LGBTQ Series (Part 2): Buying a home together for gay couples in Singapore – it’s possible, but…
In part 1 of our LGBTQ series, we looked at how single LGBTQ individuals could purchase a home of their own in Singapore. When we look at the marketing of properties here, the messages are almost always targeted at families and young couples (heterosexual couples to be exact.) Government grants and initiatives are in favour of married couples assisting them with property purchases , such as larger HDB grants and property options, and ABSD remission when upgrading and transitioning to another property.
Now given that our LGBTQ community is still fighting an old colonial law against gay sex between men, we cannot expect the government to be openly providing for our home ownership welfare. Thus, it is up to our own to figure out the system and still make our ‘pink’ mark on this little red dot.
For many LGBTQ couples alike, buying a home together is a ‘major’ – short of getting married legally (if ever possible in Singapore). Without a legal marital status, LGBTQ couples need to educate themselves on potential legal implications when it comes to sharing assets together; or how to deal with division of assets should things go sour; or estate legacy issue should one party passes away. When it comes to living in LGBTQ relationship, many things are not as clearly laid out as a legally married heterosexual couple.
Fortunately, there are ways around it, but the LGBTQ couples have to learn and agree to plan things out carefully together. So let me run through the different options for LGBTQ couples when it comes to home options from HDB public housing to private and EC(executive condo), and home rental. I will also touch on some legal implications on types of ownership and cohabitation contracts.
Buying an HDB flat together, it is possible…
Like the Single Singapore Citizen Scheme, there is very similar scheme that allows for more up to 4 single Singapore citizens to purchase an HDB flat together. It’s called the Joint Single Scheme (JSS), and under the JSS:
- All the co-applicants must be SCs.
- The flat must be bought jointly, i.e. each single SC must be listed as a co-applicant
- Unmarried or divorced: 35 years old or above
- Widowed or an orphan: 21 years old or above
- For orphans
- At least one of your deceased parents must have been an SC or SPR
- If you are below 35 years old, you must not have another sibling who is below 35 years old buying/owning another flat under the:
- Orphans Scheme
- Single Singapore Citizen Scheme
- Joint Singles Scheme
So for a LGBTQ couples, this scheme, thought not originally designed for them, became an option for them to purchase a flat together, but both have to be 35 years old and above.
Apply for a BTO HDB flat/Sale of Balance/Open Booking
A LGBTQ couple could use the Joint Singles Scheme to apply for BTO Flat from HDB. However, be ready for a tight squeeze, as they are only allowed to buy a 2-room Flexi flat in non-mature estates – this is exactly the same for Single Singaporean Citizen Scheme.
Do note that in HDB terminology, a 2-room Flexi is a one bedroom unit – not 2. (I am not sure how can they expect up to 4 person to share such a flat in the scheme.)
If you are ready for the squeeze, be reminded of this pre-requisites:
- Yo have to be a Singapore Citizens,
- At least 35 years old,
- Haven’t owned, disposed or have an interest in any local non-HDB or overseas property within 30 months of applying for the flat, and
- The combined gross monthly household income doesn’t exceed $7,000 (This could easily disqualify many couples, unless they are both in the lower income bracket group)
The Sale of Balance and Opening Booking offer another way of securing a flat from HDB directly, the requirements are the same as BTO. However it will be subject to availability as HDB has a formula for allocation of units amongst different priority groups. Not so easy, unless you are so lucky to get one, but it is an option.
LGBTQ couples buying from HDB under JSS could also be eligible for the Enhanced CPF Housing Grant (EHG) of up to $80,000 – based on income level. In additional, check out the Proximity Housing Grant of up to $15,000 if they choose to live with or close to their families (defined as anywhere within a 4 km distance).
This is a very good and affordable options especially for the lower income group to secure something.
Buy a resale HDB flat
Maybe the idea of squeezing into a small apartment with 1 bedroom may not be that ‘dream home’ some LGBTQ couples are wishing for. The JSS can also applies in the open HDB resale market. This opens up a whole lot of opportunities for the LGBT couples to pick and choose from a wide range of HDB types, size and not limited by location.
Of course, there are still some eligibility requirements to meet. The majority of the criteria stays with the exception of income ceiling – there is none. So for those who got kick out from HDB because their household income overqualified them for BTO, resale HDB is the way to go.
To add icing to the cake, HDB grants are also applicable to couples who combined income falls below $14,000.
Buying an Executive Condo (EC) unit
Now this is probably a pleasant surprise for many LGBTQ couples. Do you know that the EC is open to applicants under JSS as well?
Ok, for those of you who are not sure what is an EC? An EC or Executive Condos, are more affordable, subsidised variants of condos launched and sold by the HDB. As such, they come with a set of strict rules for buyers.
While an EC has the facilities and the looks of a condo, it only considered private property after the 11th year. These are the limitations of selling the property during this period:
- First 5 years: Like HDB flats, ECs cannot be sold to anyone until five years from the date of purchase of the unit
- 6th to 10th year: the unit can only be sold to a Singapore Citizen or PR who qualifies to buy an EC
- From the 11th year onwards: Selling restriction no longer applies; the unit can be sold to anyone, including a foreigner
So under the Joint Single Scheme (JSS):
- Two or more singles (max 4) aged 35 or above can buy the EC jointly together.
- In this case, the average gross monthly household income mustn’t exceed $16,000.
- Applicant(s) must not own other property overseas or locally, or have not disposed of any within the last 30 months;
- Have not bought a new HDB/ DBSS flat or EC, or received a CPF Housing Grant before; or, have only bought 1 of these properties/ received 1 CPF Housing Grant thus far.
But, here comes a downer: Although the income ceiling is much higher, the CPF Housing Grant for Singles/ Joint Singles is not available when buying an EC.
How about SPRs & Foreigners?
Buying a condominium or apartment
Having seen the options in the public housing arena, let us consider the private option – to buy a condo or apartment. This is probably is the best option (if finances allows) as:
- You don’t have to wait till you’re 35. Anyone above 21 years can buy a private property.
- You can purchase the private property regardless of your marital status.
- You can buy a private property as SPR or foreigner. However an ASBD (Additional Buyer Stamp Duty) will apply.
- A SPR buying a first property has to pay 5% ABSD
- A foreigner buying a first property pays 20% ABSD
- It is worth noting that a SPR and foreigner could waive his/her ABSD waived if he/she marries a Singaporean spouse and buying the property as a matrimonial home. Does not apply here for LGBTQ couples unfortunately.
For many LGBTQ couples, the idea of private property may seem out of reach, but the truth is there are a handful of affordable 1-2 bedder condominium units in Singapore that they could afford with proper planning. Having a LGBTQ friendly realtor work out the numbers and custom create a plan will help a couple achieve their goal of building a dream home together.
LGBTQ couples should also make CPF nominations and draft wills to ensure that their estate will be distributed in a manner consistent with their intentions. I will touch on this in the later section below.
Having a LGBTQ friendly realtor work out the numbers and custom create a plan will help a couple achieve their goal of building a dream home together.
So you’ve both found that dream home and are ready to dive in…
BUT WAIT! Let’s make sure we cover these first:
Types of home ownership
The amount of money that each party contribute to the home may not be equal and is a private agreement between both party. However, note that is entirely separate from how one legally own the home. So it is very important at the onset to decide on the type of home ownership. Any changes after signing on the dotted line with incur additional legal charges.
Under a Joint Tenancy, both parties have the rights of a single owner, and hold an equal interest in the whole property.
This means any legal decision regarding the property (e.g. to sell the property) must be made jointly. This arrangement resembles most closely with the rights of a married couple to their property.
Joint Tenancy also means that if (touch wood!) one party passes away, the right of survivorship applies – their ownership of the property is automatically transferred to the surviving co-owner, regardless of whether they have left a will.
This may sounds all good, but no one can guarantee a happy ever after story. Relationship can go south.
When a married couple splits their property, the court will look at both financial and non-financial contributions of each party before coming to a verdict. If in the case of a LGBTQ couple going to court to divide their property, they’ll be treated as two private individuals rather than related parties or a family unit. This means non-financial contributions might not be taken into as serious account.
It will also be hard kick a party out against their will – this makes it much harder to split up if one party wants out but the other doesn’t, because both are tied to the huge asset.
A Tenancy-In-Common means both parties have a distinct, separate share in the property. This share could be equal or unequal.
So it can be split based on how much each person is putting into the apartment. It is also a chance to discuss as a couple how you intend to split the cost of up-keeping the property – bills, utilities, groceries etc. It’s not the most romantic thing to talk about, but trust me, it is a conversation that is needed in a committed long term relationship.
Maybe share of the property doesn’t really matter if when both are living in the property. But when the time comes want to dispose of the property, that’s where Tenancy-In-Common differs from Joint Tenancy. Each party is entitled to confer their share of the property to someone else or leave their share to someone other than the co-owner in a will.
At at glance, this might be a simple clean cut approach to split the property ownership, but it also presents a different set of problem should (touch wood!) one person passes away without a will. The share of the deceased person will distributed under the laws of intestate succession – a technical way of saying that the legal system decides how your estate is distributed. Without a legalised marriage, a LGBTQ ‘spouse’ would not fall under the act. Thus, the surviving owner may then find that the deceased person’s relatives now own say, 50% of the property together with him or her. Now, that could be a recipe for disaster if the relatives do know get along with the surviving owner. The relatives may also demand that the surviving owner pay rent or even sell the property and split the sale proceeds.
Therefore, if a LGBTQ couple choose a Tenancy-in-Common manner of holdings, they should supplement it with a written will by both parties to spell out how they intent to distribute their remaining assets.
In certain situations, it might be practical for only one person in the relationship is to be the legally registered owner of the property.
For instance, if a same-sex couple is looking to buy a HDB flat, but only one partner is 35 years of age while the other has a long way to go. The other partner has no legal say in anything to do with the home, which also means they technically don’t have legal rights to stay in the home, either.(They can be listed as a tenant, as if he rent a room from the owner.) You can ‘try’ to apply to HDB upon the younger party turning 35 to add his name as a co-owner under JJS. Do note that cases like this are very rare and it will be subject to HDB approval on case by case basis (providing valid reason why a switch is needed). A better way is to plan sell off the existing flat and upgrade to another new unit under JSS after the 5-year Minimum Occupancy Period is met for the first flat.
On the private property side, an informal trust (resultant trust) can arise if one partner makes contributions to the mortgage without obtaining legal title to the private property. However, to avoid uncertainly and potential disagreements, it is still recommended for the couple to draft a trust document, witnessed by a lawyer, in the event that the couple in question intends for the party with no legal title to have some interest to the property.
If one partner is a SPR or foreigner, unlike a married couple where they can seek waiver of ABSD, the LGBTQ couple cannot. As a result, they may decide to buy under the Singaporean partner’s name. However, note that the above method of using a trust document to secure their interest cannot apply – as SPR and foreigner cannot own a property in SG under trust. For such case, if both parties are financially contributing to the cost of the home that only one person legally owns, consider getting a loan agreement drawn up through a bank, which requires that the owner repays the other party’s contribution as a loan.
Get in touch with a LGBTQ friendly realtor and lawyers who can better understand such issues to create the custom solution for you.
Essentially, a cohabitation contract is a contract that contains clauses governing matters such as the division of property and the management of day-to-day finances. It functions like any other contract in governing the relationship between the cohabiting LGBT couple.
The main benefit of having a well-drafted cohabitation contract is that each party’s respective liabilities and entitlements can be clearly set out, and this would help avoid long-drawn disputes over such liabilities and entitlements in the event of a separation. However, the main disadvantage is the uncertainty as to whether cohabitation contracts will be enforced in Singapore due to the fact that such cases have yet to be considered before the courts.
For many LGBTQ couples, rental might be the first step for them to try out the cohabiting arrangement before taking the big step of buying something together. When it comes to finding a place, renting an entire unit is definitely preferred unless you are sharing with friends or fellow LGBTQ, or LGBTQ-friendly housemates.
In Singapore, there are no anti-discrimination laws protecting tenants from discrimination on any grounds, including sexuality. Further, it is important to note that the Suggested Tenancy Agreement in the Consumers Association of Singapore – the standard template used for many leases – contains a clause which states that the tenant cannot use the flat for any illegal purpose of activities of an improper nature. Because LGBTQ couples are cannot be legally married Singapore, a disagreeing landlord may rely on this clause may rely on this clause to attempt to evict LGBTQ tenants. Therefore, LGBTQ couples should negotiate to remove this clause as a precautionary measure.
To sum up, buying a property together is wonderful , but it is also a huge commitment, financially and a significant step in the relationship. So it is important to mutually agree on the commitment, and talk to a LGBTQ friendly realtor and lawyer who are familiar with LGBTQ issues pertaining to property investment and the legal procedure to safeguard the your interest.
William Tan, Property Advisor For LGBTQ
The LGBTQ community has unique needs when it comes to property purchase. Getting advise from a LGBTQ-friendly or openly gay realtor will help you discuss such issues comfortably. If you want to start planning for your dream home, feel free to contact me for a non-obligatory chat. I will share different options to help you meet your objectives. Email: firstname.lastname@example.org ; Mobile: 65-93863406.