Sg Men in 50s

[k1976]

What is a Negative Sale of HDB Flat and CPF Refund?​

Maelyn Lagman
7 October 20244-min read

Homeownership in Singapore is often viewed as a safe investment, a reliable way to grow wealth. But what happens when the value of your HDB flat drops, and you face a "negative sale"? While the term may stir anxiety in most homeowners, a negative sale isn’t necessarily all doom and gloom. In fact, there are hidden benefits that could turn this seemingly unfortunate situation into an unexpected opportunity. Let’s explore why an HDB negative sale might not be the financial disaster it’s made out to be.

Editor’s Note: A negative sale can also happen with private properties, but this article is focused on ‘negative sale’ in an HDB transaction

What is a negative sale?​

If the sale proceeds of your property, after clearing off your outstanding mortgage loan, are insufficient to cover the full CPF refunds (Principal Amount used + Accrued Interest), it is what we call a ‘negative sale’ or ‘negative CPF sale’.

Here’s an example of how a negative sale occurs:​

Selling Price - Outstanding Mortgage - CPF Refunds (Principal CPF + Accrued Interest) = Negative Sale​

Selling Price	$420,000
Outstanding Mortgage Loan	$250,000
Sale Proceeds Left After Paying Off Outstanding Mortgage Loan	$420,000 - $250,000 = $170,000
Total CPF Refund (Principal Amount + Accrued Interest)	$150,000 + $40,000 = $190,000
Negative Sale (Sale Proceeds Left - Total CPF Refund)	$170,000 - $190,000 = -$20,000

In the scenario above, the sale proceeds of $170,000 are not enough to cover the total CPF refund of $190,000, after paying off the $250,000 outstanding loan.

So what happens to this $20,000 shortfall due to CPF?​

If the sale proceeds (including the deposit) after clearing off your outstanding housing loan are not enough to make the required CPF refund, you do not need to top up the shortfall in cash, provided the property is sold at market value or higher.

In other words, the shortfall is waived as long as you have sold the property at market value.

 

[k1976]

In this scenario, the negative sale of $20,000 is NOT an out-of-pocket loss.

Bear in mind, in this scenario, while the total CPF refund is $190,000, the principal amount used (meaning your own CPF monies) is $150,000.

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The other $40,000 is the accrued interest accumulated over the years on the principal amount that has been withdrawn from your CPF Ordinary Account (OA) to finance your property. So while some accrued interest has instead become a realised interest loss after the sale, at least it's not an out-of-pocket loss.

What happens to the deposit when there is a negative sale?​

When there is a negative sale, all the cash monies that you have received as the Deposit (Option fee + Option Exercise fee), have to be refunded to your CPF account before the completion of the sale transaction.

So remember to keep aside the cash you received and deposit them into your CPF account when HDB informs you to do so.

3 ways to avoid making a negative sale​

• Pay your home loan in cash, not with your CPF
• Choose a bank loan with a lower interest rate
• Don’t hold on to the property for too long

 

[k1976]

Not a dying business: Singapore’s death trade is thriving as its population ages​

Mr R. Jayaselvam, owner of Anushia Flower Shop, making flower garlands using Button Roses at his shop in Little India. ST PHOTO: BRIAN TEO

Chin Soo Fang
Senior Correspondent
Updated

Oct 13, 2024, 06:38 AM

FacebookTelegram

SINGAPORE – Death is brisk business for garland maker R. Jayaselvam these days. Out of every 100 garlands he crafts, 60 are for funerals, while the rest are for weddings.

Over the past five to six years, he has seen a 10 to 15 per cent rise in demand for funeral garlands.

“Many people are ageing, and the number of departed souls is also increasing,” said the 59-year-old owner of Anushia Flower Shop in Little India.

 

[Dr Christopher Cheok C S]

Same here, no choice need to loon n loon everyday...no good rosy outlook.

i got a friend working in bank. Many year ago, he told me that if someone defaulted on their credit card dues for 4 months, that person will likely be bankrupt eventually.

A kopitiam drinking acquaintance just got stroke last month. When he was working, he proudly applied for many credit cards and at the end of every month, transfer credit ($$$) from one card to his bank account, then use it to pay off another card to reduce his penalty interests. Kept rolling and rolling and very boastful to me as if he was a master financier. (You cannot use one credit card to pay off another directly).

Sighzzz, debt trap

 

[k1976]

i got a friend working in bank. Many year ago, he told me that if someone defaulted on their credit card dues for 4 months, that person will likely be bankrupt eventually.

A kopitiam drinking acquaintance just got stroke last month. When he was working, he proudly applied for many credit cards and at the end of every month, transfer credit ($$$) from one card to his bank account, then use it to pay off another card to reduce his penalty interests. Kept rolling and rolling and very boastful to me as if he was a master financier. (You cannot use one credit card to pay off another directly).

Sighzzz, debt trap

Credit card can use to invest de...but need to be careful and prudent lah....some peepur use credit card to huat bitcoin few years ago...tio burn badly and 走火入魔

 

[k1976]

In this scenario, the negative sale of $20,000 is NOT an out-of-pocket loss.

Bear in mind, in this scenario, while the total CPF refund is $190,000, the principal amount used (meaning your own CPF monies) is $150,000.

ADVERTISEMENT

The other $40,000 is the accrued interest accumulated over the years on the principal amount that has been withdrawn from your CPF Ordinary Account (OA) to finance your property. So while some accrued interest has instead become a realised interest loss after the sale, at least it's not an out-of-pocket loss.

What happens to the deposit when there is a negative sale?​

When there is a negative sale, all the cash monies that you have received as the Deposit (Option fee + Option Exercise fee), have to be refunded to your CPF account before the completion of the sale transaction.

So remember to keep aside the cash you received and deposit them into your CPF account when HDB informs you to do so.

3 ways to avoid making a negative sale​

• Pay your home loan in cash, not with your CPF
• Choose a bank loan with a lower interest rate
• Don’t hold on to the property for too long

Property is know as 不动产，good luck if u treat it as a highly liquid asset...unless u hold a GCB, then another story

 

[cocobobo]

What is a Negative Sale of HDB Flat and CPF Refund?​

Maelyn Lagman
7 October 20244-min read

Homeownership in Singapore is often viewed as a safe investment, a reliable way to grow wealth. But what happens when the value of your HDB flat drops, and you face a "negative sale"? While the term may stir anxiety in most homeowners, a negative sale isn’t necessarily all doom and gloom. In fact, there are hidden benefits that could turn this seemingly unfortunate situation into an unexpected opportunity. Let’s explore why an HDB negative sale might not be the financial disaster it’s made out to be.

Editor’s Note: A negative sale can also happen with private properties, but this article is focused on ‘negative sale’ in an HDB transaction

What is a negative sale?​

If the sale proceeds of your property, after clearing off your outstanding mortgage loan, are insufficient to cover the full CPF refunds (Principal Amount used + Accrued Interest), it is what we call a ‘negative sale’ or ‘negative CPF sale’.

Here’s an example of how a negative sale occurs:​

Selling Price - Outstanding Mortgage - CPF Refunds (Principal CPF + Accrued Interest) = Negative Sale​

Selling Price	$420,000
Outstanding Mortgage Loan	$250,000
Sale Proceeds Left After Paying Off Outstanding Mortgage Loan	$420,000 - $250,000 = $170,000
Total CPF Refund (Principal Amount + Accrued Interest)	$150,000 + $40,000 = $190,000
Negative Sale (Sale Proceeds Left - Total CPF Refund)	$170,000 - $190,000 = -$20,000

In the scenario above, the sale proceeds of $170,000 are not enough to cover the total CPF refund of $190,000, after paying off the $250,000 outstanding loan.

So what happens to this $20,000 shortfall due to CPF?​

If the sale proceeds (including the deposit) after clearing off your outstanding housing loan are not enough to make the required CPF refund, you do not need to top up the shortfall in cash, provided the property is sold at market value or higher.

In other words, the shortfall is waived as long as you have sold the property at market value.

Accrued interest is ownself owe ownself... Lol

 

[Dr Christopher Cheok C S]

old movie - passed that stage

 

[Ah Max]

old movie - passed that stage

妻不如妾，妾不如婢，婢不如妓，妓不如偷。但是偷的话可要浸猪笼的

 

[tobelightlight]

Not a dying business: Singapore’s death trade is thriving as its population ages

The correct statement should be

Not a dying business: Singapore's death trade is thriving as its population gets vaccinated.

 

[Robert Half]

I'm an exception.

1. I ain't broke and I'm still single.

2. I own two houses (a HDB flat which I'm staying in and a landed property which I rent out). I eat mostly at hawker centres and Kopitiams.

3. I don't need a job as I create jobs for people cos I'm the boss of the company.

bro .. you should find a PRC gf & get married

 

[Robert Half]

In this scenario, the negative sale of $20,000 is NOT an out-of-pocket loss.

Bear in mind, in this scenario, while the total CPF refund is $190,000, the principal amount used (meaning your own CPF monies) is $150,000.

ADVERTISEMENT

The other $40,000 is the accrued interest accumulated over the years on the principal amount that has been withdrawn from your CPF Ordinary Account (OA) to finance your property. So while some accrued interest has instead become a realised interest loss after the sale, at least it's not an out-of-pocket loss.

What happens to the deposit when there is a negative sale?​

When there is a negative sale, all the cash monies that you have received as the Deposit (Option fee + Option Exercise fee), have to be refunded to your CPF account before the completion of the sale transaction.

So remember to keep aside the cash you received and deposit them into your CPF account when HDB informs you to do so.

3 ways to avoid making a negative sale​

• Pay your home loan in cash, not with your CPF
• Choose a bank loan with a lower interest rate
• Don’t hold on to the property for too long

(1) Ideally is to pay your home loan partially with cash & CPF

(2) HDB concessionary loan of 2.6% is the best in the world

(3) For those who bought resale flats .. it’s good to hold the property longer as it’s will appreciate greatly

 

[tobelightlight]

I'm an exception.

1. I ain't broke and I'm still single.

2. I own two houses (a HDB flat which I'm staying in and a landed property which I rent out). I eat mostly at hawker centres and Kopitiams.

3. I don't need a job as I create jobs for people cos I'm the boss of the company.

Are you able to stay out of the country and live oversea freely? even though you have a biz to run. If you can, it will be perfect, imo. i dunno about you but if i were you, i will not let any pussy come near me to busybody my assets.

 

[tobelightlight]

bro .. you should find a PRC gf & get married

That is a dangerous advice, PRC somemore. dun make pple bankrupt leh.

 

[Balls2U]

Are you able to stay out of the country and live oversea freely? even though you have a biz to run. If you can, it will be perfect, imo. i dunno about you but if i were you, i will not let any pussy come near me to busybody my assets.

I had my fair share of pussies in my younger days. Now, pussies don't appeal much to me anymore. I still have to look after my mom. So relocating overseas may not be an option at this moment.

 

[Balls2U]

bro .. you should find a PRC gf & get married

Married? With an ATB? You're making my toes laugh! You think I stupid or what?

 

[Robert Half]

That is a dangerous advice, PRC somemore. dun make pple bankrupt leh.

bro .. there are still good decent single PRC ladies around & not all that bad la

 

[Robert Half]

Married? With an ATB? You're making my toes laugh! You think I stupid or what?

No la bro .. I am not thinking that you are stupid just hope that you find a good PRC girl so you can have a good life partner.

We shouldn’t discriminate them ..

 

[NanoSpeed]

No la bro .. I am not thinking that you are stupid just hope that you find a good PRC girl so you can have a good life partner.

We shouldn’t discriminate them ..

In this forum, ALL ATBs are shit EXCEPT 刘姐。

 

[Robert Half]

In this forum, ALL ATBs are shit EXCEPT 刘姐。

If one is looking at those working in massage parlours, KTV or hang flower clubs then they are the wrong people