HDB flats are public housing launch by Singapore Government to solve the housing needs for all Singaporean.
As such, there is a minimum occupation period (MOP) imposed.
What is MOP?
Minimum Occupation Period (MOP), is a time frame the owners of the HDB flats have to stay in the units from the day they took over the unit, whether resale or built to order (BTO) flats.
Why is MOP important?
In Singapore, the primary role of an HDB flat is to provide housing, not serve as an investment. The MOP seeks to prevent people from buying resale flats and reselling them for higher prices immediately.
A MOP prevents property investors from driving up the prices of public housing
The only exception to this rule are one-room resale flats that are purchased without any grants - these flats can be bought and resold without having to fulfil any MOP.
How long is the duration of the MOP?
The MOP duration differs depending on several factors: the date of your flat application, the flat type, and your mode of purchase.
The following purchase modes will see a MOP of five years:
· Your flat is purchased from HDB
· Your flat was a resale, purchased from the open market with a CPF Housing Grant,
was a 2-room flat or bigger, and was applied for on or after 30 August 2010
Exceptions to the five-years MOP are as follows:
· Your flat was a resale, purchased from the open market with a CPF Housing Grant, and was applied for between 5 March to 29 August 2010 (3 years MOP)
· Your flat was a resale, purchased from the open market with a CPF Housing Grant, and was applied for before 5 March 2010 (2.5 years MOP with an HDB loan, 1-year MOP without an HDB loan)
· Your flat was purchased under the SERS (Selective En bloc Redevelopment Scheme). Your MOP will be either:
o 7 years from the date of flat selection, including the wait and occupancy time
o 5 years from the date of occupation
What restrictions during this period of MOP?
During the period within the MOP, HDB owners,
· They are not allowed to purchase any private residential property.
· They cannot rent out the whole HDB flats.
· They are not allowed to sell their HDB flat.
What can I do after MOP?
There are several options you can do, but never rush into any decision without any details strategized structure plan.
Which solution suit you most?
That depends on what kind of situation were you in when your HDB flats reach the MOP.
3 common approaches where HDB owner consider :
Options 1: Remain staying in the HDB flat.
For this option, I will suggest you check whether your flat is currently appreciating or the price is depreciating.
For a Built-to-order (BTO) flats, during the first three years, the valuation will be at its peak after MOP, the HBD flat is still new (only 5 to 7 years old in the resale markets), the renovation is still in good condition, some owners might consider exiting, so to obtain a higher profit.
Do consult a Real Estate professional for advice and in-depth understanding before you made any decision for advice and in-depth understanding before you made any decision.
Option 2: Proceed to buy a private residential