HDB is NOT an Asset

[richwang]

If you are in the illusion that owning a HDB is having an asset, please wake up:

1) Banks don't accept it as collateral, so your title deed is worthless;
2) Creditors cannot grab your HDB even if you go bankrupt (good!);

Need experts to share the following:
3) Once divorced within MOP, do you need to sell your flat to HDB Board if you are not eligible for singles scheme (<35 years old, or 2 PRs);
4) How about if the owner passes away, will the children need to sell (cannot own 2 HDB by inheritance).

In summary, HDB is more like your clothing - for consumption, not a real asset.

Thanks,
Richard
PS. I've long realized cars are not assets, now I need to add one more.

[Kelonguni]

Whether it's an asset depends on how you use it.

3. Technically need to sell. Not too sure whether you can buy your share from the spouse.

4. For compassionate reasons, I have a friend whose parents have passed and his brother still has the flat, unmarried and in his twenties.

[richwang]

Can I re-finance my fully paid up HDB to get some money (of CPF)?

If not, never pay up your HDB.

Thanks,
Richard

[richwang]

My wife's friend is getting divorced. She was told they can only sell to HDB because it is still with MOP. Do I get it wrong?

Thanks,
Richard

[thomastansb]

Technically, it is an asset. Just because you can't use it for collateral doesn't mean it is not an asset. It can produce value (rent out) and therefore, it fully qualified as an asset.

Your point 1 is directly related to point 2. The Government don't want creditors to claim your HDB so you have a place to stay even if your ass get sued. I think we have to give credit to the Government for this.

So if no creditor can claim your HDB, you can't use it for collateral. But it is 100% an asset. There is no argument about it.




If you are in the illusion that owning a HDB is having an asset, please wake up:

1) Banks don't accept it as collateral, so your title deed is worthless;
2) Creditors cannot grab your HDB even if you go bankrupt (good!);

Need experts to share the following:
3) Once divorced within MOP, do you need to sell your flat to HDB Board if you are not eligible for singles scheme (<35 years old, or 2 PRs);
4) How about if the owner passes away, will the children need to sell (cannot own 2 HDB by inheritance).

In summary, HDB is more like your clothing - for consumption, not a real asset.

Thanks,
Richard
PS. I've long realized cars are not assets, now I need to add one more.

[eng81157]

Can I re-finance my fully paid up HDB to get some money (of CPF)?

If not, never pay up your HDB.

Thanks,
Richard

if you take a loan from HDB, i'm pretty sure there isn't any re-financing option (there's only a flat rate linked to CPF OA interest)

for private bank loans, i think it's possible.

[jwong71]

If you are in the illusion that owning a HDB is having an asset, please wake up:

1) Banks don't accept it as collateral, so your title deed is worthless;
2) Creditors cannot grab your HDB even if you go bankrupt (good!);

Need experts to share the following:
3) Once divorced within MOP, do you need to sell your flat to HDB Board if you are not eligible for singles scheme (<35 years old, or 2 PRs);
4) How about if the owner passes away, will the children need to sell (cannot own 2 HDB by inheritance).

In summary, HDB is more like your clothing - for consumption, not a real asset.

Thanks,
Richard
PS. I've long realized cars are not assets, now I need to add one more.

yes, cant sell in the open market if divorce and still within mop,or <35.

if parents passed away, and inherit a hdb. either one got to sell own or parents hdb. cannot hold onto 2 hdb.

*etc a previous case, tanjong pagar hdb sold at valuation becos of inherit and own its hdb. and court order to sell within a timeframe

[august]

Whether it's an asset depends on how you use it.

3. Technically need to sell. Not too sure whether you can buy your share from the spouse.

4. For compassionate reasons, I have a friend whose parents have passed and his brother still has the flat, unmarried and in his twenties.

4. allowed under Orphan Scheme.

[gn108]

How abt inheriting a HDB but staying in Pte and then renting out the HDB?



yes, cant sell in the open market if divorce and still within mop,or <35.

if parents passed away, and inherit a hdb. either one got to sell own or parents hdb. cannot hold onto 2 hdb.

*etc a previous case, tanjong pagar hdb sold at valuation becos of inherit and own its hdb. and court order to sell within a timeframe

[eng81157]

How abt inheriting a HDB but staying in Pte and then renting out the HDB?

sell the former.

[House]

It s just a roof, never a asset.

[ysyap]

Accordingly to robert kiyosaki, your HDB is an asset if it doesn't take money out of your pocket. So when you rent it out, and your rental income > monthly serving of HDB mortgage loan, then its an asset. When you finally sell it at an appreciated value, it gives back more than you bought it so its also considered an asset (provided you must sell it). Just that it has loads of restrictions but an asset nonetheless under the right conditions! ;)

[bigapplefan]

yes, cant sell in the open market if divorce and still within mop,or <35.

if parents passed away, and inherit a hdb. either one got to sell own or parents hdb. cannot hold onto 2 hdb.

*etc a previous case, tanjong pagar hdb sold at valuation becos of inherit and own its hdb. and court order to sell within a timeframe

if in case of inherit, lets say younger brother has no hdb/condo, older brother has private condo, will court split share of HDB to both younger and older brother (i.e. force them to sell and split the proceeds), or younger brother will inherit the whole HDB?

[thomastansb]

I don't know who is Robert. I only know what I studied my Uni.


Assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset).




Accordingly to robert kiyosaki, your HDB is an asset if it doesn't take money out of your pocket. So when you rent it out, and your rental income > monthly serving of HDB mortgage loan, then its an asset. When you finally sell it at an appreciated value, it gives back more than you bought it so its also considered an asset (provided you must sell it). Just that it has loads of restrictions but an asset nonetheless under the right conditions! ;)

[iwantgizmos]

in my opinion, anything not fully paid is not an asset...
it is still considered a liability if there is still outstanding mortgages....

[DKSG]

in my opinion, anything not fully paid is not an asset...
it is still considered a liability if there is still outstanding mortgages....

This thinking is technically wrong.

The property is an asset. And loan is a liability.
Value of asset can go up without a corresponding increase in liability.

Liability can go down (eg inflation).

Net of the asset and liability is the equity of the property.

Dont pray pray hor!

Office Boy got study accounting one...

DKSG

[JohnTan]

in my opinion, anything not fully paid is not an asset...
it is still considered a liability if there is still outstanding mortgages....

Not really true in my opinion, anything generating positive cashflow is an asset as long as the income minus costs outweigh the liabilities.

[gn108]

Even say a sub-leased lease?
Like I lease a space (cld be commercial) and then rent that for a positive cash-flow. So that counts too?


Not really true in my opinion, anything generating positive cashflow is an asset as long as the income minus costs outweigh the liabilities.

[maisonjai]

Even with a fully paid HDB/PC, no doubt it appreciates in value but if u are residing in it & there are monthly expenses to it right, so liability or asset?
Till u cash out or when u kaput then next generation benefits from this asset.

So Yellow cab is an asset coz can generate income...heh heh

[Jonathan0503]

Even with a fully paid HDB/PC, no doubt it appreciates in value but if u are residing in it & there are monthly expenses to it right, so liability or asset?
Till u cash out or when u kaput then next generation benefits from this asset.

So Yellow cab is an asset coz can generate income...heh heh

It is still an asset because your are residing in it and deriving value from it (in this case it is intangible in nature).

You need to pay rent to have a roof if you don't have this fully paid hdb right?

[Jonathan0503]

Even say a sub-leased lease?
Like I lease a space (cld be commercial) and then rent that for a positive cash-flow. So that counts too?

A lease (short-term) is normally not considered an asset because you don't own the property (ie, risk and reward still lies with the landlord).

A long term lease can sometimes be classified as an asset. But this is more complicated and need a series of tests to determine.

Those who know accounting will know what I mean....

[ysyap]

I don't know who is Robert. I only know what I studied my Uni.


Assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset).
Get to know Robert. He's one of the reason why I'm into property investment (just an ikan bilis though). He's having a conference in Singapore next month... ;). If I don't remember wrongly, he has some 4500 properties around the world. :D

[carbuncle]

Who dunno Robert? Robert aka 萝卜commonly known as 菜头 or carrothead
http://www.bonappetit.com/images/tips_tools_ingredients/ingredients/ttar_carrot_03_v_launch.jpg

[Arcachon]

http://daveharman.com/wp-content/uploads/2012/02/Robert_Kiyosaki_The_Business_School_For_People_Who_Like_Helping_People1.jpg

Robert Toru Kiyosaki (born April 8, 1947)

http://www.youtube.com/watch?v=fEJA4-8WiWU

[Laguna]

Need experts to share the following:
3) Once divorced within MOP, do you need to sell your flat to HDB Board if you are not eligible for singles scheme (<35 years old, or 2 PRs);
4) How about if the owner passes away, will the children need to sell (cannot own 2 HDB by inheritance).

Not expert, but try to answer
3) Yes, u must sell, unless u still can form the family neuclus, ie single parent with children
4) yes, u must sell, no way u can own two HDB flats


Can I re-finance my fully paid up HDB to get some money (of CPF)?

Just checked with banks, no way.


My wife's friend is getting divorced. She was told they can only sell to HDB because it is still with MOP. Do I get it wrong?

Thanks,
Richard

I think so. Sell back to HDB at cost.

[richwang]

The mistake I've made was fully paid up my HDB - I thought I own the "asset".
1) Now I cannot re-finance to get cash/CPF;
2) Bank don't accept it as collateral.
3) Government agency does NOT accept it as proof of "asset" (regardless that I have the title deed). To your surprise? To my surprise as well!

So tell me what kind "asset" this is.

Market is smarter, no wonder it is selling at something like 50% discount (comparing with a PC with the same LH99, no swimming pool, no security guard, etc).

Thanks,
Richard
PS. If you are in indeed "renting" an HDB, why in a hurry to pay all the rentals. How silly I am. I just hope others can learn from my lesson.

[ysyap]

The mistake I've made was fully paid up my HDB - I thought I own the "asset".
1) Now I cannot re-finance to get cash/CPF;
2) Bank don't accept it as collateral.
3) Government agency does NOT accept it as proof of "asset" (regardless that I have the title deed). To your surprise? To my surprise as well!

So tell me what kind "asset" this is.

Market is smarter, no wonder it is selling at something like 50% discount (comparing with a PC with the same LH99, no swimming pool, no security guard, etc).

Thanks,
Richard
PS. If you are in indeed "renting" an HDB, why in a hurry to pay all the rentals. How silly I am. I just hope others can learn from my lesson.Well our Singapore system is a weird system. If paying off your HDB allows you to get 80% LTV for 2nd property and the outstanding amount for your HDB payoff is less than the additional 20% for your 2nd property, then by all means pay off to qualify you for a larger loan amount! In that sense, its still a plus point. At half price from a typical PC, a HDB is already greatly subsidized public LH living so don't expect to get out of it what a PC can offer. According to your definition, HDB is half an asset then because of rental opportunity! :cheers6:

[thomastansb]

Yeah. That is how it works.




This thinking is technically wrong.

The property is an asset. And loan is a liability.
Value of asset can go up without a corresponding increase in liability.

Liability can go down (eg inflation).

Net of the asset and liability is the equity of the property.

Dont pray pray hor!

Office Boy got study accounting one...

DKSG

[thomastansb]

I don't see any issue. You own the asset, you can sell it. What is the issue here? In fact, it is a good measure so people still have a roof even though they are bankrupt. Benefit 99% of the population. Anyway, they sell to you at 50% off, what more you want?

I am not surprised at what HDB tell you because it has been said many many times HDB cannot be used as collateral because no one can repossess your HDB. I thought this has been all over the news over and over again?





The mistake I've made was fully paid up my HDB - I thought I own the "asset".
1) Now I cannot re-finance to get cash/CPF;
2) Bank don't accept it as collateral.
3) Government agency does NOT accept it as proof of "asset" (regardless that I have the title deed). To your surprise? To my surprise as well!

So tell me what kind "asset" this is.

Market is smarter, no wonder it is selling at something like 50% discount (comparing with a PC with the same LH99, no swimming pool, no security guard, etc).

Thanks,
Richard
PS. If you are in indeed "renting" an HDB, why in a hurry to pay all the rentals. How silly I am. I just hope others can learn from my lesson.

[phantom_opera]

Ha ha ha ... rich wang hopes he can borrow money from the bank using his HDB as collateral to gamble in stock or MBS

This is exactly what the garmen is trying to prevent ... this garmen is trying very hard not to take care of the poor and old, if homeless lagi jialat ;)

[Arcachon]

The mistake I've made was fully paid up my HDB - I thought I own the "asset".
1) Now I cannot re-finance to get cash/CPF;
2) Bank don't accept it as collateral.
3) Government agency does NOT accept it as proof of "asset" (regardless that I have the title deed). To your surprise? To my surprise as well!

So tell me what kind "asset" this is.

Market is smarter, no wonder it is selling at something like 50% discount (comparing with a PC with the same LH99, no swimming pool, no security guard, etc).

Thanks,
Richard
PS. If you are in indeed "renting" an HDB, why in a hurry to pay all the rentals. How silly I am. I just hope others can learn from my lesson.
Now I know why there are so many people paying off their HDB loan.

1. Don't know that they cannot cash out.
2. To pay LTV 80%.
3. There was a time when people need to pay off to rent out the whole unit below 10 years MOP.

http://business.asiaone.com/Business/News/Story/A1Story20120124-323676.html

Prior to 2003, HDB flats could only be rented out if the owner could present proof that they had been living overseas for a certain period. The rules were further relaxed in 2005, when the MOP for subletting was further reduced to 10 years for lessees with an outstanding HDB loan, and 5 years for all other lessees. In 2007, HDB flat owners could sublet their whole flats after meeting the MOP of five or three years, depending on whether the flat had been purchased with a housing subsidy.

Don't think of selling and buying another HDB to cashout, you need 5 years MOP.

http://www.hdb.gov.sg/fi10/fi10323p.nsf/w/RentOpenMktRentOutWholeFlat?OpenDocument

To sublet the entire flat, you need to satisfy the condition of a 3-year or 5-year Minimum Occupation Period (MOP).

You are allowed to sublet your whole flat if you have occupied your:
Non-subsidised flat (flat purchased from the open market without a CPF housing grant) for at least 3 years if your application for the purchase of the flat was received before 30 Aug 2010;
Non-subsidised flat (flat purchased from the open market without a CPF housing grant) for at least 5 years if your application for the purchase of the flat was received on or after 30 Aug 2010;
Subsidised flat (flat purchased directly from HDB or from the open market with a CPF housing grant) for at least 5 years

[kane]

it's an asset because the rental cash flow is decent.

[Arcachon]

My wife's friend is getting divorced. She was told they can only sell to HDB because it is still with MOP. Do I get it wrong?

Thanks,
Richard

My neighbor live a young couple, first years see them together go in and out of the unit together, later they do it in different timing. A bit later the man did not stay in the house and most of the time empty. One day the woman bring a Ang Mo home and they went out together. Once 5 years MOP is due the unit was sold.

For those who know friend getting divorce can share the above story before they sign the paper work.

[maisonjai]

hi richwang, are u a PR? Is it u felt shortchanged coz u paid resale price instead of buying a PC? Which I think u can afford to.

[Leeds]

From an accounting stand point, any thing that has a certain dollar value is an asset. However, asset can be an appreciating asset or depreciating asset. Property is a fixed asset which does not accord any depreciation while a car is also an asset but depreciate over time. However, property will need regular revaluations to reflect its true value. Therefore, the value of the property need to be adjusted upward or downward over time to reflect its true value.

Asset and loan are Balance Sheet item so it will not be reflected in your profit and loss account. However, when you sell your asset, the profit or loss at the point of disposal will affect your P/L statement.

[richwang]

From Accounting rules:

Land doesn't depreciate.
Property, Plant, and other "fixed" assets do depreciate.
If I remember correctly, the longest depreciate years you can use is 30 years. I think there are 60 years introduced later. Cannot remember you can use 99 years to calculate depreciation.

Thanks,
Richard

[richwang]

"Land and buildings are separable assets and are accounted for separately, even when they are acquired together."

http://www.worldgaapinfo.com/singapore.php

Cannot find anything specific for HDB.

Thanks,
Richard

[richwang]

This is US accounting rule for tax purpose.

40 years is the longest period I can find for deprecation.

http://www.irs.gov/pub/irs-pdf/p946.pdf

Anyone knows the Singapore deprecation rule for PPE (Property, Plant and Equipment)?

Thanks,
Richard

[richwang]

http://www.icpascaa.org.sg/wp-content/uploads/2010/08/Practice-Guidance-2-Depreciation-of-Freehold-Buildings-21.pdf

For freehold buildings, the depreciation period is 50 years.
That should give us the max.

Thanks,
Richard

[richwang]

Let's lighten the topic a bit, and list down the residential buildings more than 50 years old.

http://www.skyscrapercity.com/showthread.php?t=443854

The pictures are very interesting.


Thanks,
Richard

[hyenergix]

Let's lighten the topic a bit, and list down the residential buildings more than 50 years old.

http://www.skyscrapercity.com/showthread.php?t=443854

The pictures are very interesting.


Thanks,
Richard

The cars have very cool design. Some of the blocks are still standing today. The children must be very old now.

[irisng]

From Accounting rules:

Land doesn't depreciate.
Property, Plant, and other "fixed" assets do depreciate.
If I remember correctly, the longest depreciate years you can use is 30 years. I think there are 60 years introduced later. Cannot remember you can use 99 years to calculate depreciation.

Thanks,
Richard

From what I know, depreciation for commercial ppty is calculated based on the following example:-
Eg. LH 99 years commencing from Yr 1976
OTP = Yr 2011
Yrs of usage = Yr 2011 - Yr 1976 = 35 yrs
Remaining yrs = 99 yrs - 35 yrs = 64 yrs
Therefore Depn will be calculated based on
Ppty Price divided by No. of remaining yrs
= 1 yr depreciation (this amount will apply to the rest of the yrs depn until the last yr that need to +/- the difference)

[Jonathan0503]

http://www.icpascaa.org.sg/wp-content/uploads/2010/08/Practice-Guidance-2-Depreciation-of-Freehold-Buildings-21.pdf

For freehold buildings, the depreciation period is 50 years.
That should give us the max.

Thanks,
Richard

The accounting standards generally do not stipulate how long you can depreciate an asset.

Different organisation can dep the assets accordingly as long as it is reasonable can be justified.

It may also depend on environmental condition and usage so it may differ from location or location, or from country to country.

The guiding principle is whether we are still deriving economic benefits out of the asset.

So if a building is so old (say > 50 years) that is has become unsafe, or a major overhaul is required to maintain the safety of the building, then 50 years will generally be considered as the estimated economic useful life and we will use this as the depreciation life.

[gn108]

This is the point...HDB/Gahmen owns the HDB flat and the land.
It lease out the flat to you/Richard as a leasee.
So you only "lease" the space....hence he can't use this as collateral.


A lease (short-term) is normally not considered an asset because you don't own the property (ie, risk and reward still lies with the landlord).

A long term lease can sometimes be classified as an asset. But this is more complicated and need a series of tests to determine.

Those who know accounting will know what I mean....

[carbuncle]

My neighbor live a young couple, first years see them together go in and out of the unit together, later they do it in different timing. A bit later the man did not stay in the house and most of the time empty. One day the woman bring a Ang Mo home and they went out together. Once 5 years MOP is due the unit was sold.

For those who know friend getting divorce can share the above story before they sign the paper work.
You forgot to add - and both original couple got 100k profit in pocket each!!!! So win win win win for all - husband, wife, angmo and govt. Now i know where the angmos in heartland come from...

[carbuncle]

The mistake I've made was fully paid up my HDB - I thought I own the "asset".
1) Now I cannot re-finance to get cash/CPF;
2) Bank don't accept it as collateral.
3) Government agency does NOT accept it as proof of "asset" (regardless that I have the title deed). To your surprise? To my surprise as well!

So tell me what kind "asset" this is.

Market is smarter, no wonder it is selling at something like 50% discount (comparing with a PC with the same LH99, no swimming pool, no security guard, etc).

Thanks,
Richard
PS. If you are in indeed "renting" an HDB, why in a hurry to pay all the rentals. How silly I am. I just hope others can learn from my lesson.
There is a way out for you. Move elsewhere or buy a PC and sublet out the whole hdb. Now it is generating full income in full cash profit for you...

[Ilikeu]

I would say HDB is an asset, or to be more specific a non collateralized asset...

___________________

HDB flats no longer a collateral (http://www.condosingapore.com/property-management-news/2010/7/28255/hdb-flats-no-longer-a-collateral)



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Amendments to the Housing and Development Bill have already been passed in Parliament under a ‘certificate of urgency’, a move that is aimed at preventing moneylenders from pushing homeowners to use HDB flats as collateral for any debt other than as mortgage.

A growing number of HDB homeowners are using their properties as collateral to pay off loans. A total of 12 registered resale applications with caveats lodged by moneylenders were recorded in 2008, and this number increased to 546 in 2009 and to 556 in the first half of this year.

The government wants to stop this worrying trend. “A HDB flat is for long-term home ownership. I cannot over-emphasise this fact,” said Mr. Mah Bow Tan, Minister for National Development.

However, the new law will only work if homeowners do not prematurely encash their retirement asset.

“If the flat owners already plan to sell their flat and take a loan from a licensed moneylender, for example as a bridging loan to meet some urgent needs, the caveat ensures that the loan would be paid from the sales proceeds,” said the minister.

The amended bill prevents moneylenders from claiming caveats to have first cut of the sales proceeds of a seller’s flat.

Mr. Mah also said the amended bill will not affect existing agreements with legitimate caveats lodged to recognise the contracts’ sanctity.

The amendments also do not affect financial institutions, as they can still grant loans on the flat’s security for the purpose of financing its purchase.

[carbuncle]

hi richwang, are u a PR? Is it u felt shortchanged coz u paid resale price instead of buying a PC? Which I think u can afford to.
Bro rich is PR from Taiwan the land of 1000 episode tv drama... The type of FT we all love, unlike some other countries... I remember fondly the days where Made In Taiwan is a promise of quality...

[maisonjai]

There is a way out for you. Move elsewhere or buy a PC and sublet out the whole hdb. Now it is generating full income in full cash profit for you...
x 2. Higher yield too.

[richwang]

Bro rich is PR from Taiwan the land of 1000 episode tv drama... The type of FT we all love, unlike some other countries... I remember fondly the days where Made In Taiwan is a promise of quality...

Sis, not trying to disappoint you, but I am a Singapore citizen now.
When my banker asked me today:"so Richard, where were you originally come from?"
I answered: "Sichuan, China."
Banker: "where?"
Richard: "you know the Ferrari guy?"
Banker: "oh, I see. You mean you were from the Panda's home."

He is smart. And I'd better shut up.

Thanks,
Richard
PS. I hate the Ferrari killer like every Singaporean.

[ysyap]

Welcome to Singapore. My colleague from Sichuan too but got his application for citizenship rejected, despite staying in Singapore for 10 years already and has been a PR for many years now... Can share secrets how to be successful in citizenship application? :cheers6:

[richwang]

How about one day if HDB changes rule: not allow whole unit to be rented out? I guess a lot young Singaporeans will welcome this policy, and the existing rental collectors will have little to protest because:

HDB is not meant as an income generating asset.
HDB is mainly for a roof - an expense item.

You know in creative accounting, one of the easy way is to reclassify an expense item as asset?

For PC, if someone comes up with a rule saying you cannot rent out for income, you have the full rights to pretest - because it is an asset.

Thanks,
Richard

[thomastansb]

Huh? What you talking? So LH99 condo can use as collateral? The land is own by Government.




This is the point...HDB/Gahmen owns the HDB flat and the land.
It lease out the flat to you/Richard as a leasee.
So you only "lease" the space....hence he can't use this as collateral.

[thomastansb]

I think people here got it wrong. Asset doesn't mean rent out then consider as asset.

[Sleepyhead]

Welcome to Singapore. My colleague from Sichuan too but got his application for citizenship rejected, despite staying in Singapore for 10 years already and has been a PR for many years now... Can share secrets how to be successful in citizenship application? :cheers6:

I think the gahmen got unwritten (at least in public domain) that to apply for citizenship, one should be highly educated, earn above average income, and have family with young children.

[Arcachon]

How about one day if HDB changes rule: not allow whole unit to be rented out? I guess a lot young Singaporeans will welcome this policy, and the existing rental collectors will have little to protest because:

HDB is not meant as an income generating asset.
HDB is mainly for a roof - an expense item.

You know in creative accounting, one of the easy way is to reclassify an expense item as asset?

For PC, if someone comes up with a rule saying you cannot rent out for income, you have the full rights to pretest - because it is an asset.

Thanks,
Richard

You got to ask LKY, his idea is for Singaporean to rent out HDB and stay in PC. But over the years the gov change their mind and start to increase the price of the HDB and give market subsidy instead of gov subsidy.

[roly8]

Welcome to Singapore. My colleague from Sichuan too but got his application for citizenship rejected, despite staying in Singapore for 10 years already and has been a PR for many years now... Can share secrets how to be successful in citizenship application? :cheers6:
is he earning well enough?

SG only like people who got alot of $$$ to live here:D:spliff2:

[carbuncle]

Sis, not trying to disappoint you, but I am a Singapore citizen now.
When my banker asked me today:"so Richard, where were you originally come from?"
I answered: "Sichuan, China."
Banker: "where?"
Richard: "you know the Ferrari guy?"
Banker: "oh, I see. You mean you were from the Panda's home."

He is smart. And I'd better shut up.

Thanks,
Richard
PS. I hate the Ferrari killer like every Singaporean.
王先生,我们非常欢迎您,您是所有新新加坡公民的好榜样!

[richwang]

I also love, love, love Taiwanese drama. Indeed watch Korean dramas as well. One thing in common is their family value touches heart.

Thanks,
Richard

[carbuncle]

I also love, love, love Taiwanese drama. Indeed watch Korean dramas as well. One thing in common is their family value touches heart.

Thanks,
Richard
I also watch... But its for the Handsome boys. Especially Korean ones... Drool

[irisng]

You got to ask LKY, his idea is for Singaporean to rent out HDB and stay in PC. But over the years the gov change their mind and start to increase the price of the HDB and give market subsidy instead of gov subsidy.

I heard that you have to pay back the grant to HDB (if you have taken one) when you sell your unit, is it true?

I overheard someone was telling his friend. His son has got a chance to select a new BTO in a mature estate, while his parents old HDB block has been selected for enbloc. So his son suggests that his parents move in to stay with him while his parents future new flat can be rented out. Is this the loop hole of the law for people to make use of HDB to generate income? I hope I'm not offending anyone in this forum.

[Arcachon]

I heard that you have to pay back the grant to HDB (if you have taken one) when you sell your unit, is it true?

I overheard someone was telling his friend. His son has got a chance to select a new BTO in a mature estate, while his parents old HDB block has been selected for enbloc. So his son suggests that his parents move in to stay with him while his parents future new flat can be rented out. Is this the loop hole of the law for people to make use of HDB to generate income? I hope I'm not offending anyone in this forum.
You mean asking parents to stay with them is not encourage?:doh:

Do you know why the last 5 years the gov. did not build enough HDB, where are the newly wed staying.

Now KBW just show hand and build 25K and everyone is happy:cheers4:

http://4.bp.blogspot.com/-OsrQe7Pql3o/T3Saf7CHj8I/AAAAAAAAHA0/T7HXO8k8g28/s1600/Marriage.JPG

http://1.bp.blogspot.com/-pL9UGCqupYw/T3SZnpFjNzI/AAAAAAAAHAs/xLcLBUAHldM/s1600/2006+2010.JPG

http://3.bp.blogspot.com/-p9Zyr6jyIw8/T22Mv3wkfoI/AAAAAAAAG7c/Dk8xxiAsiv0/s1600/Yearbook+2011.JPG

[Arcachon]

http://3.bp.blogspot.com/-R9ytaxK4NOY/TztxSKBiD5I/AAAAAAAAGp4/qZAe9HAMnpQ/s1600/Singapore+marry+per+year.JPG

[phantom_opera]

thank you brother for consolidation of stats .... solid

[phantom_opera]

How about one day if HDB changes rule: not allow whole unit to be rented out? I guess a lot young Singaporeans will welcome this policy, and the existing rental collectors will have little to protest because:

HDB is not meant as an income generating asset.
HDB is mainly for a roof - an expense item.

You know in creative accounting, one of the easy way is to reclassify an expense item as asset?

For PC, if someone comes up with a rule saying you cannot rent out for income, you have the full rights to pretest - because it is an asset.

Thanks,
Richard

impossible, Singaporeans asset rich cash poor, when lau kok kok (old already) who will support? MCYS $400 per month public assitance program?? Rent out one room and eat 2 meals at hawker center loh :cheers6:

[Regulators]

On hdb being an asset, i think many hdb dwellers have the mentality that their flats will one day get SERS. This is an area that has not been tested and i think the govt is pressured to keep to their word. Why I say that? MM Lee told the whole singapore not to sell their hdb flats hold it and treat it as a valuable asset and allow their flat prices to grow, so imo it is hard to take back this powerful message addressed to singaporeans. However, the reality is that leases run down so how is the govt going to handle this issue when 30 years later, majority of hdb flats are eligible for SERS and prices would inevitably fall? Wouldn't this be opposite of what MM said regarding keeping the hdb flat as a long term asset and a means to preserve the hard-earned wealth of majority of singaporeans? I think the ball would be on the court of the govt and they might use lease top-up or SERS as a political trump card to continue keeping them in power (but still too far to speculate). If the govt can remove the main upgrading programme (MUP), there is no saying what they might do with SERS in the not so distant future.

[Arcachon]

On hdb being an asset, i think many hdb dwellers have the mentality that their flats will one day get SERS. This is an area that has not been tested and i think the govt is pressured to keep to their word. Why I say that? MM Lee told the whole singapore not to sell their hdb flats hold it and treat it as a valuable asset and allow their flat prices to grow, so imo it is hard to take back this powerful message addressed to singaporeans. However, the reality is that leases run down so how is the govt going to handle this issue when 30 years later, majority of hdb flats are eligible for SERS and prices would inevitably fall? Wouldn't this be opposite of what MM said regarding keeping the hdb flat as a long term asset and a means to preserve the hard-earned wealth of majority of singaporeans? I think the ball would be on the court of the govt and they might use lease top-up or SERS as a political trump card to continue keeping them in power (but still too far to speculate). If the govt can remove the main upgrading programme (MUP), there is no saying what they might do with SERS in the not so distant future.
Don't have to wait until SERS.

Example:
Toa Payoh 195 (http://forums.condosingapore.com/) 01 to 05 66.00
Improved 1973 $277,000.00 Mar 2012
39 years old HDB, balance 60 years.

TOA PAYOH
-
*
$1,900

Median Subletting Rents $1,900.

$277,000 - Val $262,000 = $15,000

20% of 262,000 = $ 52,400

Down $52,400+$15,000=$67,400

Loan 30 years $204,600

Monthly Payment: S$ 666.57 Loan Amount: S$ 204600 Interest Rate: 1.09% Term of Loan: 30 years
Rent out for $1,900 if still got loan still positive cash flow.

HDB when rented out is Positive cash flow, Asset.

The Question is how the owner get his next PC or stay with children.

[Arcachon]

I heard that you have to pay back the grant to HDB (if you have taken one) when you sell your unit, is it true?


For those within MOP yes.

For those who sold their HDB and chose not to pay the levy, they have to pay the levy when they buy another new HDB.

http://www.hdb.gov.sg/fi10/fi10322p.nsf/w/SellFlatResaleLevy?OpenDocument

[Douk]

The hdb that sers now are 30 year old, 10-15 years later, there will be plenty of 30-40 yo flats from pasir ris to jurong. Is sers still sustainable ? :tsk-tsk:

[phantom_opera]

For those within MOP yes.

For those who sold their HDB and chose not to pay the levy, they have to pay the levy when they buy another new HDB.

http://www.hdb.gov.sg/fi10/fi10322p.nsf/w/SellFlatResaleLevy?OpenDocument

The levy is slowly eroded by inflation, 40k 15y ago is very different from 40k today and 40k 10y down the road. I would say paying a levy 10y down the road is probably peanut if inflation continues to stay at current rate.

[DC33_2008]

With no increase in population, where to find eligible working adults to pay taxes to fund these SERS programme. Otherwise, raise tax bracket for eligible working adults.
The hdb that sers now are 30 year old, 10-15 years later, there will be plenty of 30-40 yo flats from pasir ris to jurong. Is sers still sustainable ? :tsk-tsk:

[carbuncle]

On hdb being an asset, i think many hdb dwellers have the mentality that their flats will one day get SERS. This is an area that has not been tested and i think the govt is pressured to keep to their word. Why I say that? MM Lee told the whole singapore not to sell their hdb flats hold it and treat it as a valuable asset and allow their flat prices to grow, so imo it is hard to take back this powerful message addressed to singaporeans. However, the reality is that leases run down so how is the govt going to handle this issue when 30 years later, majority of hdb flats are eligible for SERS and prices would inevitably fall? Wouldn't this be opposite of what MM said regarding keeping the hdb flat as a long term asset and a means to preserve the hard-earned wealth of majority of singaporeans? I think the ball would be on the court of the govt and they might use lease top-up or SERS as a political trump card to continue keeping them in power (but still too far to speculate). If the govt can remove the main upgrading programme (MUP), there is no saying what they might do with SERS in the not so distant future.

30 yrs later, MM Lee si kiaokiao liao. What he said doesnt matter anymore.

[irisng]

You mean asking parents to stay with them is not encourage?:doh:

Do you know why the last 5 years the gov. did not build enough HDB, where are the newly wed staying.

Now KBW just show hand and build 25K and everyone is happy:cheers4:


Agree, staying with parents is encouraged provided that they are filial but some youngsters simply make use of their parents to earn extra income for themselves or treat them like a maid. I have come across a case, the couple rents out their HDB flat, collect rent and "keep warm warm" inside their pockets without giving any allowance to their parents. Instead their parents have to cook for them, wash clothing for them and help to look after their grandchildren, bring them to school, help to pay their school fees etc, all these are at their parents expenses, so is this type of attitude being encouraged. :rolleyes:

[carbuncle]

Agree, staying with parents is encouraged provided that they are filial but some youngsters simply make use of their parents to earn extra income for themselves or treat them like a maid. I have come across a case, the couple rents out their HDB flat, collect rent and "keep warm warm" inside their pockets without giving any allowance to their parents. Instead their parents have to cook for them, wash clothing for them and help to look after their grandchildren, bring them to school, help to pay their school fees etc, all these are at their parents expenses, so is this type of attitude being encouraged. :rolleyes:

I have seen some parents willingly do all the abv u mentioned just so they can have the joy of grandchildren.

[Regulators]

In 2042, do you think the value will remain at this price? Mm Lee was talking about preserving wealth with the hdb flat. My question is how does the hdb dweller preserve wealth when asset prices will eventually come down from its current mark one day. A toa payoh 5rm flat with 60yr left may sell at $750k now, but what happens if it had only 30yr left? I will probably still be around to see that day coz I am only in my thirties.


Don't have to wait until SERS.

Example:
Toa Payoh 195 (http://forums.condosingapore.com/) 01 to 05 66.00
Improved 1973 $277,000.00 Mar 2012
39 years old HDB, balance 60 years.

TOA PAYOH
-
*
$1,900

Median Subletting Rents $1,900.

$277,000 - Val $262,000 = $15,000

20% of 262,000 = $ 52,400

Down $52,400+$15,000=$67,400

Loan 30 years $204,600

Monthly Payment: S$ 666.57 Loan Amount: S$ 204600 Interest Rate: 1.09% Term of Loan: 30 years
Rent out for $1,900 if still got loan still positive cash flow.

HDB when rented out is Positive cash flow, Asset.

The Question is how the owner get his next PC or stay with children.

[Regulators]

People will remember and if govt don't keep to their word, they can lose a big chunk of votes in future if govt allows devaluing of hdb asset.
30 yrs later, MM Lee si kiaokiao liao. What he said doesnt matter anymore.

[maisonjai]

Should that day comes when HDB devalues dragging the market down, who dares to take that hot seat at MND, whatever party? Like US banks, ruling party will be too big to fall liao. kekeke. More ppl vested in ppty, saddled with loans so will ruling party lose more votes? :confused:

[hopeful]

With no increase in population, where to find eligible working adults to pay taxes to fund these SERS programme. Otherwise, raise tax bracket for eligible working adults.

it has been mentioned a few times that it is a ponzi scheme.
you required ever greater numbers of migrants to support the scheme.

[carbuncle]

it has been mentioned a few times that it is a ponzi scheme.
you required ever greater numbers of migrants to support the scheme.

Suddenly i am enlightened.

Social hierarchy is triangle shaped.
Family tree also upright triangle.
Most org charts also upright triangle.
Maslows diagram of human needs also upright triangle.

U must be right.

[irisng]

I have seen some parents willingly do all the abv u mentioned just so they can have the joy of grandchildren.

I agree on your point, my mother-in-law is one of them too:ashamed1: , but shouldn't the married children also have to do their parts, cannot expect their parents to pay and do everything for them. Like the one I mentioned earlier, it looks to me that they are making use of the chance to make money for themselves instead of really sincerely want to stay with their parents. I think at least should give the parents some allowance for them to support the household expenses unless you really can't afford it but more or little, it is the heart that counts and I'm sure the parents won't mind at all.

[irisng]

In 2042, do you think the value will remain at this price? Mm Lee was talking about preserving wealth with the hdb flat. My question is how does the hdb dweller preserve wealth when asset prices will eventually come down from its current mark one day. A toa payoh 5rm flat with 60yr left may sell at $750k now, but what happens if it had only 30yr left? I will probably still be around to see that day coz I am only in my thirties.

Maybe by then it will be enbloc.

[richwang]

One of the clearly stated role for MAS is to keep SGD exchange rate stable.
For that, MAS uses policies as well as open market operations.

HDB Board should have a clearly stated role to keep HDB flats' prices stable.
And they need to introduce open market operations:
One day, when HDB flats' price crashes, they will buy from open market.
And when COV gets out of their hinted range, they will sell more completed flats directly to the open market.

Of course, that means they need to have "flats reserves" just like MAS has forex reserves.
MBT often cites the "problem" of unsold HDB after 1998/2000 financial/dotcom crisis.
But HDB Board should indeed be very proud about that!
That reserve had kept Singaporean happiness index high,
and smoothed the private property prices (far less negative equity property owners in Singapore), and benefited the nation's economy.

I know that because I was happily staying in my Singapore HDB while my brother was suffering in his Hong Kong private property (negative equity) during that time.

Thanks,
Richard

[rattydrama]

it has been mentioned a few times that it is a ponzi scheme.
you required ever greater numbers of migrants to support the scheme.

haha buy FH buy buy buy!! It will nvr take away from you.

[richwang]

Just to clarify:

Although fully paid up HDB is not accepted by banks as collateral, it is accepted by Government as an asset pledge/evidence.

For example, if your child gets an overseas scholarship from Government and one of the sureties is not working, he/she can use FULLY paid up HDB Duplicate Lease to show he/she has the financial means to be a surety.

Thanks,
Richard

[phantom_opera]

Hdb is the only pro middle class policy, first lift upgrade then nrp which repaint, redo staircase, brand new rubbish chutes, fitness facilities etc, all FOC, almost

[teddybear]

HDB flats is an asset as long as govt allow the resale HDB price to rise.
HDB flats become a huge liability for most singapore citizens if HDB property prices become stagnant or even falls!


Hdb is the only pro middle class policy, first lift upgrade then nrp which repaint, redo staircase, brand new rubbish chutes, fitness facilities etc, all FOC, almost

[Allthepies]

HDB flats is an asset as long as govt allow the resale HDB price to rise.
HDB flats become a huge liability for most singapore citizens if HDB property prices become stagnant or even falls!

Hdb is an asset as long as it can be rented out.

[ysyap]

Hdb is the only pro middle class policy, first lift upgrade then nrp which repaint, redo staircase, brand new rubbish chutes, fitness facilities etc, all FOC, almostYup... almost. Lift upgrading has never been, unfortunately... :(

[Arcachon]

One of the clearly stated role for MAS is to keep SGD exchange rate stable.
For that, MAS uses policies as well as open market operations.

HDB Board should have a clearly stated role to keep HDB flats' prices stable.
And they need to introduce open market operations:
One day, when HDB flats' price crashes, they will buy from open market.
And when COV gets out of their hinted range, they will sell more completed flats directly to the open market.

Of course, that means they need to have "flats reserves" just like MAS has forex reserves.
MBT often cites the "problem" of unsold HDB after 1998/2000 financial/dotcom crisis.
But HDB Board should indeed be very proud about that!
That reserve had kept Singaporean happiness index high,
and smoothed the private property prices (far less negative equity property owners in Singapore), and benefited the nation's economy.

I know that because I was happily staying in my Singapore HDB while my brother was suffering in his Hong Kong private property (negative equity) during that time.

Thanks,
Richard

HDB Board should have a clearly stated role to keep HDB flats' prices stable.

Already stated, "The valuations are carried out by HDB's panel of valuers who are professionally qualified and licensed by the Inland Revenue Authority of Singapore (IRAS)." The panel need to apply to HDB yearly to renew, valuation need HDB approval.

And they need to introduce open market operations:

The market is open but the valuation is control.

One day, when HDB flats' price crashes

HDB flats' did crashes with 31k unsold. All they need is stop building and wait for Singaporean to cry father cry mother.

"The property market has a history of repeating itself. I guess that is why they call it the property cycle. There is a huge clamour for flats today, and we can’t seem to build flats fast enough to satisfy demand. Yet, when I became Minister for National Development in 1999, one of my first challenges was to deal with an overhang of more than 31,000 unsold flats. "
http://www.mnd.gov.sg/reflections_housing/article3.htm

[Jonathan0503]

Hdb is an asset as long as it can be rented out.

As long as it can provide a roof for people to reside, it's considered an asset. Don't need to be rented out

[Arcachon]

As long as it can provide a roof for people to reside, it's considered an asset. Don't need to be rented out

The Late Dennis Ng use to quote the above sentence.

[kane]

HDB flats is an asset as long as govt allow the resale HDB price to rise.
HDB flats become a huge liability for most singapore citizens if HDB property prices become stagnant or even falls!

i've another condition, nevermind the fluctuation in the principal value, as long as there's SERS, HDB is an asset.

[seletar]

It's a good thing that the first property I bought is a new flat directly from HDB, back then it was so affordable that me and wife did not even need to take a loan to buy it, we paid in full with our CPF. And the flat location is good as it is next door to an underground MRT station (1 minute walk). The flat is easitly worth over 3 times what we paid for it. But I cannot bear to sell or rent it for sentimental reasons, instead I use it as a second home so that my kids experience HDB living.

Of my properties, the HDB is the most value for money and an asset. But for the younger generation who are faced with higher new flat prices and even higher resale flat prices, HDB may not be as much of an asset other than a roof over their heads.

[Allthepies]

As long as it can provide a roof for people to reside, it's considered an asset. Don't need to be rented out
financially it is still a liability

[DC33_2008]

It is quite a hefty opportunity cost. Otherwise, you will have at least $2000 monthly income.
It's a good thing that the first property I bought is a new flat directly from HDB, back then it was so affordable that me and wife did not even need to take a loan to buy it, we paid in full with our CPF. And the flat location is good as it is next door to an underground MRT station (1 minute walk). The flat is easitly worth over 3 times what we paid for it. But I cannot bear to sell or rent it for sentimental reasons, instead I use it as a second home so that my kids experience HDB living.

Of my properties, the HDB is the most value for money and an asset. But for the younger generation who are faced with higher new flat prices and even higher resale flat prices, HDB may not be as much of an asset other than a roof over their heads.

[Jonathan0503]

financially it is still a liability

Why would it be a liability if it's fully paid?

Also, even if the flat is bought through a loan, as long as the loan amount is lower than the value (should be the case, else which bank or financial institution will lend you?), it is still an asset

[Allthepies]

Why would it be a liability if it's fully paid?

Also, even if the flat is bought through a loan, as long as the loan amount is lower than the value (should be the case, else which bank or financial institution will lend you?), it is still an asset

Never treat ur home as an asset ;)

[teddybear]

In current economic scenario, only physical home is an asset! Paper money and bonds will get hit with massive depreciation going forward with more QEs (aka paper money printing) coming our way from China, US, Europe and even Japan!


Never treat ur home as an asset ;)

[Allthepies]

In current economic scenario, only physical home is an asset! Paper money and bonds will get hit with massive depreciation going forward with more QEs (aka paper money printing) coming our way from China, US, Europe and even Japan!

As in usually only investment property is considered an asset. Our roof is classified under liability :D :D :D

[teddybear]

Not true. Our roof is also an asset as long as when we sleep in them, they are rising in value every year.
Sooner or later you think you don't need say a 3BR unit and willing to downgrade to small studio after all your children don't live with you anymore, you can still take out extra cash from your existing roof for a comfortable retirement due to appreciating value.


As in usually only investment property is considered an asset. Our roof is classified under liability :D :D :D

[kane]

If the rental rate is higher than the cost of ownership. Should it still be regarded as a liability becausethe alternative to self ownership is even more costly.

[Jonathan0503]

Never treat ur home as an asset ;)

Maybe you might want to check under accounting/financial term, the definition of Asset.

Simplify put, it is something that has future economic value. Economic value can even be intangible or non-quantifiable.

So even if the flat is not tenanted, the owner is still able to derive value out of it because it is providing you with a place to stay.

Think of it as if you don't have this flat, you will need to pay a rent to have a place to reside. So you need to folk out cash

[Jonathan0503]

If the rental rate is higher than the cost of ownership. Should it still be regarded as a liability becausethe alternative to self ownership is even more costly.

Ok, assuming you have a 5-rm hdb costing $500k and taking a worst case scenario where you take 100% loan (not possible but let's just assume u can).

At current interest rate of say 1.5%, annual interest will be $7,500 or $625 per month. How much can u rent out a 5-rm hdb now?

Based on this same example, if say rental for a 5rm flat is around $3k per month, you will need interest rate to be > 7.2% before it becomes a negative return. But what do you think will be the value of this flat and the rental when interest rate is at 7.2%?