Connect with us


Guide To HDB’s Temporary Extension Of Stay When Buying Or Selling An HDB Resale Flat

Buyers who allow for the Temporary Extension Of Stay are responsible for housing-related cots such as monthly instalment and S&CC.

Beyond just being a big financial decision, buying or selling an HDB resale flat can also be a stressful process. As a buyer, you have to choose the right flat, negotiate the best price, know the HDB housing grants that you qualify for, select the renovation contractor and prepare to move in.

As a seller, besides just getting a good price for our HDB flats, we also have to deal with the process of moving out of our home. This can be challenging if we ourselves are moving from one home to another, and especially draining if we have young children and/or elderly parents who are also moving with us.

To make this moving period less hectic for both buyers and sellers, HDB allows homeowners to request a Temporary Extension of Stay. This is a private arrangement between flat sellers and buyers that allows sellers who have bought another property more time to move out of their flat after resale completion.

HDB’s Temporary Extension Of Stay: How It Works?

Upon exercising the Option To Purchase (OTP), both buyers and sellers have to submit their respective portfolios of the resale application. It’s also during this period when both parties need to state in the resale application if there will be a temporary extension of stay (more on this below) that will be included.

Typically, the resale completion is about 8 weeks from the date of HDB’s acceptance of the resale application. This means you have about two months before the flat is officially handed over to the new owner, and you need to move out by the completion date.

However, for sellers who have committed to buy a completed property in Singapore, and need more time to move out, you can arrange with the buyers for a temporary extension of stay in the flat for up to 3 months after the resale completion. The extension of stay will be terminated automatically at the end of 3 months. There will be no further extension beyond the 3 months.

The caveat here is that as a seller of the HDB resale flat, you must have also already committed to buying a completed property (e.g. another HDB flat or private residential property). This means having exercised the OTP for your new place, or already signing the Sale and Purchase Agreement. Also, the seller cannot be renting out the entire flat at the point of sale.

For the seller, it’s important to note that the buyer must agree to allow for the temporary extension of stay. If this is vital to you, it’s best to discuss this during the sales process. Of course, this may also put off some buyers who may be in a rush to move in or may even result in a lower purchase price if the buyer were to use it as part of the negotiation.

If you don’t mention it and the buyer is not agreeable to the extension of the stay, then it will not be granted.

Housing-Related Costs Such As Monthly Instalment & S&CC Commence At Resale Completion Date

For buyers, it’s important to know that while granting the temporary extension of stay means they will only be able to move in up to three months after their resale completion date, they are already the official homeowner even during the temporary extension of stay period.

This means they will have to start paying all housing-relating costs such as the monthly instalment for the home, Service & Conservancy Charges (S&CC) and property tax. The buyer, being the future owner of the flat who agrees to the extension of the stay, would also need to pay an administrative fee of $20.

For buyers, it might be helpful to consider a separate agreement with the sellers that allows for some of these costs to be reimbursed to them. Again, this is a private arrangement and you can ask your housing agents for advice on this if required.

Do note that because you are already the homeowner, but not yet occupying the flat, you will not be entitled to any S&CC rebates given out during this period. Also, you will need to pay property tax at the higher non-owner-occupied residential tax rate for the 3 months as you are not staying in the flat and will not enjoy the concessionary owner-occupier tax rates during the extension period.

Finally, your minimum occupation period (MOP) will only commence after the temporary extension of stay period, and not at the resale completion date. If the temporary extension of stay is terminated earlier, buyers must inform the HDB Branch managing the flat.

Read Also: Step-By-Step Guide To Selling Your HDB Flat Using The HDB Resale Portal

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