Saturday, March 9, 2013

Finally bought a property! (Part 2)

Upon deciding to purchase Riversail, I brought my family members, fiancée, colleagues to view my chosen unit. They all feel it is a good buy, given current market situation. My fiancée who started work 6 years ago also said she could contribute some money for our future (be it for own stay or investment). All the better, then I will include her in the mortgagor as well. We did our sums and financing was extremely comfortable; she has about $70,000 CPF and $20,000 cash to contribute, I can cover the rest plus monthly installments till property is completed and ready to move in. It will be a tenancy in common 40%-60% arrangement.

We place a cheque with the agent and chose the highest floor unit.

However, if it is not meant to be yours, it will not be.

One morning I woke up and went to the IRAS website. I realized that because my fiancée is a PR, we are subjected to pay ABSD of 5%, even though I am a Singaporean. This pissed me off big time. I spent 2.5 years in NS and just because I am not married and want to get an unsubsidized private property, I have to pay 5% additional stamp duty? If we factor the usual 3%, we have to cough out almost $57,000 as taxes to the government! This is an excess of $39,000 in cash to the government. We were quite upset as this is no way to treat a SIngapore citizen, who refused to buy subsidise housing meant for more needy Singaporeans but will be treated as a PR instead. It is not about whether we can afford the condo unit, but rather whether we are willing to pay the tax that is a deadweight loss to us and society. It creates no value to anyone except the government.

We decide to retrieve back our cheque and look elsewhere for better valued properties.

We rationalised that since government wants to tax us, we will go the conventional way to enjoy subsidies on housing by leveraging my Singaporean identity and pink IC.

We were not keen at BTO, since the locations are poor and construction takes forever to complete. 2017 for the earliest in non mature estate. I will be a old man by then.

We went to look at the Design Build Sell Scheme at Parkland Residences, which was marketing almost $700,000 for a 2nd level 5 room flat. We decided that DBSS stands for Don’t Be So Silly (DBSS). It is simply not worth the premium when your competitors are just BTOs and by paying a little more, you will be able to get a similar location but smaller sized Executive Condominium (EC).

We went to look at Heron Bay, which left only west sun facing units and low levels dual key 3 bedroom units. The finishing was decent, but the leftover units did not excite us enough to even stay more than 10 minutes at the showflat.

We went over to 1 Canberra. The showflat was already there for about 1 year. Most of the units are west sun facing. If you choose units that are not facing the west, your balcony view will be blocked partially by the unit that covers your west sun. The layout of the condo development was extremely packed, possibly constrained by the small and trapezium shaped land.

Prices are not cheap, selling for 750 PSF with eight courtyards beside selling for 810 PSF. It does not seem to be of value and capital appreciation will be capped by the full condo beside 1 Canberra. The nearest eatery is koufu a good 10 minutes walk away.  There was some defects in the showroom, which we were appalled, given that even a showroom can have defects, we have little confidence in the actual delivery of the unit. The developer is from China, which has little track record in Singapore.

We decided to focus on looking for EC, given the subsidies by government and cheaper PSF would allow us to purchase a unit comfortable and not rush into marriage till 2-3 years later.

The next post will talk about our purchase of EC.


Drizzt said...

ah shucks. hoping for a good fairy tail ending


oldhorse42 said...

I would want the holding type to be joint tenant rather the tenancy in common. Any way, should discuss both holding types thoroughly with lawyer before deciding.