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HDB Home Ownership: Are You A Home Owner Or Simply A Long-Term Renter?

The word “tenant” can be used to describe someone who is an occupant of a place, and not necessarily someone who is renting.

 

In the past few weeks, a debate arising about whether HDB residents are owners of their flat or simply long-term renters have surfaced. This have sparked renewed interest among some Singaporeans in the matter, as we debate over just how much rights we have over the 99-year leasehold HDB flats that we bought from the government.

Read Also: 3 Coffeeshop Myths About HDB Flats You Are Better Off Ignoring

Understanding What Home Ownership Entails

Before you construct your view about whether HDB residents are truly owners of their homes or merely long-term renters, it’s important to first understand what home ownership means.

  • Being able to stay in your home, without having to pay a rent for it
  • Being able to rent out your home if you choose so
  • Being able to pass it down as an asset
  • Most importantly, being able to profit from it

The last point is critical. As a homeowner, it’s within your rights to be able to earn a profit from your home should you choose to sell it off, or more accurately, if you choose the assign ownership to someone else.

This is in stark contrast to renters, who are not able to profit financially from the increase in value of the home that they are occupying.

The other pointers above do matter as well, as they are part and parcel of home ownership. That said, some of the pointers are not always mutually exclusive to homeowners.

For example, it is possible for a renter to also sub-lease it to others, subjected to their landlord’s approval.

Understanding What Being A Renter Means

On the flip side, here’s what being a renter means.

  • No guarantee of being able to rent the home from the landlord, who at their own discretion, can choose not to rent out the home to the renter, or to rent it to someone else
  • No guarantee of rental price. The landlord can choose to increase the rent as and when he/she wants to
  • Most importantly, renter cannot profit financially from the home

Again, the last point is the most critical. Renters are not able to enjoy any capital appreciation from the home, regardless of how long they have lived in it. That’s because they do not have the rights to assign home ownership to someone else.

This ability to assign home ownership to someone else based on a willing buyer, willing seller transaction is an important differentiating factor between a homeowner and a person who is merely renting.

Owners of HDB flats are able to do so. They can assign their HDB flats to their children, or sell it at a profit in the open market. They are able to do so because they are homeowners, and not simply long-term renters.

Tenant Equals Renter?

One area of confusion for some Singaporeans is associating the term “tenant” to someone who is renting a property.

According to most dictionary.com, the term “tenant” can apply to a person who rents a place from another for a period of time. It can also apply to an occupant or inhabitant of any place.

So it’s untrue that the term “tenant” automatically applies to someone who is renting.

Read Also: [Ask DollarsAndSense] What Happens To The HDB Flat If The Person I Bought It With Passes On

 

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