While the term “asset progression” is used loosely these days, one thing should be clear: there’s a huge difference between planning to sell and upgrade (e.g., moving from a flat to a condo), versus actually wanting to own multiple properties. Wanting to own a second home is a bigger aspiration, that will require deeper pockets and more in-depth planning. In light of that, here are the key considerations to have even when buying your first home:

1. Flat, EC or Condo?

Remember, you can't decouple an HDB flat, so you will NOT be able to buy a second property without having to pay the ABSD if you ever plan to have 2 properties.

2. Joint tenancy versus tenancy-in-common

Under a joint tenancy, you and your co-owners are effectively treated as a single entity. This is preferred for most homeowners, but those aspiring to own a second home may not prefer it. As such, for those that start off with a private property as their first home might want to go with the 99-1 way instead. Here's how it works:

Say you own one per cent of the property, and your spouse owns 99 per cent. When it comes time to buy a second property, you transfer your one per cent to your spouse. You now own zero properties, and can purchase another residential unit without incurring ABSD. Your spouse owns one home and you own the other.

3. Deciding on the primary residence

Plan ahead for which of the properties will be your second home. This allows you to strategise where you will be spending your renovation budget on, and the amount of rental income that you can get to help with the budgeting.

4. Financing issues

The Loan To Value (LTV) ratio explains how much of the property can be financed. Under normal circumstances, this is capped at 75 per cent. However, the LTV will be lower if you have an outstanding mortgage. So you will need to plan your finances carefully should you want to achieve 2 properties.

For more please visit: https://stackedhomes.com/edito....rial/4-key-issues-to

To read up more on ABSD: https://stackedhomes.com/edito....rial/when-is-it-bett

Chapters
0:00 - Intro
1:12 - Should You Start With A HDB Flat/EC/Condo?
3:40 - Joint Tenancy Vs. Tenancy-In-Common
8:14 - Deciding On Your Primary Residence
9:36 - Financing Issues
14:13 - Outro

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Stacked is an online editorial aimed at helping Singapore home buyers, sellers and renters make better decisions. By regularly conducting research and publishing our findings, we hope to give our readers a much better perspective on buying, selling or renting Singapore real estate.

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