“Given the current economic environment, where employees are facing challenges in the job market, the need for greater financial stability in making property purchasing decisions is highly important,” said URA.
“Only when they are able to exercise the OTP during the validity period can buyers agree to a property transaction.”
While it agrees that the current validity period of the regular OTP is appropriate for most customers to exercise the option, the Controller also admits that before exercising the OTP, certain customers may need more time to finalize the required arrangements.
For eg, certain purchasers may need more time to finish the selling of their current property.
With this, the Controller specified that homebuyers or developers will apply to exercise the OTP for an extension of the time.
“The Controller is prepared to extend the time of validity of the OTP up to 12 weeks from the date of the OTP, so that all parties (i.e. the buyer and the developer) consent,” the circular says. Purchasers wishing to expand the validity span of the OTP would need to write to ura coh firstname.lastname@example.org with the following information:
- The OTP’s copy;
- The OTP’s expiry date; and
- Reasons for more time being taken to exercise the OTP
“Under the provisions of the OTP, the selling of a HDB flat would take more than three weeks. So HDB upgraders will want to sell their new HDB flat so that the Extra Buyer’s Stamp Duty (ABSD) would not have to be stumped up in advance. Effectively, if they wish to purchase a private residential house, HDB upgraders must come up with approximately 40 percent cash and CPF within three weeks, he said.
Given that HDB upgraders normally rent another HDB flat when waiting for their new unit to be finished, the new circular can also have an impact on the HDB rental and resale industry.
And while no one is lawfully entitled to own both a HDB and an executive condominium (EC) unit concurrently, there is no provision for an EC unit to pay for ABSD.