Good news to owners of the flat who has gotten a whopping amount of profit from the sales transaction. Surely anyone who read this article will be wondering if it is a wise choice to buy a BTO that is near to MRT station.
Price around the prime location of HDB estate for a 5 room flat ranges from $5xxK to $7xxK. And all the transaction that cross the $1 million mark is from the high floor units. Which the profit the owner are getting estimate ranges from $2xxK to $4xxK, which also depend on which year that they brought due to the constantly rising cost.
Given the building time of 3 years and 5 years minimum occupation period (MOP) each owner has to fulfill. This breakdown the earning per year at a capital gain of $31K+ to $56K+, or 3% to 5% annual capital gain estimate.
While this is a decent gain, owner of the HDB flat are not allow to rent out the whole flat for the first 5 years, unlike private property.
For private property, you can immediately rent out once the owner collected the key. And private property does not have Minimum Occupation Period of 5 years. Owner of the private property, however, will need to fulfill the 3 years holding period in order to avoid the Seller Stamp Duty (SSD). Earning for private property can be in the same range as BTO or even higher.
Below is a table to show the direct difference and each category benefits.
click here for the full article: http://www.straitstimes.com/singapore/housing/three-hdb-resale-flats-breach-1-million-mark
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