Couples buying HDB BTO flats should register ownership in the names of both partners

Couples enjoy huge privileges when buying BTO flats

Leslie Yee
The Business Times

Feb 13, 2025

https://www.businesstimes.com.sg/opi...-both-partners

Land is scarce in Singapore. There is also scarcity value to using a Singapore citizen’s name when purchasing homes here.

A local buying a first home does not pay any Additional Buyer’s Stamp Duty (ABSD), whereas those buying second homes and third and subsequent units pay ABSD of 20 and 30 per cent, respectively. ABSD is paid in addition to Buyer’s Stamp Duty.

Back in the late 1990s when there was no ABSD, my wife and I bought our first home for owner occupation using both our names when we tied the knot. Jointly owning the matrimonial home was a key step in our transformation from singles to sharing life as a couple.

Today, unsurprisingly, given the tough ABSD regime, numerous newly-weds buy their first home for owner occupation using the sole name of one partner. By doing so, a couple has one spare name to buy an additional home later on without incurring ABSD. In short, a local couple can cost-effectively own two homes under separate names – one for occupation and another to earn rental income.

Sure, local couples cannot be faulted for cleverly structuring their ownership of homes. After all, the difference between paying 20 per cent ABSD and no ABSD on a home costing S$1.5 million amounts to a whopping S$300,000.

However, perhaps couples who buy flats at subsidised prices from the Housing and Development Board (HDB) should be prohibited from registering the ownership of such units under the sole name of one partner.

My colleague Ry-Anne Lim reported that according to statistics from the HDB, about 3 per cent of HDB Build-to-Order (BTO) flat buyers had one spouse listed as an owner and the other spouse as an essential occupier between 2014 and 2023.

The BTO bonanza

Singapore is a nation of homeowners. The high homeownership rate helps anchor locals to home and allows them to participate in asset appreciation.

For many young locals, a major incentive to get married is the chance to secure an HDB BTO flat. Subject to meeting various conditions, a couple comprising a Singapore citizen and another citizen or a permanent resident can buy up to a five-room BTO flat.

BTO flats are sold at subsidised prices. The HDB posted a net deficit of S$6.8 billion for the financial year 2023. Some S$6.2 billion of the net deficit was spent on HDB’s Home Ownership segment. This covers developing and selling flats to eligible buyers under public housing home ownership schemes as well as disbursing housing grants to eligible households.

BTO home buyers are virtually guaranteed substantial financial gains. In February’s BTO exercise, a four-room flat at Woodlands North Verge, which is classified as a Standard project, is being sold at S$365,000-S$528,000 – far less than transacted prices of comparable resale flats nearby of S$615,888-S$728,888. The BTO homes come with fresh 99-year leases while the comparable resale flats in this case have remaining land leases of about 94 years.

Put simply, a buyer of a four-room BTO unit might enjoy a mark-to-market gain of over 50 per cent.

HDB homes are for living

Despite many pressing needs on the government’s purse, spending on building HDB BTO homes for couples is a worthwhile expenditure as this encourages marriage and parenthood.

Nonetheless, it’s fair to require couples who qualify to buy certain BTO flat types by virtue of being a couple to make such purchases using the name of both partners.

Certainly, a local couple who owns an HDB BTO home using both partners’ names will find it costlier to buy a private home when they do so later on. Still, it appears reasonable that a couple who has the financial means and profited from buying an HDB flat at a subsidised price coughs up more in property transaction related taxes. The higher tax collected can help fund useful public spending.

Local first-timer couples enjoy significant priority in the HDB market over other groups of buyers. Helping a young couple buy a four-room flat of about 1,000 square feet (sq ft) or a five-room unit of around 1,200 sq ft at a reasonable price provides the said couple with a spacious home to raise a family. Hopefully, home ownership incentives coupled with other family friendly policies will boost the birth rate among locals.

The aim of helping couples own a home that is good to raise a family is not undermined by requiring couples to register HDB BTO using both partners’ names. Couples who buy BTO homes using two names will enjoy a good home to live in plus help in wealth creation.

Of course, creating wealth through homeownership can be easier when a couple buys a BTO flat under one partner’s name with the other partner listed as an essential occupier. Still, HDB homes should be more for owner occupation than investment.

Local couples who buy HDB BTO homes already receive much help in creating wealth via homeownership. Collecting more in taxes from such couples if and when they choose to own an additional investment home is the right thing to do.

Importantly, chipping away at the love of Singaporeans for investing in physical homes can yield benefits. Channelling monies into supporting local companies or starting businesses might better aid Singapore’s economy.