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 5 years, and it is calculated from the day we collect our keys from HDB. This means we can only sell our HDB flats after “occupying” them for a minimum of 5 years.
First introduced in 1971, the MOP began as a 3-year Minimum Occupation Period to “minimise the use of HDB as an investment vehicle”. In 1973, MOP was lengthened to 5 years for subsidised HDB flats (i.e. BTO flats), and was later extended to non-subsidised HDB flats (i.e. resale 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).
#1 There Is A 10-Year MOP For HDB’s Prime Flats & Plus Flats
First introduced under the Prime Location Public Housing or PLH scheme in October 2021, HDB said they would offer BTO 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.
This was repackaged into a new HDB classification model, labelling new BTO flats as Prime Flats, Plus Flats and Standard Flats. While Prime Flats will remain in central locations, we can expect Plus Flats to be in “choicy” locations (e.g. near MRT station, town centre) within certain heartland estates. At the same time, HDB phased out the old Mature and Non-Mature Estate classification.
Part of the condition to buy a Prime or Plus 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 the 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 exact housing projects.
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 for all subsequent resale buyers of Prime and Plus Flats.
Unlike other HDB homeowners, owners of Prime and Plus homes cannot rent out their entire flat even after the 10-year MOP. This means Prime & Plus homeowners can only ever rent out spare bedrooms.
#2 You Can Extend Your MOP If You Rent Out The Whole Flat Or If You Go Overseas
In the event we are unable to live in our HDB flat, we can seek 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 for 2 years, our MOP will be extended by 2 years too. Similarly, if we want to move in with our parents who are ill, we can seek HDB’s approval to rent out the flat too, and extend our MOP.
These examples are just scenarios that we think are not entirely in our power to control, and something HDB might be empathetic towards – but may not be valid reasons to HDB based on our exact situation. Anyone who wants to rent out their entire flat before the MOP is up still needs to get approval from HDB.
#3 Parents And Children Have To Abide By Distance Limits 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. While they can still sell their property, they 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.
Similarly, if we applied for our parents to live with us, and received the PHG, our parents have to continue living in our flat for the entire 5-year MOP.
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 8 or 9 years. Apart from the 5-year MOP period, we may also have to potentially have another 3-4 years wait for our BTO completion.
Read Also: Guide To Understanding The HDB Proximity Housing Grant (PHG)
#4 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
#5 Flats Bought Under The Fresh Start Housing Scheme Have The Longest MOP – 20 Years
The Fresh Start Housing Scheme was first introduced in 2016 to assist Comlink+ families with young children living in public rental flats. The scheme provides both first- and 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 and 3-room Standard flat come with a shorter lease of 45 to 65 years in comparison to the usual 99-year lease.
#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 of four tenants. Additionally, the stock of 1-room resale flats is tiny as HDB stopped construction of such units for a long time.
