Due to increasing residential demand, the government keeps looking for land for housing development purposes while re-selling surplus HOS flats, which ceased launching in 2003. With the interim scheme allowing eligible White Form applicants to buy second-hand HOS flats without paying a premium, the second-hand HOS market has been buoyant since the first quarter of the year. If you are lucky to be one of the eligible applicants, here are some basics that you should know about buying these subsidized flats.
Second-hand HOS flats can be sold either in open market or secondary market. Selling flats in the open market is just the same as selling any private flat, except that the owner has to pay a premium to the Housing Authority for removal of the alienation restrictions in advance. Before buying a second-hand HOS flat in the open market, make sure the owner has paid a premium within 28 days after signing the provisional agreement for purchase and sale.
(2) HOS secondary market
If a HOS flat is sold in the secondary market, it can only be sold to eligible buyers, including public rental housing tenants, residents in interim housing blocks, holders of green form certificates and white form applicants buying second-hand HOS flats without paying a premium. Eligible buyers also need to apply for the Certificate for Eligibility to Purchase (CEP) and Letter of Nomination (LN) from the Housing Authority, and sign the provisional agreement for purchase and sale within six months.
(3) Premium calculation
Premium = Current Market Value × (Original Market Value–Purchase Price) ÷ Original Market Value × 100%
(4) Income and asset limits
HOS flats are good for its affordable price and efficient usable floor area ratio. However, there are income and asset limits and other arrangements to comply with. Using the case of white form applicants to buy second-hand HOS flats as an example, according to the Housing Authority, the income limit for family applicants will be $40,000 per month and the asset limit will be $830,000, whereas the limit for one-person applicants will be $20,000 per month for income limit and $415,000 for asset limit.