EC scheme changes wef 9 Dec 2013
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hree tweaks to EC scheme
The executive condominium (EC) scheme has been tweaked to bring the terms for ECs closer to that for public housing and to support a stable and sustainable EC market.
The Ministry of National Development said yesterday that there will be three changes following a review, which took into account feedback from the Our Singapore Conversation.
The first change involves the Mortgage Servicing Ratio (MSR) for EC housing loans from financial institutions for units bought directly from developers. The MSR, imposed by the Monetary Authority of Singapore (MAS), will be capped at 30 per cent of gross monthly income and will apply to purchases where the option-to-purchase is granted today and hereafter.
Previously, the MSR did not apply to ECs. Analysts see this as an effective move to cool demand for this class of housing.
The second change is that second-timer applicants who buy EC units directly from developers must now pay a resale levy, just like second-timer applicants who buy Build-To-Order (BTO) flats. This is to "ensure greater parity", MND said.
This levy will range from $15,000 to $50,000, depending on the flat type of the first subsidised flat; if the first subsidised unit was an EC, the levy is $55,000.
The third and final change is the reduction in the cancellation fee for EC buyers from 20 per cent of the purchase price to 5 per cent, in line with the practice for BTO flats. This new cancellation fee took effect yesterday; it will apply to buyers of units in projects with land sales taking place from yesterday, including those where the tenders have not closed.
MND said that unlike private property buyers, EC buyers who cannot complete their purchase cannot sub-sell their units and have to pay a cancellation fee.
The previous cancellation fee, pegged at 20 per cent of the purchase price, imposed a significant financial burden on young couples who are unable to proceed with their marriage and hence, the EC purchase, MND said.
Source: Business Times –10 December 2013
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