Thursday, August 23, 2018

HDB Lease

Why do HDB owners have to pay property tax when they are not the owners but only the lessee?

Answer - it is a condition of the lease. When a lease has a tenure of more than 6 years, it is usual for the landlord to specify that the lessee has to pay the property tax, in addition to the rent.

The landlord wants to collect the rent and be protected against future increase in property tax.

In the case of the HDB flat, the lessee has to pay an upfront premium, instead of a monthly rent, for the 99 year lease.

The HDB lease is not the same as a leasehold on a private property, because it has some conditions tied to the use and resale of the property. Apart from these special conditions, it is similar to ownership of a leasehold of private property.

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