DIVORCE – HDB TRANSFER OF OWNERSHIP – OR SALE?

Divorce HDB Transfer of ownership is a hassle and often is a stressful event for all, including your pets, and unless you want the Family Court to make a decision for you, which at times can turn out just the opposite of what you want, it is best that you resolve all your matrimonial issues, including your precious HDB flat, amicably with your not so significant half now.

So what can happen to your HDB flat on a divorce? 

The worst case is that it is surrendered to HDB if, as an example, you have not fulfilled the minimum occupation period.  Baring this, you can consider a few options (1) sale of share to each other or sale in the open market or (2) transfer of 1 owner’s share to either the other owner or an eligible transferee.  In all of these scenarios, the remaining owner and/or intended transferee(s) must satisfy HDB’s prevailing eligibility conditions.

If Divorce HDB Transfer is not preferred, consider Sale of share to the other OR in the open market:

You decide on a value (usually prevailing market value) and sell your share to the other or the whole property in the open market.  In either case, the outstanding housing loan has to be redeemed and all CPF money withdrawn including interest accrued to be refunded. If it is a sale to 1 party, then only the outgoing party’s CPF & interest to be refunded and outgoing party’s share of the outstanding housing loan to be redeemed, proportionate to his legal share of the property.

• The sale proceeds of the divorce hdb transfer of flat after the above to be divided between the parties as agreed, if it is a sale in the open market. 
• Assuming the sale is sufficient to redeem the housing loan and CPF refund, you will thus after the completion of the sale be able to re-use your CPF money to purchase another property.
• What happens if the sale price is insufficient to re-pay all CPF money withdrawn including the accrued interest? As a matter of law, all CPF money has to be refunded failing which the sale cannot complete.  However, if the sale is at fair market value and after redeeming the outstanding housing loan the balance sale proceeds are insufficient to refund all CPF money withdrawn, CPF Board may waive the requirement to refund the shortfall in cash.  Your lawyer will seek CPF Board’s approval in such a case.

Divorce HDB Transfer of share to either the other owner or to an eligible transferee:  Subject to eligibility conditions, 1 party can transfer his/her share to the remaining owner or to an incoming transferee.  Similar to a sale, all CPF money withdrawn by the outgoing party including interest have to be refunded and usually that’s the incoming party’s responsibility.  The difference between a sale and a transfer is that the outgoing party need not repay any of the outstanding housing loan and there will be no cash consideration as well.   So the outgoing party walks away with all his CPF money and interest accrued intact.  Reference: HDB

• Do you need to pay stamp duty on such Divorce HDB transfer or sale:  The usual Seller Stamp Duty, Additional Buyer Stamp Duty or Buyer Stamp Duty is payable but this is remitted (not payable), if an ex-spouse or child or both acquires the share of the outgoing party.  This means that, if the property is sold to a 3^rd party, say your parents, stamp duty in the usual manner will be payable.

• Need further advice? Contact our friendly lawyer partner at ASCENTSIA LAW CORPORATION located conveniently at 10 Anson Road #03-22 International Plaza Singapore 079903 (Tg Pagar MRT) or CONTACT US here.

Here is what we found on HDB’s website. And we at iCompareLoan.com have translated it into LAYMAN language based on our best understanding (NOTE: Disclaimer applies, if in doubt check with a lawyer as iCompareLoan is not responsible for any losses arising from using the information in this article).

“Additional Information on Divorce HDB transfer of ownership

• “HDB does not grant any loan for the amount of cash consideration/ lump sum payment if the Court has ordered for such sum to be paid to one of the parties as one of the terms of the divorce.” (HDB)

LAYMAN: You cannot take HDB Loan granted from HDB when the court order you to pay sums to your other half.

• HDB does not accept valuation requests by owners who need a valuation report to determine the cash consideration. (HDB)

LAYMAN: Whatever is settled, you cannot ask HDB to do a valuation for the property to re-calculate any cash you may have to pay to your other half.

• “If the withdrawing owner has bought or intends to buy a flat with a second mortgage loan from HDB, they must use their CPF refund and cash consideration (if any, up to 50% of the consideration) to reduce the loan quantum.” (HDB)

LAYMAN: If you want to use HDB loan from HDB, then you must use CPF OA refunded from the divorce or Cash, so that if your flat is $500,000 for instance, your loan is not more than $250,000.

• “If the terms of divorce state that the withdrawing owner will receive a partial or zero CPF refund upon withdrawing ownership from the matrimonial flat, CPF Board’s confirmation letter indicating their consent to such Court Order must be submitted to HDB at the point of application.” (HDB)

LAYMAN: If the person letting go of the HDB flat receives zero CPF refund or partial CPF OA refund, you must have CPF board confirming that CPF agrees to this. And this letter must be submitted to HDB when applying for transfer of HDB ownership. But probably too complicated to all of us, let the lawyer do it.

• “If the matrimonial flat is a subsidised flat, the existing owners (and ex-spouse) will be considered to have enjoyed 1 housing subsidy. The existing owners will need to pay their respective share of the resale levy when they buy another subsidised flat/ EC unit (if eligible).” (HDB)

LAYMAN:If your flat with bought with your soon to be ex-spouse is subsidised, then whoever is taking over the HDB flat is considered to have taken the first HDB flat subsidy. If they (the spouse that holds on to the property eventually sells the HDB flat and buy another “subsidised” HDB flat, they will have to pay a Resale levy.

• “If the proposed owner is taking a mortgage loan from the bank or financial institution licensed by the Monetary Authority of Singapore (MAS), it would be good to check if the bank or financial institutions grant loans to effect ownership changes pursuant to a Court Order. Otherwise, the change in flat ownership would have to be effected according to the mode required by the banks or financial institutions, subject to HDB’s approval.” (HDB)

LAYMAN: If you want to divorce and want to take a bank or financial institution (FI) loan, you cannot assume you will be eligible. You must check with the banks or FI whether they grant loans for divorce and change of ownership. In other words, please check first. OR you may want to check with a Mortgage Broker who can assist you with finding a good bank loan.

Here are the list of Banks and FI: –

OCBC, UOB, DBS, HSBC, STANDARD CHARTERED BANK, MAYBANK, CITIBANK, HSBC, BANK OF CHINA, ICBC, CIMB, RHB, STATE BANK OF INDIA, HONG LEONG FINANCE, SINGAPURA FINANCE, SING INVESTMENT.

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