Based on data from the Singapore Department of Statistics (SingStat), there were 6,959 marriages that ended in a divorce or annulment in 2020.
In today’s article, we will look at a few things you should know on housing matters after divorce.
A divorce is when a husband and wife decide they do not want to be married to each other.
A divorce will also include unpleasant things like custody of children and dividing matrimonial assets.
One of the biggest matrimonial assets is, of course, the property*, be it an HDB flat or private property. *However, if the Court does not consider the property to be a matrimonial asset, the property will not be divided and both parties can retain their respective shares in the property.
If the property is determined by the Court as a matrimonial asset, both parties need to submit their respective positions through their divorce lawyers during an ancillary hearing.
This is where both parties will decide whether to retain or give up the property.
For HDB flats, upon divorce, the Court may grant an order for either party to take over the matrimonial flat.
The party taking over the flat must meet the eligibility conditions for ownership of the flat.
The divorce parties would need to decide on the mode of effecting the ownership change - whether it is through a change in flat ownership (not through a sale) or through a resale of part-share.
Parties may submit an application for the intended change in flat ownership only after the divorce is finalised.
Only when the Certificate of Final Judgement for a civil divorce, or a Certificate of Divorce for a Muslim divorce is issued, then HDB will accept applications for an ownership change.
Six things to take note of for ownership of the flat changes after divorce are:
1. HDB does not grant any loan for the amount of consideration/sum payment if the Court has ordered for such sum to be paid to one of the parties as one of the terms of the divorce.
This includes the CPF refund to be borne by the withdrawing owner upon the ownership change.
2. HDB does not accept requests for valuation by owners who need a valuation report for purposes other than mortgage financing (e.g. to determine the settlement of the matrimonial property/consideration sum payable).
3. If the withdrawing owner has bought or intends to buy a flat with a second mortgage loan from HDB, he/she must use his/her CPF refund and consideration sum received (if any, up to 50% of the consideration) to reduce the second mortgage loan quantum.
4. If the terms of divorce state that the withdrawing owner will receive a partial or zero CPF refund upon withdrawing ownership from the matrimonial flat, the CPF Board’s confirmation letter indicating their consent to such Court Order must be submitted to HDB at the point of application.
5. If the matrimonial flat is a subsidised flat, the current owners (and ex-spouse) will be considered to have enjoyed 1 housing subsidy. The current owners will need to pay their respective share of the resale levy when they buy another subsidised flat/ EC unit (if eligible).
6. Banks or financial institutions licensed by the Monetary Authority of Singapore (MAS) generally only grant a mortgage loan if the change in flat ownership is done through a fractional purchase (i.e. resale of part-share).
Proposed owners who are considering a mortgage loan from a bank or financial institution are advised to check the terms of financing before deciding on whether the ownership change should be done through a change in flat ownership (not through a sale) or through a resale of part-share.
On top of these, you need to know...
If the property is a BTO flat that is within the Minimum Occupation Period (MOP), you can retain the flat if you have custody of your child and if the prevailing eligibility conditions are met.
If you do not have any children from the marriage, you can take over the flat under the Single Singapore Citizen (SSC) Scheme, if you are a Singapore Citizen and 35 years old and above. You must also meet prevailing eligibility conditions under the SSC scheme.
Alternatively, you can include another person to retain the flat under an eligibility scheme, subject to you meeting the prevailing conditions.
If both parties are unable to retain the flat, it will be returned to the HDB at the prevailing compensation price.
The proceeds from the sale will be divided between both parties based on the Court order, after settling any outstanding mortgage loan, reimbursement to the CPF accounts for the withdrawal of monies (including accrued interests) when purchasing the flat.
What are your options after divorce?
For single parents after a divorce, HDB has the following schemes to help with housing matters:
Policies for Smoother Housing Transition: Both parties in a divorce can apply to buy a subsidised flat, upon obtaining the Interim Judgement of divorce and resolving ancillary matters on their matrimonial property and custody of their children. Each party must meet the eligibility criteria, like all flat applicants.
Priority Schemes: Under the Assistance Scheme for Second-Timers (ASSIST), a portion of 2- and 3-room Build-to-Order (BTO) flats is set aside in non-mature estates for divorced/ widowed parents with children aged 18 and below.
Access to Housing Subsidies: Divorced and widowed persons buying a new flat from HDB with their children can qualify for housing subsidies, if they are first-timers. If they wish to buy a resale flat, they can also qualify for a Proximity Housing Grant (PHG) of up to $30,000, as long as they have not previously taken the PHG.
Accommodation in the Interim: If they need housing while waiting for their BTO flats to be completed, they can rent a flat temporarily under the Parenthood Provisional Housing Scheme (PPHS).
Public Rental Housing: For needy low-income parents who have no other housing options and family support, HDB can assist them with public rental flats.
HDB launched the ASSIST scheme in May 2013 and has since, set aside more than 740 flats to help divorcees and widows with children looking to purchase a flat.
For more property news, resources and useful content like this article, check out Mogul.sg blog here.
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