Decoupling timeline – a step by step breakdown

Decoupling timeline

Table of Contents

This article serves as an add-on to our comprehensive guide for decoupling. Given that you have ventured this far into the rabbit hole meant that you are ready to take the next leap to decouple your current property.

As a deeper dive, there are several topics with regards to decoupling that are worth elaborating on. One being the cost of decoupling and another noteworthy consideration would be the timelines with regards to decoupling.

In this article, we will specifically elaborate on the timeline component. Providing a detailed breakdown of all the key timelines that are important to you.

Why should you be aware of the timeline for decoupling

It is understandable that most of you will be relying on your property agent to guide you along this process. But from a planning perspective, it will be important for you to look ahead and be mindful of key milestones in decoupling and when it will take place.

Some common timeline related concerns that you would face includes

  • Knowing at what point in the decoupling process, can you make the second property purchase
  • Knowing when you would need to have the necessary cash ready to purchase over your spouse share
  • Being aware of when CPF will be reimbursed into your account, so that you can use it to fund the second property

A mis-timing of these key milestones could result in a hampering of the decoupling process or at worst case, adding additional cost to the process.

A quick rehash on the decoupling process

As a quick refresher, the objective of decoupling is centred around freeing up one party’s name in a jointly owned property. The process entails a buy and sell transaction between spouses, in which one spouse purchases over the other party’s share in the property.

In short, the process is identical to a typical buy and sell transaction for a resale private property and so is the timeline.

How long will the decoupling process take ?

The decoupling process typically takes 10 to 12 weeks.

Can the outgoing owner purchase the second property, while decoupling is still in the process ?

Once the S&P document has been signed, the outgoing owner is now deemed to have entered a contract to sell her existing property and is free to purchase another property without incurring ABSD.

Need help managing your timeline for decoupling ?

Having concerns over when you should be decoupling and how soon can you purchase your second property without ABSD ?

We got your back, having assisted many numerous singaporean property owners with their decoupling process, we pride ourselves for helping property owner navigate the complexity of decoupling.

Drop us a text and we can provide you some second opinion to reassure you with regards to your plans on decoupling.

Timeline – step by step breakdown

Step 1- The planning stage

At this stage, you would be looking to firm up on the property agent that will be spearheading the decoupling process for you. It will be important to run through these considerations at the planning stage

Considerations with regards to decoupling

  • Generating a valuation for your existing property
  • Inventorising the amount cash and cpf you currently have
  • Identifying the cost of decoupling – stamp duties and decoupling lawyer fees
  • Calculating the amount of cash and cpf you would need to buy over your spouse’s share – head over to the decoupling calculator

Considerations with regards to second property purchase

  • Deciding on the budget for your second property purchase
  • Developing a general plan on what district and property type you would be considering for your second property.

Consideration with regards to mortgage for your existing property (Important)

  • Working with a mortgage banker to work through the restructuring of your existing mortgage for your current property beforehand.
  • Note: the loan will be taken up solely by the party that is going to be the sole owner of the property after decoupling.

Timeframe
Depending on how fast your agent works and how soon both you and your agent achieve consensus on this topics, this process should take around 1 to 2 weeks.

Step 2 – Firming up on conveyancing lawyers

With the plan in place, the next step would be to secure an experienced law firm that will execute the entire decoupling process on your behalf. To maintain the spirit of a true buy and sell process two independent law firms will be engaged. One represents the seller and the other represents the buyer.

Step 3 – Signing of S&P

Following that, the next step would be to arrange for an appointment at the law firm to sign the sales and purchase document.

Funds required
At this stage, you would need to get ready a cashier’s order for 5% of share value to be purchased from your spouse. Example if property is valued at $1.0 million, assuming the share value of your spouse to be purchased is 50%. You would need to prepare a cashier’s order for $25,000.

It would be advisable to ensure that the cashier’s order is drawn from your own personal account and not a joint account shared with your spouse. This is to depict an authentic flow of funds from you to your spouse. This will ensure no issues down the road with bank loan restructuring approvals and IRAS.

Step 4 – Making payment for stamp duties

Time frame
14 days after the signing of S&P document, you will be required to make payment for the following stamp duties. If you intend to pay for stamp duties using CPF, you would have to notify your conveyancing lawyer beforehand.

Stamp duties applicable to decoupling

  • Buyer stamp duty on share value to be purchased
  • Seller stamp duty, only applicable if existing property have not be held for more than 3 years
  • Additional buyer stamp duty, if the spouse buying over shares is not a Singaporean citizen

Step 5 – Awaiting completion of the decoupling process

Right after the S&P is signed at the law firm. Your conveyancing lawyer will make application to CPF and your bank to disburse funds required to purchase over your spouse share

This is the part whereby the earlier preparation in step 1, which involves making the necessary arrangement with your mortgage banker and banks to sort out loan restructuring options for the existing property comes into play.

Time frame
It will take 10 to 12 weeks for this step to be completed

Step 6 – Completion

Funds required
20% of share value to be purchased via cash or CPF

As we approach completion. We will need to make payment for the remaining 20% of the down payment for the purchase of your spouse’s share. For the cash component, similar to what was mentioned above. It will need to be made via a cashier’s order drawn from your personal bank account.

Step 7 – Awaiting the refund of CPF

This is a step that is often overlooked as we rush into purchasing our second property.

Time frame
It will take 3 to 4 weeks for your spouse CPF to flow back into his or her account. After that your spouse is free to use CPF to fund the second property purchase.

What can be done if CPF is not reimbursed on time for purchase ?

Under the situation whereby you need to purchase the second property before CPF flows back into your spouse account. A bridging loan can be taken to cover for the shortfall in funds.

But do note that bridging loan interest rates are normally higher than usual mortgage interest rates. Depending on the loan package that is being offered, interest rates range from 5% to 6%.

More reads, more gains ?

Kudos on making it this far. The fact that you have invested the last 5 mins reading this article. We believe you are a like minded real estate investor looking to beat the rat race by getting more out of your real estate investment.

If so, do check out the following articles.

Author

  • Jue Wen

    Jue Wen is the content marketing lead. This means he spend his waking hours researching and writing all things real estate. He believes life is a hustle and there is no joy in grinding away daily in our little rat races. He believes making wise moves in real estate investment can be a game changer. Aside from writing all things real estate, you can find him in your nearest bouldering gym.

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Jue Wen

Author

Jue Wen is the property analyst and content marketing lead at decoupling expertise.
He specialises in helping clients overcome the complexities involved in owning their second private property in Singapore.
He had over 10 years of experience in real estate investing and have written over 40 detail guides on decoupling and minimising ABSD. He is a licensed real estate consultant and holds a Bachelor degree in Business Management from the Nanyang Technological University.

Kenji

Co-Author

Kenji is the Group Division Director of ERA Realty Network.
He have got over 20 years of experience in real estate and have successfully helped over 50 couples purchased their second property. He specialises in helping client achieve the best approach towards acquiring their ideal investment properties while minimising ABSD.