There are a few steps to plan for Decoupling Transaction:
1.Restructuring of New Mortgage.
For a decoupling transaction with an existing loan, the existing mortgage agreement will be discontinued and the out-going party needs to apply for a NEW mortgage agreement (even the staying party or buyer would like to maintain the same mortgage amount).
If the staying party or the buyer have the financial capacity to fully pay up the mortgage, he/ she could opt to fully redeem the mortgage upon the transaction.
Here are the potential decoupling outcomes of restructuring of mortgage.
| FOUR Scenarios – Restructuring of decoupling | |
| No mortgage | No change in mortgage amount |
| Reduce the mortgage amount | Getting higher / maximum mortgage amount |
Please talk to our consultant for your decoupling transaction planning.
2. Who is staying and who is out-going?
There are three major scenarios for decoupling transaction:
a. The staying party to purchase the out-going party’s share.
b. A new party to purchase the out-going party’s share.
c. A staying party & the new party together to purchase the out-going party’s share.
3. Property Valuation
In Singapore, a decoupling transaction must be transacted with market value of the property.
For example, a condo unit worth $1.5mil co-owned by A & B with equal share. If B is the staying party and B is going to buy A’s share, between A & B, the transaction price of the share should be 50% of $1.5mil or $750k.
4. Basic Stamp Duty & Additional Buyer Stamp Duty
Decoupling is considered a buy-sell transaction, basic stamp duty and additional buyer stamp duty rules are applicable in the residential property scenario.
5. Legal Fee
As mentioned above, a decoupling transaction is a type of buy-sell transaction, there is a seller and there is a buyer. Both parties are required to engage their lawyer to do the conveyancing job.
We only work with a few law firms who have the experience in handling decoupling cases.
6. Not all banks could accept your application
Some banks reject decoupling mortgage applications. This tells us that decoupling transactions could lead to some negative implication if it is not well planned.
Please talk to our consultant for your decoupling plan.
RICHCO-SPACE Decoupling calculator will assist you to find out the
