Connect with us


6 Lesser-Known Facts About Minimum Occupation Period (MOP) For Singaporeans

The longest MOP is 20 years.

According to HDB, the Minimum Occupation Period (MOP) is the required time frame we need to stay in a flat before resale. Today, the MOP is five years old, and it is calculated from the day we collect our keys from HDB. This means we can only sell our HDB flats after “occupying” it for a minimum of 5 years.

First introduced in 1971, the MOP is a measure to minimise the use of HDB as an investment vehicle. In 1973, MOP was subsequently increased from 3 years to 5 years for subsidised HDB flats (i.e. BTO flats). This was later extended to non-subsidised HDB flats (e.g. HDB flats bought on the resale market) in 2010. While it has remained constant since then for most HDB flats, there have been exceptions to accommodate the changes in Singapore’s public housing policy.

Apart from full flat rental restrictions and being unable to purchase a private property, there are other exceptions to MOP that most Singaporeans might not know about. Here are 6 lesser-known MOP facts Singaporeans can take note of before purchasing their HDB flat or Executive Condominium (EC).

Read Also: 10 Types Of Property Cooling Measures That Singapore Government May Introduce (Based On Past Track Record)

#1 MOP Gets Extended If You Rent Out The Whole Flat For Special Reasons (Or If You Go Overseas)

In the event we are unable to live in our HDB flat, we can choose to get HDB’s approval to rent out our entire flat. However, the period of our MOP will be extended by the duration that we are away and renting out our home. For example, if we relocate overseas during MOP for further studies or work, and get approval to rent out our entire flat, our MOP will be extended by another two years too.

Regardless, as long as the period of vacancy is reasonable, we can leave the flat unoccupied without having to count the duration into our MOP. This means we can still go for a good holiday without worrying about counting the vacation period in our MOP.

#2 Parents And Children Have To Abide By The Distance Limit During The MOP If Applying For The Proximity Housing Grant (PHG) Or Married Child Priority Scheme (MCPS)

Introduced in 2015, the Proximity Housing Grant (PHG) encourages both parents and children to live closer to or with each other. If families are living together or within a 4 km radius, they can enjoy $30,000 or $20,000 off their resale flat purchase, respectively.

In the case that we have purchased a resale flat near our parent’s current flat, our parents would have to continue staying in the same vicinity (within 4 km of our flat) for the duration of our MOP. This means they can sell their property, but must move into another flat within a 4 km radius of our HDB flat. This is to ensure that families continue to live close by, thus fulfilling the grant’s intention.

Likewise, the Married Child Priority Scheme (MCPS) allows first-timer couples to receive additional priority for BTO flat allocations if they move within 4 km of their parent’s residence. If we applied for our BTO flat using the MCPS, our parents who helped us qualify for the scheme must continue to live within 4 km of our new flat for the duration of our MOP.

Before applying for PHG or MCPS, it would be ideal to check with your families if they are planning to move within the next 5 years, or even up to 9 or 10 years. Apart from the 5-year MOP period, we may also have to potentially have another 4-5 years wait for our BTO completion.

Read Also: Guide To Understanding The HDB Proximity Housing Grant (PHG)

#3 Unlike Other HDB Flats or ECs, 3Gen Flat Cannot Rent Out A Room During MOP

A new flat type introduced in 2013, 3Gen flats are the second-largest flat type after Executive Flat. Aside from being slightly larger than 5-room HDB flats, the main difference is that 3Gen flats have two master bedroom suites while 5-room flats have only one.

While you are typically able to rent out a room in your HDB flat during MOP, those living in 3Gen flats are unable to do so.

Read Also: Complete Guide To Buying A 3Gen HDB Flat In Singapore

#4 There Is A 10-Year MOP For Prime Location Public Housing (PLH) Flats & HDB Plus Flats

Prime Location Public Housing, or PLH, was introduced in October 2021 to build HDB flats in central locations, such as the Greater Southern Waterfront and city centre. This will ensure that Singaporeans are not locked out of living in highly desirable locations. The first PLH project was in Rochor.

Part of the condition of being able to buy a PLH flat is that homeowners have to serve out a 10-year MOP instead of the usual 5-year wait. This is in addition to other conditions such as having to repay a Subsidy Recovery when we sell a PLH flat, to account for the additional subsidies provided to make such homes affordable in the first place. This Subsidy Recovery can differ based on the PLH housing project.

The 10-year MOP can be a significant wait, especially for younger families, as they also have to wait for the duration to build the flat – which can add another 3 to 4 years. The 10-year MOP is also not only for first-time BTO buyers but all subsequent resale buyers of PLH projects.

Unlike other HDB homeowners, owners of PLH homes cannot rent out their entire flat even after the 10-year MOP. This means PLH homeowners can only ever rent out spare bedrooms.

Introduced in 2023, HDB Plus flats are a new category of flats and will be in choicer locations within each region across Singapore. This means we can expect to see such flats being launched in heartland estates such as Ang Mo Kio, Bishan, Clementi, Toa Payoh, Bedok, Queenstown, Bukit Merah and Kallang-Whampoa. The location of these flats would generally be superior (e.g. near MRT station, town centre) as compared to Standard flats within the same estate.

Similar to PLH flats, Prime flats will also have a 10-year MOP. This applies not only to the first buyer, but all subsequent resale buyers of Prime flats.

Read Also: Prime Location Public Housing (PLH) Model: 8 Things To Know About The Regulations For New HDB Flats Built In Prime Location

#5 Flats Bought Under The Fresh Start Housing Scheme Has The Longest MOP – 20 Years

The Fresh Start Housing Scheme was first introduced in 2016 to assist second-timer households with young children living in public rental flats. The scheme provides these second-time homeowners with integrated financial support with personal responsibility and grants to help them purchase an HDB flat.

Based on the generous allocation of benefits and grants, HDB has thus introduced the longest MOP of 20 years to help ensure the scheme benefits, true homeowners. The 20-year MOP is considerable as a 2-room Flexi flat already has a shorter lease of 45 to 65 years in comparison to the usual 99-year lease.

Read Also: HDB Fresh Start Housing Scheme: Does It Make Financial Sense For People Staying In Public Rental Flats To Buy Their Own 2-Room Flat?

#6 SERS Residents And 1-Room HDB Buyers Now Also Have To Serve 5-Year MOP

On top of a slew of benefits and subsidies for SERS flats, residents used to be able to sell their new HDB flats 7 years from the selection of their flats (i.e. earlier than other residents in the estate who have to wait out a 5-year MOP period). For SERS sites announced after 7 April 2022, this benefit was removed to ensure all new HDB flat owners serve out the same 5-year MOP.

Read Also: What Happens When Your HDB Flat Is Selected For SERS?

For buyers who purchased a 1-room flat from the resale market without using CPF housing grant, they previously did not need to abide by any MOP rules. However, this piece of information seems to have been removed from the HDB website – which means such buyers now need to also serve the 5-year MOP.

Currently, even after the MOP, partial rental is not allowed for 1 and 2-room flats. The homeowners can only rent out the whole flat and up to a maximum tenant of four pax. Additionally, the stock of 1-room resale flats is tiny as HDB stopped construction of such units for a long time.

This article was first published in July 2021 and have been updated with the latest information

Listen to our podcast, where we have in-depth discussions on finance topics that matter to you.