Owners of foreign homes not exempt

They must sell overseas home within six months of buying HDB flat

People who own a home overseas will still have to comply with the tough new rules on property ownership if they want to buy an HDB resale flat. The clarification yesterday came amid uncertainty over who might or might not be exempt from the rules announced on Monday. The new regulations state that if you buy an HDB resale flat you must dispose of any additional private property within six months of the HDB purchase. This means an overseas property must be sold within six months of buying a HDB resale flat. And an owner of a non-subsidised HDB flat who has yet to meet his minimum occupation period (MOP) of five years will also not be allowed to buy a private property locally or abroad. How new financing rules affect owners of homes offshore was also made clearer yesterday. Under the revised regulations, a buyer with a mortgage on a local property must stump up a down payment of 30 per cent when buying an additional property. This is up from 20 per cent previously. And at least 10 per cent of this deposit must be in cash - up from 5 per cent before - with the rest coming from his Central Provident Fund  (CPF) accounts. But the Monetary Authority of Singapore (MAS) said that a buyer with a home loan for an overseas property will not be subject to these financing rules if buying an additional property here. However, the MAS said it 'expect(s) financial institutions to take into account the borrower's outstanding loans when making their credit assessment'. Industry players say that the new rules effectively delineate the HDB resale market as 'public housing', reserved for those people whose HDB flat will be their only property, whether here or abroad. They will also put pressure on permanent residents (PRs) who might own a home in their native country to choose where they want to be based permanently. PRs make up about one in five resale flat buyers, and some Singaporeans have blamed the influx of PRs in recent years for the soaring prices of these homes. Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said the new rules were similar to an income ceiling. 'Basically, it seems to be saying: If you can afford to own a private property then you don't deserve to own an HDB flat,' he said While the new rules are aimed at keeping HDB flats for owner occupiers and not for investment purposes, Mr Tan felt that exceptions should be made for genuine cases such as retirees looking to monetise their overseas assets through renting out an offshore property. But enforcement and implementing penalties for those who flout the rules would be a challenge, say experts. Mr Steven Tan, executive director of residential at Orange Tee agency, said enforcement would be difficult when buyers pay for overseas property all in cash. Source: The Straits Times © Singapore Press Holdings Ltd.