According to HDB, Minimum Occupation Period (MOP) is the required time frame we need to stay in a flat before resale. Typically, it lasts for about five years, and it is calculated from the day we collect our keys from HDB.
First introduced in 1971, Minimum Occupancy Period (MOP) was a measure set in place to “minimise the use of HDB as an investment vehicle”. In 1973, MOP was subsequently increased from three to five years for subsidised HDB flats. This was later extended to non-subsidised HDB flats (e.g. resale flats) 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 six lesser-known MOP facts Singaporeans can take note of before purchasing their HDB flat or Executive Condominium (EC).
#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 flat, we can choose to get HDB 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 for two years, and are approved 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 To The Distance Limit During The MOP If Applying For The Proximity Housing Grant (PHG) Or Married Priority Scheme (MCPS)
Introduced in 2015, Proximity Housing Grant encourages both parents and children to live closer/with each other. If families are living together or within a 4-km radius, they can enjoy up to $30,000 off their resale flat purchase.
In the case that we have purchased a resale flat near our parent’s current flat, our parents would have to continue staying at the same vicinity (with 4 km of our flat) for the duration of our MOP. This is to ensure that families are living close by and 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 parents’ 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. This starts after the collection of keys to our new flat (i.e. 5 years after the 4-5 years wait for BTO completion).
Before applying for PHG or MCPS, it would be ideal to check with your families if they are planning to move within the next five years (or more for MCPS).
#3 Unlike Other HDB Flats or EC, 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 3Gen flats has two master bedroom suites while 5-room flats have only one.
While normal HDB flats are able to rent out a room during MOP, 3Gen flats are unable to do so. This means during the five years of MOP, 3Gen homeowners are not given the rental leeway to rent out a room of their flat.
#4 SERS Residents Rehoused Flats Has A 7 Years MOP Instead
Selective En Bloc Redevelopment Scheme (SERS) was introduced in 1995 to help redevelop older housing estates. HDBs estates that are selected for the scheme will have the homeowners compensated at market rate and be given an opportunity to purchase a fresh 99-year lease flat at the designated replacement site.
The SERS grant can go up to $30,000 for the purchase of the replacement flat. Additionally, homeowners get other benefits such as moving expenses, waiver of admin fees and more.
With the slew of benefits and subsidies, the MOP of the new replacement flat is extended from five years to seven years instead.
#5 1-Room Resale Flat Purchased Without CPF Housing Grant Do Not Have MOP
For buyers that have purchased a 1-room flat from the resale market without using CPF housing grant, they would not need to abide by any MOP rules.
Regardless, it does not mean that the homeowner can start renting out the room to another tenant immediately after purchase. Currently, 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.
#6 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 years 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.
Listen to our podcast, where we have in-depth discussions on finance topics that matter to you.