Can't meet minimum sum? Divorce and buy a second property.

[Wt_know]

21 minutes ago, Vratenza said:

There were quite some anecdotal stories of early twenties couples applying and bought penthouses of Executive Condos costing 1.8-2+ mils.

As we know, to be eligible for Exec Condo, there is a limit on the combined income and even if we take the max salary cap, no way can they afford these penthouses without any rich lau peh lau bu's help, especially this early in their working life when their CPF is just starting to accumulate.

yup ... that's the big hoo haa story that change regulations EC penthouses cannot build super big liao ... LOL

EC suppose to be the "intermediary gap" for those cannot afford PC ... but WTF a $2M EC unit .... ka na sai

all these loopholes and "hacks" 1-by-1 kena screw by people to treat BTO and EC with public funding as prata flipping to game the system for windfall

Edited September 8, 2022 by Wt_know

[Jamesc]

One man is China told his wife divorce to buy a second property then he married his mistress.

[Arogab]

Must have been a true couple. Both are so like minded and really all out to make some money. 

But the marriage is suppose to be a binding thing and if these are broken and both are not like minded. Sure will have trouble😂

See the thread posts, all sort of idea comes out liao🤣

[Jamesc]

If don't like MIL can consider asking wife to divorce to buy second property and then marry an orphan.

[Jman888]

5 minutes ago, Arogab said:

Must have been a true couple. Both are so like minded and really all out to make some money. 

But the marriage is suppose to be a binding thing and if these are broken and both are not like minded. Sure will have trouble😂

See the thread posts, all sort of idea comes out liao🤣

[Arogab]

1 minute ago, Jman888 said:

This idea cannot give to @Jamesc, later he marry the mistress and marry the mistress. 

Ops, more MIL🤣

[Jamesc]

One bitten twice shy.

He will only marry an orphan.

24 minutes ago, Arogab said:

This idea cannot give to @Jamesc, later he marry the mistress and marry the mistress. 

Ops, more MIL🤣

 

[Windwaver]

1 hour ago, Ricky_doodle said:

Very easy to know what. No dispute between both parties and the divorce case won't drag, as compared to a geniune one. 

That's a good one 

[Strat]

4 hours ago, Jman888 said:

the kids are smart nowadays,  they probably want to disown their parents if they find them too poor

 

if the parents too rich, maybe ask them quickly hand IC and meet RadX?  

[Sosaria]

4 hours ago, Wt_know said:

besterest for young couple don't even get married ....

each hold on to 1 x HDB ... can rent out ... some more get all kind of subsidy ... u-save voucher .... rebates ... etc

then rent and live in condo ... piak piak + gym + swimming pool   

1 x hdb can rent out $3.5K now ... 

Piak piak better remember wear condom. Otherwise all the profits/gains will be dented by having kids

 

[1fast1]

8 hours ago, Windwaver said:

Been happening for some time but this is a very good case where both cannot meet minimum sum 

https://singaporeuncensored.com/couple-divorce-so-they-can-buy-another-hdb-flat-to-earn-rental/

COUPLE DIVORCE SO THEY CAN BUY ANOTHER HDB FLAT TO EARN RENTAL

ByHello Its me

September 8, 2022

Bumped into an ex-colleague (who is the same age as me) earlier and had an interesting brief catch up chat over coffee.

He and his wife are now divorced. But except that there is nothing wrong with their marriage and they are still living together. The sole purpose of getting the divorce is to be able to buy ANOTHER HDB FLAT (under the singles scheme). So they collectively own two HDB flats as two single individuals.

You see, he was a manager that had recently been displaced by cheaper foreign labour. As all of us know, at our age, there is a real challenge in getting a job that would pay him a decent salary. Yes, there are lots of employers that wants to hire him. He is, afterall, a qualified professional with a wealth of 30 years’ experience behind him. However, these greedy employers are just not willing to pay him his worth and wants to exploit his skills and experience for a mean salary. He refused to prostitute his skills for a low salary. He end up driving a cab that (ironically) pays him more than any of the offers that he had received.

He won’t be getting any of his CPF money next year because he won’t be able to meet his minimum sum. All his past CPF contributions (more than $800K) had already gone into his 5rm HDB flat that they are staying in now.

His wife has some CPF left but she (too) won’t be able to get a single cent out in a few years’ time because she (too) won’t be able to meet the minimum sum as well.

So they planned, got a divorce and bought a second HDB flat just before they could lock away her CPF as the minimum sum in her CPF.

They then moved into the new flat and rented their older flat out legally because he had already and duly met the “Minimum Occupation Period” required for the legal renting out for that flat. And this rental income will serve an additional passive retirement income.

When I asked if he would be flouting any HDB regulations by doing that, he replied,

1) They are legally divorced and they are both legally SINGLE now.

2) He can retain the existing 5rm flat under the singles scheme and his wife is eligible to buy another flat under the singles scheme.

3) There is no law in this land that prohibit two single persons (divorced or not) from living together as a couple regardless if they were previously married or not.

4) At his age, being legally married is just a marital status. It doesn’t stop them living together as man and wife. They both had made their wills.

5) Instead of having the money stuck as a minimum sum in their CPF, they might as well utilise whatever that they can get out of their CPF so as to get an alternative passive income since:-

– – a) they won’t be able to get any of their CPF money anyway

– – b) even when they do get their CPF monthly payouts after the age of 65 yrs old (which is still a long way to go), the amounts will be so miserable that they would hardly be able to do anything decent with it anyway…

– – c) so…. they might as well get a second HDB flat with whatever money that they can siphoned out from their CPF (before the money is being locked away instead under the minimum sum)…. rent it out and (at least), the monthly rental income of $2,500 can help them live a more dignified retirement IMMEDIATELY (right away) rather than waiting till they reach 65 yrs old for that miserable delayed CPF payout that is so insignificant….

Thinking aloud now…. could this be the new norm of retirement in Singapore that Singaporeans will be planning for? Wouldn’t it be so sad that we have to come to this, in order that we can respond to how our hard-earned CPF money is being wilfully and forcefully withheld from us…

You have a gahmen that social engineers its people enough, sooner or later you're gonna have people social engineering the gahmen.

[Voodooman]

7 hours ago, Wt_know said:

yup ... that's the big hoo haa story that change regulations EC penthouses cannot build super big liao ... LOL

EC suppose to be the "intermediary gap" for those cannot afford PC ... but WTF a $2M EC unit .... ka na sai

all these loopholes and "hacks" 1-by-1 kena screw by people to treat BTO and EC with public funding as prata flipping to game the system for windfall

Soon we will be like HK.

[Windwaver]

On 9/8/2022 at 7:21 PM, Sosaria said:

Piak piak better remember wear condom. Otherwise all the profits/gains will be dented by having kids

 

You mean swallow instead? 

[Windwaver]

This one better 

https://stackedhomes.com/editorial/we-make-300k-per-annum-should-we-pay-absd-for-a-2nd-property-for-investment-when-we-own-a-5-room-hdb/

We Make 300k Per Annum. Should We Pay ABSD For A 2nd Property For Investment When We Own A 5-Room HDB?

Hi StackHomes, 

Foremost, thank you for your insightful articles and unbiased views on residential matters provided to the community and I believe many had benefited from it. 

Owning an investment property is an aspiration of many and to be honest, the thought of purchasing a 2nd property for investment has always been a frequent discussion topic with my spouse. We hope to seek your advice to help us assess our situation in a better perspective. 

My spouse and I are in our late 30s. We are currently staying in a 5 room resale HDB flat bought in 2014 in the West which has 73 years lease remaining. We are unlikely to move out from where we are staying in the next 5 years as my children are studying in the nearby schools with my parents being the caregiver. 

On the financial front, we have a combined income of $300k per annum, combined CPF OA balance of $300k and cash savings with liquidity at $500k. Our current HDB is still not fully paid but we had set aside cash savings for a full loan redemption to prepare ourselves should we decide to purchase a 2nd property as that will enable us to secure the maximum loan for the 2nd property. We are also fully aware on the ABSD that is slapped against us with that decision. 

To share with you on our thoughts of purchasing a 2nd property: 

Generate rental income (though it may take a few years to breakeven considering the ABSD payable) and potential upside in property value for investment 

Sell off the HDB in view of the decaying lease and use the 2nd property as our retirement home 

My main considerations of the 2nd property would be proximity to train stations and a healthy rental yield. We are looking at 2 bedroom properties so that we do not over leverage. Personally, a resale condo is more practical as it can be rented out immediately. Having said that, is there any merits for me to consider a new launch rather than a resale condo? 

Apologies for the long email and truly appreciate your time in reading.

[Windwaver]

Conclusion

To conclude, paying off your HDB in order to take the full loan for the second property and paying the ABSD will set your cash savings back quite significantly. It will also take quite a long time to breakeven and start profiting from the investment property due to the hefty ABSD. 

Holding on to the HDB for a long term may not be the best course of action given the lease decay and reduced buyer pool in the future. Although you could rent out the HDB in the later years and move into your investment property, this is a rigid option as in the event you wish to cash out on the investment property (or if it’s not doing well) and buy another one with better potential, you will have to pay for the ABSD again which may deter you from doing so. 

Ultimately, it seems to be too many hoops to jump through, or that you will have to get right, to really profit from this. Of course the best case scenario is that you find a really good property. But you will also have to consider scenarios in the event of losing your jobs, the property doesn’t appreciate as hoped, the rental yield gets worse due to unforeseen circumstances, or it goes through a collective sale (if you bought a resale) in a few years which may barely cover your ABSD still. 

If you are really bent on owning 2 properties, selling the HDB to purchase two properties will take ABSD out of the equation and also give you more flexibility in the sense that you can always choose to sell the investment property when its profitable without incurring any more ABSD. 

Given that you are in your late 30s, it is still a relatively young age which you can leverage on before you retire. As always, it is important to be prudent and not over-leverage so do get your finances checked before committing.

[Wt_know]

with current liang teh

the only viable way is decoupling by either divorce or sell 1 buy 2

those paying ABSD like Dyson boss and richie PRC who buy 1 floor or 1 building are in different league la

simi ABSD simi stamp duty are nothing !

Edited September 9, 2022 by Wt_know

[Karoon]

No more MIL... what a clever plan  

[Bleuzone]

Divorcing and buying a second HDB to rent out may seem like a good idea, but the couple needs to keep in mind that HDB rental is dependent on HDB approval. In the event HDB disapproves renting out of the property, they will be stuck with servicing the loan on the second property with no rental income. That’s the primary challenge with public housing. Rules and regulations are tightly governed so loopholes can be plugged easily, only depending on whether the authorities want to act on it.