09 Jun 2021
Should I sell my 5-room resale HDB and downgrade to a 4-room BTO HDB?
Currently, I'm in the dilemma of wanting to sell off my 5-room resale HDB in a good mature estate with 45 years of tenure left and downgrade to a 4-room BTO HDB (SBF).
With most of my children grown up in university and soon to leave the nest within the next 5 years, I thought about wanting to downgrade in hopes of reducing the bills, provide better amenities for my remaining little ones and just wanting a new change of pace.
However, the only problem going about is that I'm reaching my age (I'm 54 this year) into retirement and was unsure if I could still use my CPF and how much of my CPF money could I use to fund to pay off the new building?
Would appreciate any expertise on this issue especially in my case of being considered as a second-timer BTO buyer. Thank you in advance!
I think it all boils down to a matter of financial ability and preferences. Based on your situation above, it sounds like you're looking to obtain some savings from the downgrade; however, much of it depends on which estate you're looking at for the 4-room.
If you're looking in the same estate, I imagine that a 4-room SBF with 99 years lease left would potentially cost more than your current 5-room with 45 years left, which could potentially negate your intent to obtain some savings. However, this makes sense if you're looking to move somewhere less mature (and therefore cheaper), or are just looking for a new but smaller place to retire with cost not as big an issue.
Assuming you'd still like to go ahead, you'll need to pay a resale levy off $45,000 since you're a second time buyer of subsidised housing. I believe this levy is payable upon the later of two dates: (1) date of key collection; and (2) sale of existing flat.
In terms of using your CPF - there shouldn't be an issue using your CPF-OA to fund your new house, with the same rules applicable for amount of cash/cpf required depending on your choice to pay it in full, with hdb loan or with bank loan.
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Just sharing what i know, should consult an experience property agent
1) Approximate your property price, similar size around your area . Thru propertyguru or similar platform.
(Actually should look at recent transaction price, using squarefoot, but need to subscribe, we not property agent so dont waste $$$)
2) Then look at the the house, you want to buy. How much?
3) Then check your cpf. How much u paid for house and accured interest. Because after u sell need to pay back.
4) if is it a positive sale, proceed, if not stay.
5) another problem is because your house less than 60 lease, difficult to find buyer. Because the buyer age + hdb lease must be 80 years else cant use CPF to buy. If your house less than 30 than buyer cant use cpf. Will have difficulty to find buyer
6) you must do it before 55 years old. Before your RA is created. Else once you sold your house. Your money will go straight to RA till BRS reach. Only excess $$$ will remain in ur OA. Then u will have problem.
7) another thing is bank loan is up to 65 years old. Means shorter loan tenture... u need to pay more monthly.
The whole paper works is actually quite complicated, best to consult an agent
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