Minimum Occupation Period: What Prospective Homeowners Should Know
In Singapore's bustling real estate landscape, understanding the Minimum Occupation Period (MOP) is crucial for homeowners and prospective buyers. Established by the Housing and Development Board (HDB) in 1971, the MOP aims to deter the quick turnover of public flats by owners eyeing easy profits. It's a period mandated by HDB during which homeowners must occupy their flat before they can sell or rent it out. This article, brought to you by Clicks®, a leading real estate-focused online social networking platform, delves into the intricacies of the MOP to guide you on your HDB journey.
What is the Minimum Occupation Period for HDB rent?
The Minimum Occupation Period (MOP) for HDB rentals varies based on several factors including the purchase mode, flat type, and date of flat application. Below is a table summarizing the MOP based on these factors:
Flat Purchased from HDB under Prime Location Public Housing (PLH) scheme
BTO flats in Choicer Location under Prime and Plus Category
Flat Purchased from HDB under Build-to-Order (BTO), or Executive Condominium (EC) schemes
Design, Build and Sell Scheme (DBSS) flat purchased from a developer
Flat purchased under the Selective En bloc Redevelopment Scheme (SERS) with Portable SERS Rehousing Benefits
Resale flat purchased from the open market with CPF Housing Grant
Flat purchased under SERS
7 years from the date of flat selection OR 5 years from the date of occupation
For instance, if you purchase a resale flat from the open market without a CPF Housing Grant:
Type of Property and Purchase Mode
2-room flat or bigger which application date is on or after 30 August 2010
2-room flat or bigger which application date between 5 March to 29 August 2010
2-room flat or bigger before 5 March 2010 with an HDB loan
2-room flat or bigger before 5 March 2010 without an HDB loan
How does the MOP affect me if I want to sell/rent my HDB flat?
When you plan to sell your HDB Flat:
You are not allowed to sell your HDB flat during the MOP. This means you must occupy the flat for the specified MOP duration before you can put it up for sale.
After the MOP is met, you can sell your HDB flat on the open market to Singapore Citizens or Permanent Residents.
When you plan to rent Out your HDB Flat:
During the MOP, you are generally not allowed to rent out the entire HDB flat. However, there are some exceptions: If you are renting out bedrooms within your flat while continuing to reside there, this is typically allowed during the MOP. Special permission may be granted under certain circumstances, like if you have valid reasons such as overseas work assignments.
Renting Out the Whole Flat After MOP:
Once the MOP is fulfilled, you have the flexibility to rent out the entire HDB flat to anyone, including Singapore Citizens, Permanent Residents, and foreigners.
Imagine a couple, Mr. and Mrs. Lee, who purchased an HDB flat under the Build-to-Order (BTO) scheme in 2018. They are now keen on relocating to a condominium for a change of environment in 2023. Here's how the MOP affects their decision:
Scenario 1 (Selling): Since the MOP for BTO flats is 5 years, they are eligible to sell their HDB flat on the open market in 2023 as they have fulfilled the MOP.
Scenario 2 (Renting): If the Lees prefer to keep their HDB flat and rent it out, they can do so only after fulfilling the MOP. Now in 2023, they can rent out their entire flat to another family while they move to the condominium.
This example illustrates that fulfilling the MOP is crucial for homeowners looking to either sell or rent their HDB flats. It also highlights the importance of planning ahead and being aware of the MOP's impact on your real estate decisions.
Can I Sell My HDB Before MOP Is Over?
In most cases, you are not allowed to sell your HDB flat before the Minimum Occupation Period (MOP) is over. The MOP is a set period during which you must occupy the HDB flat as your primary residence, and selling it before the MOP is completed is generally not permitted.
However, there are some limited circumstances in which you may be granted special approval to sell your HDB flat before the MOP has been fulfilled. These circumstances typically involve extenuating circumstances, such as:
Divorce: If you are getting a divorce, and the court orders the sale of the HDB flat as part of the divorce settlement, you may be allowed to sell it before the MOP.
Death of Owner: In the event of the death of an owner, the flat may be sold even if the MOP hasn't been completed.
Financial Hardship: Under certain financial hardship situations, you may be granted permission to sell the flat before the MOP expires. However, this is subject to case-by-case evaluation by HDB.
Other Exceptional Circumstances: In rare cases, if you can demonstrate exceptional circumstances, HDB may consider granting permission to sell the flat early. Such cases will be reviewed on an individual basis.
It's important to note that obtaining permission to sell your HDB flat before the MOP is challenging, and approval is not guaranteed. You will need to contact HDB directly and provide supporting documentation for your case. Before making any decisions, it's strongly advisable to consult with HDB or a legal advisor to understand your specific situation and the requirements for early sale if it applies to you.
What is the 15 month rule for HDB?
The 15-month rule is a recent regulation introduced to moderate demand in the HDB resale market. This rule primarily affects private residential property owners (PPOs) and ex-PPOs who wish to purchase a non-subsidized HDB resale flat. Here's a detailed breakdown of the 15-month rule and its implications:
Who is Affected?
Private Residential Property Owners (PPOs) and Ex-PPOs: Individuals who currently own or have previously owned private residential properties are required to adhere to a 15-month wait-out period before they can purchase a non-subsidized HDB resale flat1.
What Does the Rule Entail?
Wait-out Period: The rule imposes a 15-month wait-out period on PPOs and ex-PPOs. This period begins from the date they sell their private property.
Exceptions to the Rule:
Seniors Aged 55 and Above: Seniors who are transitioning from their private property to a 4-room or smaller resale flat are exempted from the 15-month wait-out period1.
Documentary Proof: Individuals can be exempted from the 15-month rule if they have obtained an Option to Purchase (OTP) before a specific cutoff date, alongside proof of payment of the option fee or the option exercise fee.
Curbing Speculation: The 15-month rule is aimed at discouraging short-term property flipping and moderating demand in the HDB resale market, ensuring that HDB flats remain accessible and affordable for Singaporeans who need them the most.
Suppose Mr. Tan, a private property owner, decides to sell his condominium and plans to buy an HDB resale flat to downsize. The 15-month rule mandates that Mr. Tan must wait for 15 months after selling his condominium before he can purchase an HDB resale flat. However, if Mr. Tan is aged 55 or above, he is exempted from this rule, allowing him to transition to an HDB resale flat without the wait-out period.
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