14 Sep 2010
The Straits Times
THE new rules on real estate ownership will not necessarily force private property owners who inherit an HDB flat to sell one of the homes.
There is some leeway in the rule that states that if you buy an HDB resale flat you must dispose of any additional private property – held locally or abroad – within six months of the purchase.
The Housing Board clarified yesterday that if a property owner inherits an HDB flat that was bought before Aug 30 – the day the measures came into effect – he could keep both homes.
But if the flat’s minimum occupation period (MOP) has yet to be met, the person inheriting it will have to move in until the MOP is complete, unless prior approval from HDB has been obtained to sublet the whole flat. This is in line with existing rules.
The dilemma will arise if a private property owner inherits an HDB flat that was bought on or after Aug 30.
The owner will have to decide which property – public or private – to sell.
Once a flat’s MOP is met, a private property owner will be able to inherit it as long as he meets the relevant eligibility conditions.
This means that any resale flat bought within the past two weeks will only be able to be inherited and kept by a private property-owning beneficiary in 2015 at the earliest.
But the HDB may consider exemptions on a case-by-case basis.
In situations where the inherited flat has already met the MOP but the beneficiary decides not to take it over – or is not eligible – it can be sold on the open market within 12 months from the date it was vested.
If the inherited flat does not meet the MOP, the beneficiary can ask the HDB for help. ‘We will assess the merits of the case to see how we can assist him,’ it said.
Based on existing rules, an HDB flat owner can own only one HDB flat at any one time. An HDB flat owner who inherits another HDB flat has to decide which one to keep.
‘If he decides to keep the inherited flat, he has to sell his existing HDB flat – subject to eligibility conditions for sale such as the MOP – before he can take possession of the inherited flat,’ the HDB said.
Mrs Linda Chew, 52, said that it was only fair that beneficiaries who own private property are not forced to dispose of flats that their parents might have left them.
Her 74-year-old mother lives in a three-room HDB flat in Tampines while she lives in a condo in Simei.
‘My mum is still healthy but eventually when we have to decide on what to do with her flat, I think we want to have all options available to us still… Maybe even holding on to it as a long-term investment,’ said Mrs Chew.
Experts say that inheritance seems to be the only way for private property owners to enter the HDB resale market without having to sell their existing homes.
They say that the new rules might not affect that many people as many sell inherited flats and share the proceeds among siblings.
Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said the new rules were fair and would set people’s minds at rest since inheriting a flat was often a situation outside of one’s control.
‘In most cases, unless the property gives you an incentive to keep it, such as if it’s centrally located in a good location, most people will liquidate… With more resale flats expected to enter the market, it might also be better to cash out now,’ he added.