing the latest changes of the regulations for EC.
If you’re new to explore EC market, we strongly advice you to checkout first the article EC Eligibility Check and Ultimate FAQs
Key Changes for EC Buyers as of May 9, 2023
Effective May 9, 2023, significant changes have been introduced for EC buyers, including alterations to income assessment, resale levy rules, housing grants, and more. Let’s delve into the details:
1️⃣ SC 2nd Timer, SPR 1st Timer, the SPR will receive HALF of the SC/SPR Grant or
The SC/SPR + SC kids the full grant will be split equally to the SC & SPR parent. For SC/SPR Top-Up grant:
- Eg 1. SC/SPR both 1st Timer (salary below $10k) now $20k grant will be split to both, then later part after the SPR converts to SC or gives birth to the SC kids and applies for the bal $10k top-up grant, the grant will split to both.
- Eg 2. SC (2nd timer) + SPR (1st timer) (salary below $10k). The half grant $10k will still be given to the SPR now, then after SPR converts to SC or gives birth to the SC kids, they can still apply for the bal $5k Top-Up grant.
2️⃣ SC Child as an applicant with SC Parents (1st Timer) as Core Occupiers, Child will receive HALF of the Grant, Parents will receive HALF of the Grant, even as occupiers. Parents as Core Occupier will have to pay Resale Levy for the next subsidized flat AND considered to have ENJOYED 1 SUBSIDY.
3️⃣ SC Child + 1 SC Parent as applicants, 1 SC Parent as Core Occupier, Grant will go to BOTH Parents and Child is not considered as having enjoyed 1 subsidy.
4️⃣ Single SC Child Applicant (1st Timer, Above 21 years old), buying with 2 SC parents (Second Timer) as Core Occupier, the parent will need to Pay HALF Resale Levy (E.g., 4-room $40k, they only pay $20k instead of $40k). But after this purchase, the parent will become a 3rd Timer and is not eligible to purchase any BTO in the future, except 2-room Flexi.
5️⃣ Single SC Child Applicant (1st Timer, Above 21 years old), buying with an SC parent (Second Timer), but 1 parent becomes the Applicant and 1 parent becomes the Core Occupier, the parent will need to Pay FULL Resale Levy (E.g., 4-room $40k, NOT Half Levy), as this family nucleus is based on the Parent (Public Scheme).
6️⃣ CPF Housing Grant, if utilized, can be used for Future Private Property purchase. If the Grant is not utilized, then CANNOT use for Private Property Purchase in the future. For example, SC Husband as an applicant, SC wife as an Occupier, both will receive the Grant. But Wife’s Grant Amount cannot be used for future private property purchase, only can use for the next HDB purchase, be it BTO or Resale.
7️⃣ Divorced with Interim Judgement is good enough to book an EC under Public Scheme (with Child). Divorced buying under Fiance/Fiancee Scheme MUST have Final Judgement.
8️⃣ ALL components in the payslips ARE to be included for Income Assessment. For example, Reimbursement/Claims (Ang Bao, Hospital Claims or Even if you buy an Air Ticket for the company and indicate reimbursement), Overtime, Director Fees are to be considered as part of your Income. Any Bonuses that are stated in the payslip are excluded.
9️⃣ Be it Employed/Self Employed or Unemployed, all buyers will need to submit their latest NOA/Form B and Past 15 months CPF Contribution, on top of the 12-month payslips for employed or Income declaration for Self & Unemployed.
🔟 Buyers who are unemployed for the first 6 months and employed for the next 6 months, the 6-month salary will be divided by 6 months, not 12 months. For example, a buyer who changes a job on the last day of May ’23 and has a salary extending until May 15 ’23, HDB will take the 0.5-month salary for calculation. Another example is a buyer changing to a new job with a $4,000 salary but starting on June 15 ’23, with a $2,000 payout, HDB will Count the Full month ($4,000), not Half ($2,000).
Other Things to Note for Income Assessment, Resale Levy, and Housing Grants
1. Income Assessment Requirements
When applying for an EC, buyers are required to provide specific financial documents, which include:
- 12 months’ payslips or documents such as NOA, IR8A Form, or Form B.
- Overtime pay and reimbursements should be factored into the assessment. For instance, if your E-Application date is May 9, 2023, you should submit payslips from April 2022 to March 2023.
When submitting NOA, IR8A, or Form B, also remember to include your CPF Contribution history. Ensure that when buyers declare their income monthly (12 months) in the E-Application, they do so accurately. It’s essential to exclude bonuses and input their monthly salary for the entire year.
2. Resale Levy Applicability
If parents, divorcees, widows, or widowers are listed as essential occupiers and are second-time buyers, a resale levy is applicable.
Parents, divorcees, widows, or widowers listed as occupiers are considered second-time purchasers and will not be eligible for HDB-subsidized flats (3 rooms and above) in the future, except for 2-room flexi units.
3. Housing Grants for First-Timers to SPR
Housing Grants for first-time buyers will now be disbursed to the Singapore Permanent Resident (SPR) account, if eligible, instead of the Singapore Citizen (SC) account. However, if the SPR is listed as an essential occupier, the grant will still be disbursed to the SPR account. It can only be used for future purposes because the SPR is considered an essential occupier and not an HA2. The grant cannot be used for future EC purchases but can be utilized for HDB and resale flats.
4. Income Ceiling for EC
The income ceiling for EC eligibility is capped at $16,000. If your income exceeds this amount but remains below $17,000, it’s advisable to contact relevant authorities or reach out to us for insights to enhance your chances of approval.
5. Income and Allowance Considerations
In the income assessment, various allowances and reimbursements are considered, including:
- Allowances and overtime pay (e.g., food, transport, laundry, uniform, shift work, etc.)
- Claims and reimbursements
- Director’s fees
- Employee benefits (e.g., birthday incentives, marriage tokens, etc.)
- Incentives
- Overseas cost of living allowances for working individuals
- Pupillage and stipends
However, specific income sources, such as alimony, bonuses, and dividend income, are not considered during the assessment:
- Alimony and maintenance fees
- Bonuses
- Annual Wage Supplements
- Dividend income and interest from fixed deposits or savings accounts
- Employee share options and other non-monetary remuneration
- National Service allowances
- Overseas allowances for scholarship recipients
- Pensions
- Rental income