What is an Executive Condo?
Executive condos (ECs) are a hybrid of public and private housing and have grown popular in recent years. The scheme was introduced in 1996 when private home prices were at their peak, to cater to the needs of the “sandwiched class”. This group of buyers find prices private properties out of reach, and also do not qualify for the BTO flats, as their incomes have exceeded the previous $8,000 income ceiling (now $12,000).
Like any other condominiums, ECs are designed and built by private developers – but come with restrictions. EC buyers have to form a family nucleus comprising at least 2 Singapore Citizens (SC), or 1 SC and 1 Permanent Resident (PR). A Minimum Occupation Period (MOP) of 5 years is applicable before it can be sold in the open market. ECs can only be sold to foreigners after 10 years.
Why are Executive Condos Popular?
Let us take a quick look at the various benefits of an EC:
- Additional Buyer’s Stamp Duty (ABSD) is NOT APPLICABLE.
- Seller’s Stamp Duty (SSD) is NOT APPLICABLE for EC as owners have to fulfill 5 years’ minimum occupation period (MOP).
- Deferred payment is available, 20% down payment, 65% upon TOP and final 15% upon legal completion.
- There is no restriction to invest in commercial/industrial property later on, as long as there is no residential component in the commercial unit.
- Improved design and features. EC developers are now offering more to attract buyers wishing to upgrade to a “subsidized” private residential lifestyle living.
- Great lifestyle – enjoy the same lifestyle and facilities as other condominiums.
- Possible grant (CPF Housing Grant of $20,000-$30,000 for first timers).
- Budget-friendly entry price – lower quantum compared to mass market condominiums.
- Comparable or better potential future capital appreciation to condominiums (more likely to be sold at a good profit after MOP).
- Can be sold under private property status after MOP of 5 years to Singapore Citizens and PRs, and to foreigners after 10 years – hence a larger pool of potential buyers.
- Good potential for rental yields as design and facilities are similar to any private condominiums.