DO NOT purchase an EC until ...
Income Ceiling Requirements for Purchasing an Executive Condominium (EC)
To qualify for purchasing an Executive Condominium (EC), the combined average income of two individuals must not exceed $16,000 over the last three months for salaried employees.
Income Ceiling Examples:
- Spouse A: $10K, Spouse B: $6K = Monthly Income: $16K - Eligible
- Spouse A: $10K, Spouse B: $4K = Monthly Income: $14K - Eligible
- Spouse A: $15K, Spouse B: $2K = Monthly Income: $17K - Not Eligible
- Spouse A: $10K, Spouse B: $8K = Monthly Income: $18K - Not Eligible
Based on the scenarios above, Couples 3 and 4 are not eligible to apply for the EC or the associated grant.
Important Considerations When Buying an EC
According to information from HDB.gov.sg, purchasing an EC requires a Minimum Occupation Period (MOP) of five years after collecting the keys. This means that from the time you book your EC, including construction time and MOP, you could be looking at a commitment of eight years or longer due to potential construction delays.
If you are considering buying an EC primarily for the grants offered by the government, it may be wiser to invest in a private condominium—provided you can afford it. We do not recommend stretching your budget just to keep up with others. One significant advantage of purchasing a private condo over an EC is that you are not bound by an MOP; you could sell the condo the day after purchase (subject to Sellers' Stamp Duty).
Grant Calculation Example
- Cost of EC: $1,000,000
- Grant Amount: $30,000
- Percentage of Grant Relative to EC Cost: 3%
From this calculation, we see that the grant represents only 3% of the purchase price. As the price of the EC increases, this percentage decreases.
It's crucial to consider whether you want to receive a 3% grant but wait eight years for it. Dividing $30,000 over eight years results in approximately $3,750 per year. Therefore, this grant should not be a deciding factor in your choice to buy an EC. However, if you're focused on potential appreciation, investing in an EC makes perfect sense.