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No one would want to go through a separation or a divorce as soon as they have already made plans to settle down and build a family of their own. The trauma and heartbreak that comes with it would be so much more painful if you were to be together with your other half for a very long period of time, only to find out that this dream of starting a family with your significant other is not happening.
In Singapore, the usual practice that most young adults typically do is to first be financially stable, before either opting to ballot for a HDB BTO flat, buying a resale flat, or if the both of you are high earners, you would be able to afford a condominium or a private property. For most Singaporeans, the way to go is to ballot for a BTO flat. But what happens if couples were to break up AFTER applying for their BTO flat? Or what if keys have been collected and prior renovations have been done for the place, what happens next? There isn’t any specific period for breakups to occur, and it is certainly not a situation couples would want to put themselves in before their dream home arrives. But if it were to happen, the reason should be more than compelling to justify this break up.
Here are a few common scenarios where couples should find themselves in most of the time and what would happen from there on.
DISCLAIMER: Any prices quoted is being used ONLY as a reference to provide more clarity for readers.
SCENARIO #1: Break up occurs right after balloting of flat, no prior purchase/sales agreement has been signed
During this point in time, the loss that both of you stand to lose financially is not that significant as compared to the next few scenarios we will be running through. The first scenario is where couples have already made plans and balloted for a BTO flat, successfully securing themselves a slot with the HDB to select a unit from a development.
Here on, there would be an upfront payment of $10 application fee made to HDB and there will also be an option fee of:
- $500 – 2-room flexi HDB Flat
- $1,000 – 3-room HDB Flat
- $2,000 – 4 or 5-room HDB Flat
The option fees is to be paid during the booking of your BTO unit and the fixed amount varies on the type of BTO unit you are going for. If you were to forfeit and make the decision, deciding not to move forward to sign the purchase or sales agreement for your BTO flat, your losses are being capped minimally. But moving forward, if you were to re-apply for another BTO be it under a single status or with another significant other that you are together with in future, your chances would be lower as compared to first timers.
What do you stand to lose from here?
- You will be prohibited to take part in ANY BTO flat balloting for the next one year
- Any accumulated chances amassed from failed ballot applications previously will be nullified and relinquished under your name; restart from scratch – zero.
SCENARIO #2: Break up occurs AFTER sales and purchase agreement have been signed for, but keys have not been collected yet
If a break up were to transpire right after the purchasing process, both of you would stand to lose out more when it comes to your finances. This second scenario is where you have already chosen a desired unit, signed the papers for purchasing the BTO Flat, namely the sales and purchasing agreement to agree that you are buying this unit off the market from this BTO development.
What have you paid so far:
Application fees
- $10 application fee
Option fees
- $500 – 2-room flexi HDB Flat or,
- $1,000 – 3-room HDB Flat or,
- $2,000 – 4 or 5-room HDB Flat
Downpayment of the BTO Unit
- Fork out 5% from the 20% of the total purchasing price of the BTO unit
E.g.
BTO UNIT – $400,000
20% of $400,000 = $80,000
5% of that 20% ($80,000) = $4,000
Not everyone would have that much disposable income to fork upfront as we are talking about amounts that ranges anywhere from $300,000 and above. From here on, there would be 2 alternatives for couples to choose from:
- Take up a loan with HDB
Taking up a loan with the HDB would require every couple to make an upfront payment of 10% of the BTO unit’s price. (or 5% for those who are under the staggered downpayment scheme) A staggered downpayment scheme is where BTO flat buyers are able to split their down payment into 2 instalments. First instalment upon affixing your signature at the agreement of lease(typically 4 months from BTO unit booking), and second instalment is during the collection of the keys to your BTO unit.
- Take up a loan with a Bank
If couples were to choose to take up a loan with any banks, their upfront payment would be doubled as compared to taking up a HDB loan. Meaning to say, instead of a 10% upfront payment for the BTO unit, you now have to make a 20% upfront payment of the BTO unit’s price. Likewise, if you were fall under the staggered downpayment scheme, instead of 5%, it would be 10%.
What do you stand to lose from here?
- Option fees of $10
- Downpayment of the BTO Unit (5% of the BTO unit’s price)
- Buyer’s stamp duty
- Lawyer engaging fees
- Any housing grants(interests included) given
- You will be prohibited to take part in ANY BTO flat balloting for the next one year
- Any accumulated chances amassed from failed ballot applications previously will be nullified and relinquished under your name; restart from scratch – zero.
This stage is quite crucial as this is a big decision that is not to be taken lightly by the couple. If you were to back out at this stage, monetary loss would be inevitable. If you were to engage a lawyer from the HDB to assist you with the IRAS application for your buyer stamp duty, you are able to request for a refund and be relieved from the conveyancing fees, which is subjected to approval on a case by case basis. But if you were to hire a lawyer that is not working for the HDB, then all fees that were paid for would be harder to retrieve as a refund.
SCENARIO #3: Break up occurs AFTER key collection for BTO Unit
During this point, as couples are required to submit their ROM certificate to HDB to process in order to receive their keys, bringing them one step closer to their dream home. If the marriage were to be cancelled, or there is no ROM certificate submitted, HDB would require you to surrender and renounce your BTO unit back to them. HDB will regain possession of your BTO unit and offer you a monetary compensation which is totally up to their own discretion. Do note that the value compensated from HDB will definitely NOT be a FULL amount remunerated which might cost a substantial financial loss from the both of you.
What have you paid so far:
Application fees
- $10 application fee
Option fees
- $500 – 2-room flexi HDB Flat or,
- $1,000 – 3-room HDB Flat or,
- $2,000 – 4 or 5-room HDB Flat
Downpayment of the BTO Unit
- Fork out 5% from the 20% of the total purchasing price of the BTO unit
E.g.
BTO UNIT – $400,000
20% of $400,000 = $80,000
5% of that 20% ($80,000) = $4,000
Buyer Stamp Duty
- First $180,000 – 1%
- Next $180,000 – 2%
- Next $640,000 – 3%
- Remaining amount – 4%
Above percentages is calculated against price of the flat, on or after 20th February 2018
Lawyer Conveyancing Fees – usually above $1k
What do you stand to lose from here?
- Option fees of $10
- Downpayment of the BTO Unit (5% of the BTO unit’s price)
- Buyer’s stamp duty
- Lawyer engaging fees
- Any housing grants(interests included) given
- Registration fees of your mortgage escrow
- Mortgage stamp duty
- Survey costs
- Fire insurance poly
- Home protection scheme fees
- Balance of bank/hdb loan that has been dispersed out
- You will be prohibited to take part in ANY BTO flat balloting for the next one year
- Any accumulated chances amassed from failed ballot applications previously will be nullified and relinquished under your name; restart from scratch – zero.
Before even discussing about getting a house together, couples should talk to each other and discuss their plans, upon application of the BTO flat, both parties should not be feeling any sense of regret or turning back, and if so, there are alternatives such as couples counselling therapy to help improve the relationship or salvage it. Else if all else fails, it is better to file for a divorce earlier. For couples who have a rocky relationship or with partners who are emotionally unstable, they should take caution before making this decision to get a house together. Because here in Singapore, if you have already applied for a BTO, depending how deep you are in, as you progress through every stage, the amount of finances put in will only increase. Do not enter a marriage or a relationship if you do not foresee yourself with this other person long term as it will only cause more harm than good. Both parties will be emotionally and financially exhausted.
