HDB Minimum Occupation Period Guide For Homeowners In Singapore

If you own a HDB flat in Singapore, you must comply with the Minimum Occupation Period requirements if you want to sell it or rent it out, or acquire another private property. Here is everything you need to know about the MOP.

When hunting for a new home in Singapore, flats from the Housing and Development Board (HDB) are among the most affordable options. 

The trade-off is that, after acquiring your flat, should you at some point want to sell it off, rent it out, or buy another property, HDB has Minimum Occupation Period (MOP) guidelines that you must adhere to. 

Read on for a comprehensive guide to the MOP for homeowners in Singapore: what it entails, exceptions and anything else you may need to know.

What is HDB’s Minimum Occupation Period?

HDB flats have their purchase prices subsided for Singaporeans. They fall under the Ministry of National Development and are meant to provide affordable housing for citizens. 

The MOP is the minimum period that you must live in your HDB flat  before you can: 

• Sell it in the open market
• Rent it out
• Invest in other private properties either locally or overseas

The MOP was established in 1971 as a way of preventing speculation involving public properties. It’s worth noting that the MOP commences from the day you get the keys to your property; it doesn't include the time you're not living there.

For example, if you occupy a HDB flat for three years, and subsequently move overseas for one year, you still need to stay in the flat for two more years before selling, renting, or buying a private property. Therefore the MOP requirements do not take into account the two years you were away.

Besides these guidelines, it’s also worth noting that if you’ve applied for the Proximity Housing Grant or Married Child Priority Scheme, both of which are based on applying for flats within 4km of your parents, your parents will not be able to move until your MOP is up. 

Related to this article: How To Buy A House In Singapore: A Complete Guide (2023)

Prime Location Public Housing Scheme

HDB recently added a new clause that doubles the MOP to 10 years for the new Prime Location Public Housing (PLH) scheme. 

New Build-To-Order (BTO) flats under the PLH scheme must adhere to the revised MOP guidelines.

Related to this article: HDB BTO November 2022 Queenstown Review: Prime Location With MRT Stations Directly Across

Benefits of MOP

HDB flats were established to offer Singaporeans the option of buying affordable housing. It's not meant to be an investment scheme or get-rich scheme for investors. Hence, the MOP aims to restrict homeowners from disposing of public properties immediately after purchase for a profit.

This helps to prevent home buyers from pushing up prices of public properties, which essentially can lead to inflation by causing a spiral effect on the economy. Typically, the MOP helps discourage unscrupulous behaviours and thus has been extended to 10 years for PLH. 

Related to this article: HDB BTO Vs Resale: Is BTO Really A Lot Cheaper For A Young Couple?

Selling before the expiration of MOP

After the MOP has lapsed, you may opt to sell your HDB in the open market. However, you can appeal to sell your flat before the expiry of the MOP due to unforeseen circumstances such as: 

Bankruptcy

If you are trying to navigate a bankruptcy case or event, you may sell your flat and downgrade to a more affordable one. The HDB after reviewing your case may allow you to sell early.

If you are a Permanent Resident, you must first apply for the Consent of the Official Assignee before selling your flat. However, this condition is waived for Singapore Citizens.

Divorce

Divorce is one of the main reasons why most people sell their HDB flats before the expiry of the MOP. In this case, the parties involved can sell the property and share the sale proceeds. You must submit the documents below for HDB to consider your application: 

• A judicial separation writ
• Interim judgement certificate
• Divorce certificate if you are a Muslim
• An order from a court of law

Additional considerations

Besides divorce and bankruptcy, there are other factors that the HDB may consider when granting the go-ahead to sell your property early: 

• If you are unable to pay your mortgage due to several factors like lack of meaningful employment, you may apply to HDB to allow you to sell the flat before the expiry of the MOP.
• A terminal illness is valid grounds for applying for the sale of your HDB flat prematurely. However, HDB will evaluate your situation depending on the facts.
• Loss of citizenship is yet another basis to sell your HDB flat prematurely. For example, you may choose to migrate overseas permanently. Under such circumstances, you can request for your CPF funds. However, you must provide supporting proof that you will not be returning. 

Selling, renting, and purchasing property after expiration of MOP

Besides the MOP, there are other requirements you must meet when selling your HDB flat. For example, you must take note of the Singapore Permanent Resident and Ethnic Integration Policy quotas, which seek to ensure a healthy mix and integration among different groups of people. You can confirm your eligibility to sell your HDB flat at the HDB portal.

Singapore Citizens (or households with at least one citizen) can rent out the entire flat and acquire private properties locally or overseas after the MOP is fulfilled. However, Singapore Permanent Residents are not allowed to do so. 

Exemptions under MOP

Despite the widely known restrictions under MOP, there are some exemptions.

Renting out part of flat

If you own a three-room flat or bigger, you are allowed to sublet the other bedrooms while occupying at least one bedroom. You have to apply to HDB for permission, and ensure you meet  the following guidelines: 

• If you decide to rent out the extra rooms, the occupants must live there for at least six months. If you fail to meet this condition, your HDB contract will be revoked.
• Likewise, when renting out, you must comply with the rental and tenancy regulations. For instance, you must not lock the bedroom and pretend you occupy the room when in actuality you've rented out the entire flat. This can lead to confiscation of the flat.

Unable to occupy flat

If under any circumstances you can't live in the HDB flat, you can apply for permission to rent out the whole flat. However, this will lead to an extension of the MOP to cover the period when the flat was rented out.

A good example is when you are relocating to another country to pursue education or work. If you decide to go for two years, the MOP automatically extends by two years even if it is rented out during this period. 

MOP for different flat types

Most MOPs are five years, however there are exceptions for certain flat types. 

If you buy a resale flat from the open market and there's no CPF Housing Grant, the following conditions will apply:

MOP without CPF Housing Grant

3Gen flats 

3Gen flats were launched in 2013 and come second after the Executive flats in terms of size. While you can rent out extra rooms in most HDB flats during the MOP period, you can't do the same for 3Gen flats.

SERS flats

SERS is an acronym for Selective En Block Redevelopment Scheme which came into place in 1995. Its objective is to refresh and renovate older estates.

If your HDB flats fall under this scheme, you will be compensated at the prevailing marketplace rate. 

You can also renew a fresh 99-year lease at a new flat located nearby. Other benefits include admin fees waiver and covering of moving expenses. 

The MOP under this program is seven years (from the flat selection date) instead of the usual five years.

One-room flat bought without CPF Housing Grant

If you buy a one-room flat without using the CPF Housing Grant, you'll be exempted from abiding by the MOP guidelines. However, homeowners are prohibited from renting out one- or two-room flats. 

At the moment, HDB no longer constructs one-room flats as they are considered too tiny.

Flat purchased under Fresh Start Scheme

The Fresh Start Scheme was established in 2016 to assist second-timer families with small children in public rentals. 

The scheme offers grants to such families to enable them to buy an HDB flat. Because of these grants, the MOP extends to 20 years, the longest period currently possible. The lease is also shorter at 45 to 65 years, unlike the normal 99 years.

Conclusion

Being familiar with the MOP guidelines will help you determine whether a HDB flat is a worthwhile purchase for you, or to suss out your timeline for purchasing various properties. While HDB flats are a uniquely affordable asset, they may not be for everyone due to the accompanying restrictions. 

When financing a new home purchase, interest rates of home loans can make a big difference in terms of how much you eventually pay. Compare the best home loan rates to save as much as you can while securing your dream property. 

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