How to Upgrade From an HDB flat to an Executive Condo (EC)?

Offering gated-community living at greater affordability, Executive Condos (ECs) are a popular choice among HDB upgraders. Here’s everything you need to know to plan your housing upgrade.

Given how obsessed with progress we as a nation are, it is not surprising that a fair number of Singaporeans aspire to elevate their living standards. Yet, houses with white picket fences aren’t readily attainable due to how scarce land is. No, we’ve instead developed an insatiable appetite for gated community living, prominently featuring swimming pools, tennis courts, glass-encased gyms and – of course, sky bridges, preferably overlooking downtown.

For the upwardly mobile, private condominiums remain a treasured life goal that marks the mental threshold between “making it” and “made it”. But for those who are unable to reach such a lofty goal, Executive Condos (ECs) aren’t too shabby a choice either. 

Table of contents

• What is an Executive Condominium (EC)?
• How to upgrade from an HDB flat to an EC?
• Comparison: ECs vs HDBs
• Comparison: ECs vs Private Condominiums
• What finances are involved in upgrading from HDB to EC?
• Frequently asked questions (FAQs)

What is an Executive Condo (EC)?

Executive Condos (ECs) are offered as a housing option for Singaporeans who aspire to elevate their living conditions beyond HDB flats, but find private condominiums and other private housing financially out of reach. 

The first EC, Eastvale in Pasir Ris, was launched in January 1999. Since then, ECs have continued to enjoy high demand from Singaporean homeowners, As at 2023, a total of 67 EC projects have been completed, with more in the pipeline.

Essentially, ECs offer the advantages of both public and private housing. They are designed and developed by private developers, providing designs, facilities, and amenities on par with private condominiums. Yet, they are considerably more affordable, partly due to land price subsidies provided by the government. This winning combination perhaps explains their enduring appeal among aspirational homeowners. 

Eligibility criteria to apply for an EC in Singapore

The following table summarises the main eligibility criteria to apply for an EC. Note that there may be other conditions or requirements involved, according to your personal circumstances. 

How to upgrade from an HDB to an EC?

Here’s a summary of the overall process you can expect when upgrading from an HDB to an EC. 

Step 1: Browse for upcoming EC launches online

Developers will announce the launch of new EC projects through the media and various online channels. Property agents maintain websites tracking such announcements, making for a handy (and free) resource you can use to browse to start your EC search.

You can also subscribe to the mailing lists or follow property developers' social media channels whose projects interest you.

Step 2: Make your application

Once you have settled on an EC you like, you should submit an application to the developer. A variety of methods – ranging from online balloting, to walk-in applications – may be offered, depending on the needs of the developer, and the popularity of the project. 

Step 3: Receive your application outcome

Once the application period is over, your developer will inform you of the outcome of your application. If your application is accepted, you can move on to the next step. Otherwise, you can try again with another developer or project. 

Step 4: Choose your EC unit

Successful applications will be invited by the developer to choose their EC units. You will be offered the Option to Purchase, upon acceptance, an Option Fee of 5% of the purchase price is payable. 

The Option Fee will be offset against the EC’s purchase price. 

Step 5: Sign the sale and purchase agreement

You will be invited to sign the sale and purchase agreement. At this time, the balance downpayment of 15% is required. This may be paid using your CPF funds or in cash. 

See also: With Higher OA Contributions, Should I Upgrade to a Larger Home?

Step 6: Collect the keys to your EC 

Once you have signed the sale agreement and paid the deposit, there’s little else left to do but to wait for TOP (Temporary Occupation Permit). That’s when the EC has completed construction and you can collect the keys to your unit. 

Once you have done so, you can proceed with your renovation works. If no additional renovations are needed, you can move in and start enjoying your new home! 

ECs vs HDBs – Are ECs a better choice than HDBs?

Additional Buyer’s Stamp Duty (ABSD)

ABSD is levied when purchasing a second residential property. However, this does not apply if you’re upgrading from an HDB to an EC. 

As such, you can go ahead and apply for your EC without having to pay extra stamp duties, but note that this only applies if it’s your first EC. 

Housing grant

When upgrading from an HDB to an EC, the latter counts as your second subsidised flat. This means that you will have to pay a resale levy, which effectively reduces the amount of housing grant for your EC. (Not to be mistaken with HDB grants.)

How much resale levy you have to pay is determined at the point you book your second subsidised flat. It applies regardless of ownership type (joint-tenancy or tenancy-in-common) or shared interest in the flat. 

Payment must be made using your flat sale proceeds and/or cash, as follows:

Here’s how much the resale levy costs, based on flat type and applicant status:

HDB concessionary loan

When purchasing an EC, you cannot apply for the HDB Concessionary Loan, which is a home loan package reserved only for those buying an HDB flat.

Instead, you will need to apply for a bank mortgage loan, the interest rate of which is impacted by greater macroeconomic conditions, including U.S. Federal interest rates, inflation levels and such. 

That’s not to say that bank mortgages are an inferior option, and you will immediately be put at a disadvantage. Rather, it is important to recognise that a bank mortgage requires slightly more active management on your part, in order to benefit from the most optimal interest rates as you go along. 

See also: Getting a Bank Loan For HDB vs HDB Housing Loan

Minimum Occupancy Period (MOP)

Both HDB flats and ECs have the same MOP of five years. During the MOP, the unit may not be rented out in whole, which means those looking to upgrade to an EC for investment purposes will be thwarted.

There’s a bit of leeway here though. You can still rent out spare bedrooms during the MOP, provided you observe the prevailing rules, including maximum occupancy and registering your tenants with HDB. 

Here’s another wrinkle with ECs in regards to MOP. ECs are considered as HDB flats during the first 10 years. They are only considered as private property from Year 11 onwards. As foreigners aren’t allowed to purchase HDB flats, this means you will face a smaller pool of potential buyers during Years 6 to 10. This could potentially lock you out of bull runs, depending on how the market goes.  

But of course, all that doesn’t matter if you’re not planning on renting out your EC.

ECs vs private condominiums – Which is a better upgrade option?

Affordability

Private condominiums, while sought after, are priced higher than ECs. Bear in mind that due to the Total Debt Servicing Ratio (TDSR) rules, your total monthly debt repayments (including mortgages) cannot exceed 55% of your gross monthly income. 

(To clarify: Mortgage Servicing Ratio, which caps mortgage loans to 30% of gross monthly income only applies to HDB flats and ECs still within the MOP. It does not apply to purchases of private condos.)

This may pose difficulties for homeowners who do not have a high enough salary, as they may be unable to get a large enough mortgage. 

In this case, choosing an EC would be the more prudent choice (but you have to mind the MSR). Besides, ECs still offer a gated living experience, so there really isn’t too much of a downgrade here. 

Additional Buyer’s Stamp Duty 

There’s no escaping ABSD if you choose to upgrade to a private condominium. At 20% of the purchase price for your second property, and going up to 30% subsequently, that is a considerable sum of extra expenses to bear. 

Meanwhile, as discussed earlier, no ABSD is payable when upgrading to an ECs.

Bank mortgage loan 

Whether you’re purchasing an EC or a private property, you will need to apply for a bank mortgage loan. This means you will need to manage your home mortgage package to navigate through macroeconomic developments, as discussed in the previous section. 

Minimum Occupancy Period (MOP)

Here, private condos have the advantage over ECs. As condominiums are private developments right from the start, they are not subject to HDB rules and regulations such as MOP. 

This means that you can put your brand new private condo on the rental market the moment you collect your keys, if you choose. 

Financing the upgrade from HDB to EC

There are two payment schemes available when paying for ECs, but which mode you are allowed to follow is up to the discretion of the developer. Be sure to clarify what your payment schedule would look like so you can plan accordingly. 

Progressive Payment Scheme

This is also known as the Normal Payment Scheme, and requires payments to be made as certain milestones are reached in the course of development. There are typically 10 stages involved.

In case you’re wondering how these payments will be made with your mortgage loan, basically, the stipulated amounts will be paid out from your loan. 

As such, some of these payment deadlines may be accompanied by an increase in the monthly payments of your mortgage. Be sure to clarify with your bank if this would be the case. 

Deferred Payment Scheme 

The second payment scheme is the Deferred Payment Scheme, which is much simpler in execution. Rather than fixed payment milestones, you need only pay the 5% OTP fee, the 15% downpayment, and the stamp duties. 

As for the remainder, you need only pay a further 65% upon TOP, and the final 15% when you receive the CSC. 

With the Deferred Payment Scheme, you have a longer period to go before you have to start paying for your EC. Importantly, you won’t have to service both your HDB and EC mortgages at the same time. Instead, you will have more leeway to sell off your HDB unit and use the proceeds to help fund your EC payment. 

Note though that choosing this payment scheme may cost an additional 3% to be tacked to your final tally, but if it makes your finances easier to manage, this fee may be well worth it.

Frequently Asked Questions (FAQs)

#1: Can you buy an EC if you already own an HDB flat?

No, you cannot own both an EC and a HDB flat at the same time. You can apply for an EC while owning an HDB flat, but you will need to dispose of your HDB flat within 6 months of the TOP of your EC.

#2: Is it worth it to upgrade from an HDB flat to an EC?

While it is true that ECs are worth more than HDB flats, they also cost more in the first place. Some investors may aim to upgrade to an EC in the hopes that property values will rise high enough to provide them with a windfall, while others may prefer to spend less on housing and use the difference to invest in the market instead. 

Ultimately it boils down to your individual goals and preference, including how much premium you place on a nicer living environment with easier access to amenities. 

Read these next: 
Can Foreigners Buy Property in Singapore?
Should You Invest in A Commercial Property in Singapore?
Pros & Cons: Upgrading From HDB to Condo
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