Singapore Property Update

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What are the differences between 99 year leasehold properties and HDB flats?

By Joe Wang


In land scarce Singapore, the majority of properties come with a limited lease of a 99 year tenure which includes both public and private housing.


Though both HDB flats and 99 year leasehold private properties come with a 99 year lease, there are many differences between the two which emanate from different types of ownership leading to different property rights and entitlements with regards to their sale, rental and refurbishment as encapsulated in different terms and conditions as stipulated in the contracts.


Ownership structure:

Buyers of 99 year old leasehold properties are buying a 99 year old strata properties which include the property and part of the land on which the property is built.


Leasehold private properties are strata title properties while HDB flats are not. Strata title allows individual ownership of part of a property (called a lot’ and generally an apartment or townhouse), combined with shared ownership in the remainder (called ‘Common Property’ e.g. foyers, driveways, gardens) through a legal entity known as the MCST or Management Corporation Strata Title which is responsible for managing the property and the surrounding land.


In contrast, HDB flat buyers are only buying the 99 year old lease from HDB. They own the lease, but not the flat or land on which it is built. HDB retains the ultimate ownership of the land and flat.



Due to this fundamental difference in ownership, contracts of sale for HDB flats and 99 year old leasehold properties have different legal terms and conditions of sale.
When one buys a 99 year old leasehold property from a private developer, the contract is called a “Sales and Purchase” agreement between the Vendor (developer) and Purchaser whereby the Vendor agrees to sell the property to the Purchaser.


However, when one buy a HDB flat from HDB, the contract is known as a “Lease Agreement” between the Lessor (HDB) and the Lessee (buyer).


According to the Oxford dictionary of English:

A LESSOR is a person who leases or lets a property to another; a landlord.

A LESSEE is a person who holds the lease of a property; a tenant.
The contract also stipulates clearly that HDB in consideration agrees to “lease the registered estate or interest to the LESSEES”


Sale of property

Owners of 99 year leasehold private properties can sell or rent their flat immediately after taking possession of it to Singaporeans and foreigners.


Though HDB flats can be sold in the open market, HDB flat owners are only selling the remaining years of their lease and not the flat itself.


HDB, being the rightful owner, has imposed the following conditions on the sale of HDB flats:

  1. A minimum 5 year occupancy period before the flat can be sold.
  2. Racial quota: Singaporeans can only sell to their own ethnic race. For example, a Malay can only sell his/her HDB flat to another Malay and not to a Chinese or Indian.
  3. HDB flats can only be sold to a Singaporean or PR. Foreigners are not allowed to buy.
  4. There is no limit to the number of private properties one can own so long one can afford it. HDB flat owners can only own one HDB flat at any point in time and they are not allowed to purchase a private property at the same unless they sell off their flats.
  5. As HDB retains the ultimate ownership rights of HDB flats as stipulated clearly in the Lease Agreement, it can impose additional conditions and restrictions on the Lessees at any point in time. It can even decide one day that Lessees are not permitted to sell their flats and there are no legal avenues for them to seek recourse.


Photo: Old HDB flats at Airport Road


Collective sale


Leasehold private property owners can call for an en bloc to sell to private developers 10 years after taking possession of it so long they are able to get an agreement from more than 80 percent of the owners. HDB flat owners are unable to sell their flats en bloc to private developers and can only sell it to the government under the proposed Voluntary En Block Redevelopment Scheme (VERS) when the lease runs down to twenty years or Selective En Bloc Redevelopment Scheme (SERS) which is the compulsory acquisition of their flats by HDB.


Refurbishment and upgrading of flats

Leasehold private property owners have the right to refurbish and upgrade their property and immediate surroundings at any point in time while HDB flat owners have to wait for HDB to roll out upgrading plans for their flats. Even then, they have no say in how their flats are being refurbished.



Owners of 99 year old leasehold private properties can rent out their property immediately upon taking possession while HDB flat owners have to fulfill the 5 year Minimum Occupancy Period for BTO flats and 3 years for resale flats before they can do so. They also have to write in to HDB to seek permission first before they can sublet their flats. Only Singapore Citizens are allowed to rent out the HDB flat. Singapore Permanent Resident flat owners are not allowed to do so.

Other conditions for rental of HDB flats include:

The minimum rental period for each tenant must be 6 months per application. You are not allowed to rent out your flat or bedroom on a short-term basis, as it may disrupt the living environment and pose security concerns for our residents.

The rental period is indicated in the approval letter, up to a maximum of 3 years if all the tenants are Singaporeans or Malaysians. The maximum is capped at 1.5 years for non-Malaysian non-citizen tenants. Non-citizens refer to Singapore Permanent Residents and foreigners. You are required to reapply for approval each time you rent out your flat or renew the application.


Use of premises

Owners of leasehold private properties can use their residential address as a registered office while HDB flat owners have to write in to seek approval from HDB first.


Repossession of flats

HDB is empowered to repossess HDB flats from lessees which are used for non-residential purposes or subletted illegally to foreigners without any compensation. While owners of private properties can get prosecuted for similar offences as well, the state has no right to repossess their properties.


Unlocking the property value

99 year leasehold private property owners are allowed to use their properties as a collateral to borrow money from the bank while HDB flat owners are not allowed to do so as their flats are ultimately owned by HDB.
Unlike HDB flat owners, owners of private properties also have the option of taking a home equity line of credit from banks which is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower’s equity in his/her house (akin to a second mortgage).



HDB flat “ownership” is in reality a hybrid between outright ownership and long term tenancy. HDB has ownership over all HDB flats in Singapore. Lessees do not own the flat or land on which it is built, but the lease from HDB which is permitted currently to be sold to another party under strict conditions. As such, the value of HDB leases will inevitably decline with time and cannot be considered as an asset in the conventional sense.


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About the Author

Joe is a property enthusiast who bought his first property in Singapore at the age of 26 in 2005. From 2005 to 2015, he built a portfolio of 6 private properties in Singapore and has since sold three of them realizing a net profit of between 60 to 100 percent. He made his first million dollars in property investing at the age of 30 and has now amassed a property portfolio in Singapore, Australia and Malaysia worth more than $10 million dollars.

Joe is a conservative long-term property investor who believes in life-long learning and education in property investing. He does not claim to be a property expert or guru, but rather an adventurer who is in the middle of a self discovery journey to achieve financial freedom from his property investments.

Email Joe at:

Updated: October 4, 2018 — 9:33 am

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