Disclaimer






"I am a BLOGGER NOT an expert. This is a BLOG not a 'go-to' website for official information. I represent no one's view save my own. I have neither legal nor financial training, nor do I have anything to do with the real estate industry. My understanding of the Collective Sale Process is from a layman's position only. My calculations, computations and tables are homespun and may contain errors. Please note that nothing in this blog constitutes any legal or financial advice to anyone reading it. You should refer to your lawyer, CSC or financial adviser for expert advice before making any decision. This disclaimer is applicable to every post and comment on the blog. Read at your own risk."
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There is one thing worse than an Enbloc ----- and that is an Enbloc done badly. Since the majority have the necessary mandate to sell, then they owe it to all SPs to make a success of it. Minority SPs can only watch and wait, if they sell then lets pray it's at a price we can move on with, if they don't sell, then we are happy to stay for a few more years.

My Sales Proceeds


So...... "How much am I going to get?"

Here is my attempt at doing the 50/50 Method of Apportionment. I am not a Valuer so it is UNOFFICIAL and just for my own amusement and because I like to do my own checking.

First, a few details:
Total Floor Area = 87,988 sqm (according to Huttons)
Total Share Value = (560x4) = 2240
Sales Price - $970,000,000

*Offiicial column added on 29/08/17

Collective Sale Costs & Expenses to be deducted from sales proceeds:
1) Marketing Agent Fee: 1% + GST
2) Legal Fee: 0.28% + GST
3) STB Fee: ($35,000/560) = approx $63 
4) Disbursements (photocopying etc): TBD

How To Check Your Floor Area

Everything is online and it is free to search for your own property details.



My Property details look like this:










How To Calculate Your CPF Refund
I am not going to wade into the Bank - CFP refund area. You can work that out for yourselves.
CPF refund rules changed on 01/01/2013 for those over 55yrs.

In general: The amount of CPF utilised towards the purchase of your property has to be returned to your CPF Ordinary Account, together with the accrued interest. Check your CPF Account

CPF WEBSITE











How to Calculate SSD (Sellers Stamp Duty)
SSD Calculator:





















https://www.iras.gov.sg/IRASHome/Quick-Links/Calculators/
https://www.iras.gov.sg/IRASHome/Other-Taxes/Stamp-Duty-for-Property/
https://www.iras.gov.sg/irashome/Other-Taxes/Stamp-Duty-for-Property/Working-out-your-Stamp-Duty/Selling-or-Disposing-Property/Seller-s-Stamp-Duty--SSD--for-Residential-Property/
Singapore relaxes SSD rates (Mar 2017)
IRAS e-tax Guide Stamp Duty (seventh edition)

From the REALIS website and Tampines Court Resale Transactions:
  • 48 units changed hands between 10/12/2013 and 26/05/2017. These would be liable for SSD. 
  • 5 units@16%,  21 units@12%,  16 units@8%,  6 units@4%.  
That's between$68k-$278k give or take! The 5 most recent sales escaped the punitive 16% bracket as they fall under the new rate of just 12%.

Today, I called the IRAS and the guy on the phone said the SSD needs to be paid 2 weeks from S&P. I told him there was zero information about SSD payable in Collective Sales on the website.

From a reliable source:
Those who are required to pay SSD will receive letters from the IRAS in due course They will be asked to settle within a stipulated time frame. There's nothing to worry about as they can always appeal for the amount to be paid in instalments."

I would say: CONTACT THE IRAS NOW as the SSD is due 5th SEPTEMBER!

The Retention Sum Until Vacant Possession
Owners will have 6 months to vacate their units upon legal Completion of Sale. The Buyer will retain $50k of your sales proceeds until you hand over the keys.

After paying off:
  • SSD (if applicable)
  • Collective Sale Costs & Expenses
  • Outstanding Mortgage Loan Amount 
  • Mortgage loan Pre-Payment Penalties
  • CPF Monies Utilised & Interest Accrued
  • Other costs (eg property Tax, Maintenance fees etc)
Some owners might suffer what is called a 'Shortfall'  - in other words, they might not have enough money for the $50k Retention Sum. I talked about this 10 years ago here  & here 

They will need to pay this sum in cash if no provision is made for them.

49 comments:

  1. Saw your strata title - leasehold. With the money you will receive from the en bloc sale, try to go for freehold - estate in fee simple or estate in perpetuity. Or just retire somewhere with the load of cash in hand

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  2. Then we still have to deduct for MA fees 1% and Legal fees right? For the net in pocket.

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  3. Would be useful to highlight that CPF monies used on the house will go back into the CPF account including accrued interest.

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    Replies
    1. I had hoped the Cpf monies used be refunded to OA and be optional to be withdrawn. I prefer the monies to be left at OA to earn interest.

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    2. what say u?..CPF monies definitely goes back to OA...u can then decide whether to use for the next purchase. leaving it there and earn interest is a good choice. but some folks would like to pay off everything for the next prop...no right and wrong. for retirees, probably goes back to RA which can be withdrawn if minimum sum is met.

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    3. I am above 55 and below 60, not retired yet. I had already set aside the full minimum sum for the RA. Also, property is fully paid. Cpf monies used plus interests is less than $500k. It is uncertain whether I get cash back or the amount go back to OA where I can decide to withdraw or not. Remainder proceeds of cash $1.2m is sufficient for my next property purchase. So I hope the ~$500k remain in Cpf to earn interests.

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  4. For those above 55 and already set aside the full minimum sum in the Cpf RA, will the Cpf monies used plus interest go back to Cpf OA?

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  5. 0.28% for the legal fee. That's good for a few mugs of Carlsberg for the legal associate who stood on stage last week and shouting "Is everyone excited? How many bids do we have?".....and then the box was opened...

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  6. Will IRAs consider the date of sale of Tc as 22August when they calculate seller stamp duty?

    ReplyDelete
    Replies
    1. No, it's the day of legal completion that counts.

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    2. Date of S&P (22 Aug 2017) or Legal Completion (TBD)...... I wish someone would definitively say which. My money is on S&P

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    3. S&P definitely

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    4. Date of disposal of the property is the one that counts. Until the day of completion you are still the legal owner.

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    5. Its S&P..no 2 ways about it. the law is very clear. got one shunfu case write to IRAS to ask for waiver this and that..and ask why not legal completion..go google. when it comes to SSD, whether u minority or majority...sign or not...does not matter...still need to pay period.

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  7. SSD is calculated from the time your exercise your option to purchase TC till 22nd August (S&P date to sell TC to Sim Lian). Also as far as the count on the number of properties held, TC no longer is counted; i.e. it will be minus 1 after 22 August (S&P date). A consideration when paying ABSD (Additional Buyer Stamp Duty). But better to wait for the dust to settle before committing to anything now..

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    Replies
    1. Some of you keep provide wrong information to mislead people. How could it be that IRAS would ask us to pay 16% of ssd within 14 days? Stop it!

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    2. According to IRAS we have to pay sellers stamp duty within 14 days of this agreement, I'm glad I am not liable for the 16%, who would have 16% of 1.75M available.

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  8. Now that we have reached this point, I urge all minority owners to come forward to sign. 100% SPs signature will enable us to bypass the STB application process and considerably shorten the time of the entire enbloc.

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    Replies
    1. Yes agree. Dragging makes no good for both majority and minority. We must help ourselves. There is a saying in Chinese, "A long night brings a lot dreams, meaning undue delay may bring trouble." I have a feeling that with so many en blocs in the pipeline, how will the state land be sold? I wouldn't be surprised if there is any cooling measure suddenly announced... touch wood.

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    2. There isn't a snowball's chance in hell of that happening so there is no point wasting anyone's time on the matter.

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    3. Got chance or no chance. The deal is already signed. Why not we get the money earlier instead of later. I rather quickly take the cash & run so life can moved on for me as to the other SPs.

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  9. Some of you keep giving wrong information to mislead people. How could it be That IRAS would asks to pay 16% of ssd within 14 days? Crazy!

    ReplyDelete
    Replies
    1. It may sound crazy, but it does actually say 'pay within 14 days of signing the S&P' on the IRAS website. Owners who have to pay SSD should definitely get this confirmed quickly - perhaps collective sales are given some leeway.

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    2. It's true. Affects other Enbloc too. SC of at least one got lawyers to write to IRAS on behalf of affected SP to defer payment until Enbloc payout is received.

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    3. Affected SP's been advised to contact IRAS directly with no guarantee of help, otherwise they can use Eldan Law (at additional fee) or their own.

      Delete
  10. Can blogger create a column featuring choice properties in Tampines, Simei or upper east coast rd ie, east region please? This is a very active blog. Quite a number of TCer visit here everyday. We may just use this platform to exchange info of next property search. Let's look forward guys.

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    Replies
    1. First must get the money fast before the property price goes up. Best 100% signature so we can bypass STB. Can u imagine, 2am an agent text me say property sold before any chance to negotiate.The location was where an enbloc was a success.

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  11. Fact 1: Anyone who exercise the option to purchase (not based on legal completion) TC after 22 August 2013 will be liable to pay SSD ranging from 4 to 16%.
    Fact 2: SSD has to be paid within 2 weeks from 22 August 2017 (S&P date of TC)
    Fact 3: Despite the SSD, no owners will suffer any financial loss; as a matter of fact all those who bought after August 2013 are staring at huge capital gains..so its a happy problem for them.
    Fact 4: Though its a happy problem, it may cause cashflow problem for some of the owners who are liabile to pay SSD...as quantum is huge..as much as 280,000 for some...
    Fact 5: Assistance has to be given to those who need help; otherwise some may unwittingly lodge a protest with STB because of this and delay the whole process. Notwithstanding the fact there is no case here as STB only interested in financial loss not cashflow problem.
    For most other SPs, its still business as usual...just some minor drama on top of your channel 5 and 8..

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    Replies
    1. How is having to immediately pay $280,000 a minor drama, it's a crass comment to make. Contrary to your opinion, this is not an episode of Tanglin. I don't think being in arrears of that sum to IRAS is a happy problem. The fine for late payment is 100% within 3 months and 400% after 6 months. These are huge amounts

      Hopefully the lawyer will be able to advise and assist our affected SPs, especially if the SC wants 100% to sign. This is a collective sale after all.

      Delete
  12. To the owner of the blogger:
    You should stop people provides wrong information on the web.
    Such as the stupid guy said SSD has to be within 2 weeks from 22 August 2017.

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    Replies
    1. From what I have read on the official websites, he is not wrong. Unless there is a special dispensation given to a Collective Sale which is not at all evident - this needs to be cleared one way or the other

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    2. I agree. This blog can cause lots of misreprensation & misinformation, knowingly or unknowingly. Concerned SPs should call or email relevant agencies hotline to get more accurate information.

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    3. Ok, I called the IRAS just now and the guy on the phone told me 2 weeks from the developer signing the S&P.

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    4. Blogger...on this i must commend u. Eventhough u dont have to pay SSD, yet u make sure u have to right info to keep those involved informed. Unlike some SPs who prefer to ignore the truth and start calling people "stupid"....classic case of the fool calling others fools..sad.

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    5. I still prefer to see it in black & white. People at the end of a phone line sometimes get things wrong rather than admit they don't know.

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  13. No special provision for enbloc sale. IRAS will tell u everyone bought with their eyes and ears wide open and take a calculated risks. Someone mentioned other enblocs got their lawyers to ask for deferment...any idea whats the outcome? My guess is deferment also cannot. Do note...if eventually the sale did not go through for whatever reasons, these owners can request for a full refund of the SSD paid (with no interest).

    ReplyDelete
    Replies
    1. ...Assuming said owners had the hard cash to pay in the first place. You can't get a refund if you don't pay. Those who cannot afford have only one choice, the STB, if the deal falls through, presumably the late payment fine is voided.

      Say that you had one owner who knew that they couldn't pay the SSD, knew they would get a 400% fine and knew that this would cause them to make a loss, even though the IRAS/STB is not interested in the loss incurred by the fine.

      Was it really fair to use pushy sale tactics, nasty letters and make them feel bad for not being part of the 80%. In this property market, Tampines Court offered good value for money based on location and size of property. It's nothing to do with taking a calculated risk, it's about making a home.

      As SP's we must understand the angst that our neighbours must be going through now, how can they even borrow such money with their mortgages in such infancy. While a lot of us will sleep with big smiles over the next few weeks on the profit we've made by being long-term owners in TC, our newer neighbours will not be sleeping so easily.

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    2. We also have new neighbors who make a $million or few hundred dollars profit in a matter of months or a year & some with additional rental income as he bought a tenanted unit.

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    3. There are also old neighbours who are crying now because he sold his unit just before the enbloc & missing the chance of making huge profit. So how ? Blaming everyone except himself ?

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    4. Yes, let's not trip over a small stone because some investors pay SSD as we climb this mountain. This only affects a handful of people.

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  14. We can sit here and discuss how Utopia should look like with regards to the implementation of the SSD...it is what it is. Actually the total amount that has to be paid is not too much in relation to the sales price...i reckoned its lesser than $10 mil..hopefully the developer or MA can come up with something to assist this group of SPs. Also not all are paying the full 280K...add to the fact some have their own cash..so we are looking at lesser than that..while it is an issue..it will not be a deal breaker.

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    Replies
    1. It had better not be a Beta Sum!

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  15. This is not the first enbloc my guess others has gone through the process without having problems, tonight let hear the lawyer what have to say don't paranoid things can be solve with discussions. I don't see other enbloc estate has all this commotions look on the bright sides.

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  16. For those recent buyers they knew the enbloc is on going.

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    Replies
    1. Yes, got to be fair to d long stayers, those of us who hv stayed many many years as opposed to those who just bought their units, esp those who buy recently and aiming for quick profit n windfall from the en bloc

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  17. This comment has been removed by the author.

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    Replies
    1. This will be reassuring news to SP's who exercised their option to purchase prior to the announcement of the EOGM in 2015 and SP's who exercised their option when the percentage of SP's who signed had stagnated at 45%, with all expectation that the 80% would not be reached.

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    2. From a reliable source: Those who are required to pay SSD will receive letters from the IRAS in due course . They will be asked to settle within a stipulated time frame. There's nothing to worry about as they can always appeal for the amount to be paid in instalments.

      Delete