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Should you be considering an Executive Condo?


We’ve all heard of the 5Cs in Singapore – Cash, Car, Credit Card, Country Club, Condo. While it’s become a tongue-in-cheek joke over the years, owning a condo specifically is still a dream for most homeowners. Of course, it’s not always the most affordable option, and that’s where Executive Condominiums, or ECs, come in.


In the past few years, ECs have gained a significant momentum in terms of popularity in the real estate market. An EC is somewhat of a hybrid – full condo facilities, but with certain income prerequisites, and priced at a much more affordable price as compared to normal private condominiums. ECs are incredibly attractive options, meeting the needs of buyers who want a more luxurious lifestyle at an affordable price.


So, should you be considering an EC? Here’s some of the most important factors you should consider when weighing your options.


CPF Housing Grants

First-time homebuyer? Here’s some great news! Purchasing a new EC will make you eligible for CPF housing grants, allowing you to offset the cost of a property and alleviate the financial burden. The two main CPF Housing Grants available for ECs are the Family Grant and the Half-Housing Grant. Although there are certain prerequisites to obtaining the grant, such as your citizenship and household income, these grants will make ECs a much more affordable option for the average Singaporean.


Capital Appreciation

In the past, buyers were concerned about the potential resale value of ECs, as that would affect their profits. However, it's important to note that ECs are extremely subsidized, being a public-private housing hybrid. This means that while ECs are subject to HDB regulations for the first 10 years, including having to fulfil the 5-year minimum occupancy period (MOP), ECs will be privatized in the 11th year. Historically, this privatization has led to much higher capital gains than resale condos, making it a good option for longer-term investments.


No Upfront Additional Buyer Stamp Duty (ABSD)

For HDB upgraders, this is an important consideration. In Singapore, if you own more than 1 property, you’ll usually need to pay ABSD, as part of a cooling measure imposed by the government. This presents a problem for HDB upgraders, who might need to purchase a condo while still holding their HDB. If they do so, they’ll need to pay a hefty ABSD upfront, and can then apply for a remittance once they’ve sold off their HDB, as long as they sell their HDB within 6 months of condo purchase.


However, for ECs, there’s no ABSD needed, meaning HDB upgraders are free to purchase their EC first, before selling their HDB, without the worry of a hefty 12% ABSD hanging over them if they are unable to sell their HDB in time.


Considering an EC, but unsure if it would be a good purchase? UnlockHome is here to guide you through the process. Drop by our website at www.unlockhm.com, or give us a call today. We look forward to hearing from you!


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