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💡Read this update: How we decoupled our BTO
We applied for our BTO in 2019 under joint tenancy, and switched to owner-occupier scheme in end 2023, right before key collection!
This meant that instead of the flat being split 50-50, 👦🏻 owns 100% of the flat while 👩🏻 owns 0%.
✨ WHY WE DECIDED TO DECOUPLE
Mainly the flexibility to buy a second property in future! With 👩🏻 owning 0% of the flat, we can buy a second property and avoid paying 20% ABSD (additional buyer stamp duty) + get a higher loan quantum.
In our case, the flat was already mostly financed by 👦🏻 since he has more savings and started working earlier. While decoupling is hugely based on the trust and dynamics in a relationship, this also meant that 👩🏻 wouldn’t “lose out” financially in the worst case scenario.
✨ BUT THERE ARE ALSO MANY THINGS TO CONSIDER
- HDB grant amount will be based on combined income
- HDB loan amount likely to be lower as it’s based on 👦🏻’s income only
- CPF deductible solely from 👦🏻, which means that the mortgage can’t be financed by 👩🏻’s CPF
- Additionally, 👩🏻 is subjected to the same terms during MOP period — need to stay at the flat, cannot own other properties, etc.
✨ IF YOU’RE LIKE US AND DECIDED TO DECOUPLE AFTER LEASE SIGNING
- HDB will re-assess your income at the point of decoupling; this means that they may claw back grants OR transfer it to the owner’s CPF only if it’s already been disbursed + the loan amount will likely change
- It’s possible to make the switch and decouple the flat anytime up till key collection!
- If you’re not married, the Seller Stamp Duty would cost an additional ~$2735 on top of the sub-transfer fees of $385. We were lucky that our wedding happened mid-way through this process, and we only paid the $385
- HDB may ask for the reason behind the decision to decouple - we just shared that the arrangement suited us better :)
Have more questions on decoupling and the owner-occupier scheme for a BTO? Leave a comment below!👇🏼
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