Introduction

If you are out on a quest to fulfil your goal of owning a second property, decoupling is a term that you will definitely not miss.

In this article we will quickly explain what is decoupling and dive into answering some common questions that most property owners would have.

What is decoupling ?

Decoupling property is a go to method for property owners to acquire their second property without ABSD.

It works by initiating an internal buy and sell transaction between you and your spouse, who are joint owners of a property. One party will be selling his or her share of ownership in the property to the other party.

This essentially frees up one party’s name to purchase the second property without ABSD.

Having established a basic understanding of how decoupling works, let’s dive into answering some questions that could be top of mind.

Qn #1 – How long does it take for the entire decoupling process to be completed ?

The decoupling process would take 10 to 12 weeks to be completed. Note that additional 2 weeks is required for CPF funds to flow back into your account.

So if you require both the cash proceeds and cpf funds from decoupling for your second property purchase, you factor in a timeline of at least 14 weeks for all proceeds from decoupling to be ready for use.

Qn #2 – When can I proceed to purchase my second property without ABSD

Even though the decoupling process takes 10 to 12 weeks to be completed.

You are free to purchase your second property without ABSD as soon as you enter a contractual agreement to sell your share of ownership in your current property.

This is established as soon as you make an appointment at the law firm and sign the sale and purchase agreement. This entire process from making an appointment at the law firm to signing of S&P documents should not take more than 7 days.

Qn #3 – What is the cost of the legal fee for decoupling ?

The cost of the legal fee for decoupling starts from $5,000. The legal fee will vary depending on factors such as the valuation of the property, the presence of an outstanding bank loan or CPF reimbursement involved. 

Qn #4 – If both my spouse and I are Singaporean PRs, do we have to pay ABSD when decoupling ?

Yes, based on prevailing ABSD cooling measures, a 5% additional buyer stamp duty will be levied on SPRs even for first property purchase.

In the case of decoupling, you or your spouse purchasing shares from the other party will have to incur a 5% ABSD on the valuation of the share to be bought over.

Qn #5 – Can you decouple a HDB ?

Unfortunately, since the tightening of HDB share transfer regulation in 2016. HDB only allows for share transfer between joint owners for 6 special reasons, which comprises marriage, divorce, death of owner, financial complication, medical reason and renunciation of citizenship.

Qn #6 – What are the costs involved in decoupling ?

The cost of decoupling includes legal fee, early loan redemption penalty, buyer stamp duty and additional buyer stamp duty for owners that are not Singaporean citizens.

Final words

Advance Law LLC is a top rated legal counsel, providing specialist legal services in the area of property conveyancing and decoupling property. As reviewed in the article Best Decoupling Legal Services in Singapore.

This article was written in collaboration with Jue Wen, a real estate analyst from Decoupling Expertise. Decoupling Expertise, specialises in decoupling property, helping Singaporean property owners purchase their second investment property