ST : Errant flat buyers face stiff penalties

Sep 4, 2010

Errant flat buyers face stiff penalties

Lying about ownership of overseas properties could land one in jail

By Esther Teo

PEOPLE who buy resale HDB flats face stiff penalties, including jail time, if they make false declarations about other property they own overseas.

The Housing Board (HDB) said yesterday that dishonest owners could be fined up to $5,000, jailed for up to six months or have their flats compulsorily acquired.

The penalties are part of sweeping new ownership rules announced on Monday.

Anyone who buys an HDB resale flat on or after Aug 30 must sell any additional private property - owned here or offshore - within six months.

Owners of non-subsidised HDB flats are affected as well. If they have not met the minimum occupation period (MOP) of five years, they will not be allowed to buy a private property here or overseas.

Applicants for an HDB resale flat who own or have an interest in any other property - here or overseas - must declare that interest in their application form.

If the property is overseas, applicants must show that it has been sold within six months of buying the HDB resale flat.

Even before the new rules, subsidised flat buyers had to declare that they did not own homes here or abroad. They were also barred from owning an HDB flat and private property - local or overseas - within the MOP as well.

'To ensure parity in the treatment of all HDB flat buyers, we subject buyers of non-subsidised flats to the same rule with effect from Aug 30 this year,' the HDB said.

'This helps to reinforce the long-term owner-occupation objective of HDB flats. All flat owners are allowed to buy a private property after their MOP.'

Breaking the rules could be costly. Making a false declaration could bring fines of up to $5,000 or up to six months in jail.

If the false declaration is discovered before the sale closes, the HDB can cancel the application and the sellers can seek redress from the buyer.

If the false declaration is discovered after the sale has been completed, the HDB can compulsorily acquire the flat.

These penalties are similar to existing ones homeowners face if they are found to own both a private property and a subsidised flat - such as a build-to-order home - concurrently during their MOP.

The HDB said it will be flexible on a case-by-case basis.

Experts say that while the penalties will be a deterrent, tracking homes bought overseas during the MOP would be difficult.

'The world out there is very different from Singapore and the question is how to enforce these rules overseas,' said HSR chief executive Patrick Liew.

He added that the rules also penalised Singaporeans from capitalising on good investment opportunities overseas.

A potential home buyer might have to place his $50,000 savings in a bank even though he might be able to invest in real estate in countries like Malaysia or the United States, he said.

esthert@sph.com.sg