For Singapore Citizen, the current ABSD of 7% is payable for the 2nd property.
If you intend to sell your 1st property, you can do it in two ways depending on your timing and financial situations.
The first method is to time the selling and buying, put your HDB in the market for sale and at the same time look for your 2nd private property be it a condo or landed property.
Issue Option To Purchase (OTP) for 1st property and request longer completion period say 16-20 weeks.
While waiting for the OTP to be exercise, finalise your targeted private properties.
Once OTP is exercised and HDB approval granted with 1st appointment, you can make an offer for your private property and request shorter completion period, say 8 weeks.
Pros: Avoid ABSD payment, Loan To Value Restriction. This way, you avoid paying the ABSD as you have contractually sold your 1st property before buying the 2nd property. In this way, you can avoid renting a place prior getting a new place
Cons: Timing is crucial. Complication may arise during HDB appointments and prior sales completion of both HDB and private properties.
Suits: If you have an existing mortgage on the 1st property, your 2nd mortgage loan is 30-50% depending on the loan tenure and your age. So this method suit those with existing mortgage and do not want to pay ABSD upfront.
The second method: A safer way would require you to pay ABSD in advance and then claim from IRAS later. This method is suitable if you do not have an existing mortgage loan. You can also stay in your current HDB until you have found your ideal private property.
For married couples, you can buy your 2nd property, pay the ABSD of 7% and can claim refund for 7% ABSD if:
You have paid ABSD for the 2nd residential property.
The 1st property is sold within 6 months from the date of purchase of the 2nd property (if it is a completed property) or TOP/CSC (whichever is earlier) of the second property (if it is an uncompleted property).
The married couple must not purchase a 3rd or subsequent property from the date of purchase of 2nd property to the date of sale of 1st property
Please note that ABSD of 7% claimable is only valid for married couples. Singles are not eligible for refund of ABSD.
Pros: Can take a longer time to buy and then sell, subject to IRAS ABSD condition
Cons: ABSD payable upfront and claim from IRAS later.
Suits: Those without existing mortgage and do not mind to pay ABSD upfront and claim from IRAS later. Only valid for married couple.
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