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Thread: 999 vs Freehold

  1. #1
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    Default 999 vs Freehold

    I know we have dealt with this before ..

    but does anyone know whats the real difference between them ?

    I have been told, that with 999 LH , the govt can at anytime buy back part of the land. But doesnt the govt have the right to also buy back land thats FH as well ?

    assuming 999 yr lease hold land starts its lease from the 1800's ..the oldest 999 yr land would still have 800 ish years left .. correct ? where are these land ?

  2. #2
    xebay11 is offline New Launch Project Specialist
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    Quote Originally Posted by proud owner
    I know we have dealt with this before ..

    but does anyone know whats the real difference between them ?

    I have been told, that with 999 LH , the govt can at anytime buy back part of the land. But doesnt the govt have the right to also buy back land thats FH as well ?

    assuming 999 yr lease hold land starts its lease from the 1800's ..the oldest 999 yr land would still have 800 ish years left .. correct ? where are these land ?
    Govt can take back any land through land acquisition act.

    Old 999 LH land can be found everywhere. Must see the title deed.

  3. #3
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    interesting topic....

    i am also trying to find out the difference...

    anyone "in the know" care to enlighten?

  4. #4
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    I'm not "in the know" but here's what I think.

    xebay11 is right that Govt can take back any land that it needs through the land acquisition act.

    To me, practically, L999 and FH lands are pretty similar, because all L999 lands have many hundreds of yrs left in the lease. If there are 2 devlopments side by side, one L999 and other is FH, ceteris paribus, I will at most pay maybe, up to 5% more for the FH, perhaps, for the perceived "prestige" of telling others it's FH.

    Of course, if it's L99, then it's a different ball game. For one, if I'm not wrong, when there's less than 60 yrs left in the lease, you can't use your CPF to purchase. I think banks probably will also be more cautious in lending to old L99 properties. The depreciating value of the L99 land is also very significant.

    Perhaps, the only possible difference between L999 and FH is that in an enbloc situation, the original land-owner (ie. the one that grants the lease) may have a say over whether the remaining lease of the land can be transferred to another developer. If the original land-owner is the Govt, then I don't think it's normally an issue, unless the Govt has some alternate plan for the site some 800 yrs down the road. If the land-owner is a private party, it may throw a spanner in the works.

    Please correct me if i'm wrong.

  5. #5
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    Quote Originally Posted by eleong
    I'm not "in the know" but here's what I think.

    xebay11 is right that Govt can take back any land that it needs through the land acquisition act.

    To me, practically, L999 and FH lands are pretty similar, because all L999 lands have many hundreds of yrs left in the lease. If there are 2 devlopments side by side, one L999 and other is FH, ceteris paribus, I will at most pay maybe, up to 5% more for the FH, perhaps, for the perceived "prestige" of telling others it's FH.

    Of course, if it's L99, then it's a different ball game. For one, if I'm not wrong, when there's less than 60 yrs left in the lease, you can't use your CPF to purchase. I think banks probably will also be more cautious in lending to old L99 properties. The depreciating value of the L99 land is also very significant.

    Perhaps, the only possible difference between L999 and FH is that in an enbloc situation, the original land-owner (ie. the one that grants the lease) may have a say over whether the remaining lease of the land can be transferred to another developer. If the original land-owner is the Govt, then I don't think it's normally an issue, unless the Govt has some alternate plan for the site some 800 yrs down the road. If the land-owner is a private party, it may throw a spanner in the works.

    Please correct me if i'm wrong.
    Thanks for your comments... definitely helpful.

    But just a few more questions:-

    1) Even if it is Freehold, Govt can take it back thru land acquisition act anytime they want / need also. That seems to put FH and L999 on par.

    2) As far as I know, as long as the head lease is given, even if the owner wants to restrict any action on the land, they may not be able to do it. Unless the head lease belongs to the Government. And even then, they cannot suka suka restrict, it has to fall under some acts. I might be wrong on this. I am guessing, i am not sure...

  6. #6
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    Yes, the Govt can take back any land that it deems necessary, but I'm sure it's governed by some strict requirements before the land can be taken back. And landowners will be compensated market value for their properties. The last prominent case I remember is the building at the corner of Sims Ave and Paya Lebar road that has to be acquired for the CCL construction, because it wasn't safe to just tunnel under it. There was some hooha about the compensation amount from the unit owners initially but eventually, they seemed satisfied.

    These acquisitions are really quite rare, and will only be done when absolutely necessary, so I don't think we need to be unduely worried. Perhaps, we can exercise some caution when looking at certain properties, eg. if there are plans for future MRT lines running under it, or it's next to a narrow road that may be expanded in the near future and there's no space without land acquisition etc.

    Your questions prompted me to do some research. What I've said above is out-dated by a few years (maybe it shows my age). There's now no distinction in enblocs between so-called "privately issued" or "Govt-issued" L999 since about 4 yrs back. See article below:-

    Published January 26, 2006

    Hoi Hup bags Kim Yam Mansion in $63m collective sale

    By KALPANA RASHIWALA

    PROPERTY developer Hoi Hup, part of Straits Construction Group, is understood to have bagged the 877-year leasehold Kim Yam Mansion, off River Valley Road, for about $63 million through a collective sale.

    .........

    Kim Yam Mansion is the first collective sale to benefit from a new law that took effect last month, facilitating en bloc sales of estates where the original landowner/developer retains the freehold title despite giving flat owners leases ranging from 850 to just under 999 years.

    In such estates, strata titles were not issued under an old law, so the developer issued long leases instead. In the past, some of these landowners demanded hefty payments - amounting to millions of dollars - before they would consent to an en bloc sale.

    This ate into proceeds for the flat owners, sometimes effectively blocking an en bloc deal.

    Jones Lang LaSalle, Kim Yam's marketing agent, worked with real estate lawyer S K Phang to highlight the anomaly in the law to the authorities.

    This was fixed through an amendment to the Land Titles (Strata) Act that took effect on Dec 1, under which such landowners lose all rights to the land upon an en bloc sale.

    The Singapore Land Authority has said that in all, 24 sites will be affected by the rule change - but did not identify them to protect the privacy of the present unit owners.
    Anyway, there are only 24 such sites. So I think no issue for any L999 enblocs to go through, because no lease extensions required due to many hundred yrs left. But for L99 sites, lease extension will largely depend on whether the Govt has alternate plans for the site after the lease is over.

    For the L99 CPF restriction thingee, since 4 yrs back, it has been relaxed a little. CPF can now be used for properties with leases between 30 to 59yrs, but in smaller %s, depending on owner's age and remaining lease. You can check on the CPF website.

    Sorry for being so long-winded.

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