Treatment of Essential Occupiers in HDB Flats as Similar to Owners for Fulfillment of Minimum Occupation Period

7 Assoc Prof Jamus Jerome Lim asked the Minister for National Development (a) what is the justification for treating essential occupiers of HDB flats similar to HDB owners with respect to having to fulfil the minimum occupation period for purchase of private property, while treating such essential occupiers as non-owners for liability for Additional Buyer’s Stamp Duty; and (b) whether the Ministry will consider harmonising the treatment of essential occupiers in both cases.

The Second Minister for National Development (Ms Indranee Rajah): Mr Speaker, the Minimum Occupation Period (MOP) ensures that Housing and Development Board (HDB) flats are purchased for owner occupation. While essential occupiers are not flat owners, they form part of the core family nucleus that determines the household’s eligibility to own an HDB flat. For example, when a married couple buys an HDB flat, both of them must be listed in the flat application in order to form the core family nucleus. HDB allows both of them to be listed as co-owners, or one of them as owner and the other as an essential occupier. Hence, essential occupiers are required to fulfil the MOP before they can purchase a private residential property. However, essential occupiers are not allowed to use their Central Provident Fund (CPF) or any housing grant received to pay for the flat. They also cannot be a mortgagor of the housing loan for the flat.

The Additional Buyer’s Stamp Duty (ABSD) was introduced as a cooling measure to moderate investment demand in private residential property and promote a sustainable market. Broadly speaking, ABSD is applied based on the buyer’s profile and the number of residential properties the buyer owns. As essential occupiers do not own their HDB flat, it is not included in their residential property count. Hence, they do not incur ABSD if they are Singapore Citizens buying their first private residential property after MOP. Permanent Residents (PRs) and foreigners will incur ABSD.

As shared previously in this house, the vast majority of married couples buy HDB flats as co-owners. Only a small number list a spouse as an occupier, often for practical reasons with no intention to invest in a private residential property after fulfilling MOP. For example, a non-resident, married to a Singapore Citizen, cannot be an owner of an HDB flat, and will have to be listed as an essential occupier.

We will remain watchful of market trends and adjust our policies where needed, to ensure that the property market remains stable and sustainable.

Mr Speaker: Assoc Prof Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): I thank Minister Indranee for the explanation. The thrust of my question, the context is in part because of the increasing trend of couples that are getting older before they finally get married. As a result, some of these may end up being married with already substantial independent assets, which could include a private property. When they get married, if they do not have enough resources to purchase a larger private property, they hope to purchase an HDB, but instead, they are forced to sell off these independent assets that they would have acquired over the course of their professional careers.

So, I am wondering if there is some scope for these kinds of individuals who do get married later, entering the marriage already with significant independent assets, whether there could be some waiver for these kind of MOP requirements.

Ms Indranee Rajah: If there are instances of specific hardship, they can write in and appeal. The Ministry of National Development and HDB will consider on the merits. But the broad general policy principle which I have outlined does remain the principle underpinning the policy.