MND sunsets deferred payment scheme for Executive Condominiums, increases MOP and first-time buyer quotas
The Ministry of National Development (MND) has announced a series of new measures for Executive Condominiums (ECs).
These include extending the Minimum Occupation Period (MOP) from five years to 10 years and scrapping the Deferred Payment Scheme (DPS).
MND announced the changes on May 8 to support first-time home buyers further.
Singapore’s government aims to ensure ECs remain focused on owner-occupation rather than investment purposes.
The measures will apply to all EC Government Land Sale sites with tender closing dates on or after May 8.
EC owners must now wait 10 years before selling or renting out unit
Currently, buyers of new ECs must fulfil a 5-year MOP. Only then can they sell their units on the open market to Singapore Citizens and Permanent Residents.
Source: Otto Place EC
However, under the new rules, the MOP doubles to 10 years.
This means EC owners can only sell their units, rent out their entire flat, or purchase another residential property after completing the 10-year occupation period.
Owners can only sell EC units to Singapore Citizens and Permanent Residents after the first 10 years. They can sell their unit to any buyer after the 15th year.
MND said the move is intended to reinforce ECs’ original purpose as a more affordable housing option for Singaporeans aspiring to own private property.
Deferred Payment Scheme to be removed
MND also announced that developers will no longer be allowed to offer the Deferred Payment Scheme for uncompleted ECs.
Source: Otto Place EC
Under the DPS, buyers currently pay 20 per cent of the purchase price upfront, with 5 per cent required in cash, while the remaining 15 per cent can be paid using a combination of cash and CPF savings.
They can defer the remaining 80 per cent until the project obtains its Temporary Occupation Permit.
Buyers who opted for the scheme typically paid a 2-3% premium over the unit purchase price.
With the change, all EC buyers must use the Normal Payment Scheme, which requires them to make payments progressively based on construction milestones.
According to MND, the move encourages financial prudence and aligns EC payment arrangements with those for other uncompleted private residential properties.
More units reserved for first-time buyers
To give first-time buyers a better chance at securing an EC unit, MND will also increase the quota reserved for first-timers from 70 per cent to 90 per cent.
Source: Otto Place EC
MND will also extend the priority period from the current one month to two years after the project launch.
This means developers must reserve 90 per cent of EC units for first-time buyers during the first two years of sales. They can make the remaining units available to second-time buyers after this period.
MND said the intent for the enhanced quota and longer priority period is to provide greater support for young married couples and families purchasing their first home.
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Featured image adapted from Otto Place EC.
