The “sell one buy two” property strategy in Singapore is a method where property owners sell their current property and use the proceeds to purchase two separate properties. This approach is often used to own one property as a primary residence and the other as an investment property for rental income and capital gain. Here’s a case study that outlines the concept:
Case Study: Mr. and Mrs. Tan owned a 4-room HDB flat in Sengkang, which they sold for SGD 750,000. With the capital gain from the sale, they decided to invest in two private condominiums. They purchased one condominium for SGD 1,300,000 under Mr. Tan’s name and another new launch under Mrs. Tan’s name.
Strategy Breakdown:
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Sale of HDB Flat:
- Sold for: SGD 700,000
- Capital gain used for down payments of new properties.
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Purchase of Condominiums:
- Condo 1 (Primary Residence): SGD 1,300,000 (Mr. Tan)
- Condo 2 (Investment Property): New Launch (Mrs. Tan)
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Avoiding Additional Buyer’s Stamp Duty (ABSD):
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Investment Benefits:
- The second property is rented out, providing a steady stream of rental income.
- Both properties have the potential for capital appreciation over time.
Challenges and Considerations:
- Regulatory Changes: HDB’s tightened regulations on share transfer policy have made the “sell one buy two” strategy more appealing as decoupling is no longer an option for HDB owners1.
- Financial Planning: The Tans had to ensure they had sufficient funds for the down payments and could manage two separate mortgages.
- Market Risks: Like any investment, there are risks involved, including market fluctuations and the ability to secure tenants.
This case study illustrates how the “sell one buy two” strategy can be executed in Singapore’s property market. It’s important for property owners to consider their financial situation, market conditions, and regulatory environment before embarking on such an investment strategy. For more detailed information and guidance, do contact me for a no obligation consultation.
