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Thread: A few CCR transactions sold at a loss (reported in The Edge)

  1. #4276
    Join Date
    May 2012
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    3,221

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    Quote Originally Posted by hopeful View Post
    can elaborate more please?
    i (and perhap very many others) are interested in the "no tax for both parties" part
    To be precise, it's no ABSD.

    Roughly, it is this. The parents had a property bought many years ago worth several times in today's prices but still asked their only son (married with kids) to buy HDB and stay through MOP. Sell upon MOP and buy over the old property from the parents at a huge (steep) discount, minimising BSD as well. The loan arranged is so that the son can loan max in one person's name, reserving his wife's name and income to buy another property.

    The parents are freed from ownership and now can also buy and pay in cash and CPF if they wish to. Or use the funds for retirement. Not sure which they opted for though.

    Do check with lawyers if you want to do any stunt. Caveat emptor.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  2. #4277
    Join Date
    May 2012
    Posts
    3,221

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    Quote Originally Posted by hopeful View Post
    Is the more balanced picture going to be looked at in isolation or is it going to be compared with other pictures?
    for example

    Picture 1: buy in 1997, derive utility for 20 years
    Picture 2: rent for 5 years, buy in 2002, derive utility for 15 years.

    Picture 3: buy in 2007, derive utility for 10 years
    Picture 4: rent for 3 years, buy in 2010, derive utility for 7 years.

    or is Picture 1 looks better only when only compare to Picture 5: rent for 20 year, do not derive utility for 20 years.

    perhaps can look at other pictures as well.
    Hehe, if you are looking at 2007 property and saying incurred loss, look at the utility value plus rent value (minus interests and expenses paid) over the 10 years.

    If you are looking at 1997 property and saying it is under water, do the same calculations over 20 years.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  3. #4278

    Default

    Quote Originally Posted by Kelonguni View Post
    To be precise, it's no ABSD.

    Roughly, it is this. The parents had a property bought many years ago worth several times in today's prices but still asked their only son (married with kids) to buy HDB and stay through MOP. Sell upon MOP and buy over the old property from the parents at a huge (steep) discount, minimising BSD as well. The loan arranged is so that the son can loan max in one person's name, reserving his wife's name and income to buy another property.

    The parents are freed from ownership and now can also buy and pay in cash and CPF if they wish to. Or use the funds for retirement. Not sure which they opted for though.

    Do check with lawyers if you want to do any stunt. Caveat emptor.
    disappointed upon knowing further details about the "no tax" stuff

    anyway, it is interesting to find out their thought process.
    1) banks unlikely to lend to parents if they want to buy another property (age factor?).
    2) to raise funds, if parents' don't sell, parents have to take out home equity loan, (age factor?).

    picture A
    parents gifted to the son.
    to raise funds, son have to home equity loan which cannot be used to be buy another property.

    picture B
    parents sell to the son.
    son take mortgage to pay to his parents. parents now have funds, which can be used to buy another property.
    so based on the maximum loan the son can take on his single income, they calculate the sales price.

  4. #4279

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    Quote Originally Posted by Kelonguni View Post
    Hehe, if you are looking at 2007 property and saying incurred loss, look at the utility value plus rent value (minus interests and expenses paid) over the 10 years.

    If you are looking at 1997 property and saying it is under water, do the same calculations over 20 years.
    ok, so looking at the more balanced picture in isolation.

  5. #4280

    Default

    Quote Originally Posted by Kelonguni View Post
    Hehe, if you are looking at 2007 property and saying incurred loss, look at the utility value plus rent value (minus interests and expenses paid) over the 10 years.

    If you are looking at 1997 property and saying it is under water, do the same calculations over 20 years.
    Current market, vacant units are almost available at every condo. Practically landlord needs to factor in some months without rental income and the maintenance and sinking fees.

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