When I first started writing about LGBTQ+ property issues, a lot of people asked me what’s so different about the queer community and their property purchase? Isn’t a property purchase the same for all? You simply choose to buy a private or HDB, depending on your available budget and needs. When purchasing a flat from HDB, most people will just opt for the Singapore Single Citizen or Joint Singles Scheme as the default queer options. So yes, on a surface level, they do seem to be the go-to choice for many LGBTQ+ Singaporeans.
My previous 2 articles are meant to provide a basic guide for singles and couples looking to purchase properties in Singapore, from a LGBTQ+ perspective. But choosing what to buy is only the first step. The thought and planning that follow are what sets us on a different path from our heterosexual friends. This is especially so for queer couples trying to buy a home together in a country like Singapore that ignores LGBTQ+ rights.
In my work servicing many LGBTQ+ clients, many of them plan their property purchases within the capacity of a single person, and their options are also limited by their singular income and budget. Those who are in a committed relationship might consider buying something together. However, in the absence of legalized gay marriage, many avoid mixing their finances and investments.
In an expensive city state like Singapore, property is incredibly expensive. We are ranked the 2nd most expensive housing market in the world (Source: CBRE). Most who do well in their property investments leverage on dual income (straight couples) and strategically plan their entry and exit – buying BTO flats, maximising HDB grants, decoupling and upgrading to own multiple properties for own stay and investment. In fact, such information is easily available online for couples to pick up.
Unfortunately, I can’t say the same for gay couples. While some property concepts might be similar, there is a lack of literature or in depth look into LGBTQ+ couples planning to co-purchase a property together.
What form of Home Ownership should you opt for?
Should a queer couple decide to buy a home together, the amount of money that each party contributes to the home may not be equal. Although it might be a private understanding between both parties, do note that this is entirely separate from how one legally owns the home. So it is very important at the onset to decide on the manner of holding of your property- Joint Tenancy, Tenancy in Common, or Sole Ownership. Any changes after the property is registered with the Singapore Land Authority capturing the respective manner of holding will incur additional legal charges and may be tantamount to a sale and purchase, thereby attracting stamp duties .
In a Joint Tenancy, both parties hold an equal interest in the whole property. This means any legal decision regarding the property (e.g. to sell the property) must be made jointly.
A distinct feature of a Joint Tenancy is the Rule of Survivorship. This means that if (touch wood!) one party passes away, the deceased’s ownership of the property is automatically transferred to the surviving co-owner, regardless of whether they have left a will.
This may sound all good, but no one can guarantee a happily ever after. When a married couple splits their property in a divorce, the court will look at both financial and non-financial contributions of each party before coming to a verdict. If in the case of a LGBTQ+ couple going to court to divide their property, they’ll be treated as two private individuals rather than related parties or a family unit. This means non-financial contributions might not be taken into consideration. It will also be hard to kick a party out against their will – this makes it much harder to split up if one party wants out but the other doesn’t, because both are tied to the huge asset.
A Tenancy-In-Common means both parties have a distinct, separate share in the property. This share could be equal or unequal.
So it can be split based on how much each person is contributing towards the apartment. It is also a chance to discuss as a couple how you intend to split the cost of up-keeping the property – bills, utilities, groceries etc. It’s not the most romantic thing to talk about, but trust me, it is a conversation that is needed in a committed long term relationship.
Maybe the share of the property doesn’t really matter when both are living in the property. But when the time comes to the disposal of the property, that’s where Tenancy-In-Common differs from Joint Tenancy.
For a start, the Rule of Survivorship in a Tenancy-in-Common does not apply. This means that each party is entitled to confer their share of the property to someone else or leave their share to someone other than the co-owner in a will.
At a glance, this might be a simple clean cut approach to split the property ownership, but it also presents a different set of problems (touch wood!) if one person passes away without a will. The share of the deceased person will be distributed under the laws of intestacy under the Intestate Succession Act (‘Act’) – a technical way of saying that the legal system decides how your estate is distributed. Without a legalised marriage, a LGBTQ+ ‘spouse’ would not fall under the Act. Thus, the surviving owner may then find that the deceased person’s relatives now own, say, 50% of the property together with him or her. Now, that could be a recipe for disaster if the relatives do not get along with the surviving owner. The relatives may also demand that the surviving owner sell the property and split the sale proceeds.
In the event of a sale of the property, the net sale proceeds after deduction of all redemption monies payable to your Mortgagee and CPF Board, shall then prima facie be split in accordance with your respective percentages of share ownership in the property.
Therefore, if a LGBTQ+ couple chooses a manner of holding being Tenancy-in-Common, it is of paramount importance that this decision be supplemented with a written will and LPA (Lasting Power of Attorney) by both parties to spell out how they intend to manage the property and distribute their remaining assets.
In certain situations, it might also be practical for only one person in the relationship to be the legally registered owner of the property.
For instance, if a same-sex couple is looking to buy a HDB flat, but only one partner is 35 years of age while the other has a long way to go. The older person will have to buy the HDB flat using the Singles Scheme – His partner has no legal say in anything to do with the home, which also means they technically don’t have legal rights to stay in the home, either. (They can be listed as a tenant, as if he rents a room from his partner.) You can ‘try’ to apply to HDB upon the younger party turning 35 to add his name as a co-owner under Joint Single Scheme, but cases like this are very rare and it will be subject to HDB approval on a case by case basis (providing valid reason why a switch is needed). A better way is to plan to sell off the existing flat after the 5-year Minimum Occupancy Period is met, and both buy another HDB or EC together under Joint Singles Scheme when the younger partner turns 35.
On the private property side, an informal trust (resulting trust) can arise if one partner makes contributions to the mortgage without obtaining legal title to the private property. However, to avoid uncertainty and potential disagreements, it is still recommended for the couple to approach a lawyer to draft a trust deed,, in the event that the couple in question intends for the party with no legal title to have some interest in the property.
If one partner is a SPR or foreigner, unlike a married heterosexual couples who can apply for remission of Additional Buyer Stamp Duty(ABSD), the LGBTQ+ couple cannot. Thus, depending on the profile and property count of the non-Singaporean partner, buying a property with him or her may attract ABSD of 5% (PRs – 1st property) or 20%(Foreigner)
Ready to marry your finances?
Whether queer or straight, deciding to combine financial capabilities as a couple to invest in property is a major step. As a LGBTQ+ couple it is even more important to equip yourselves with the right knowledge and take active steps to ensure you are both well taken care of in good and bad times.
Cohabitation Contract (Deed of Cohabitation)
Essentially, a cohabitation contract is a contract between people who are living together but are not married. It is essentially entered into as ‘prenuptial agreement’ between 2 unmarried persons. It is designed to deal with property issues in the event that parties separate, and contains terms governing matters such as the division of property and the management of day-to-day finances.
Because of this, it is important that both parties disclose what property they own. These properties need to be written down and made clear to the other party. In addition to property (cash, real estate, stocks, etc.), each person needs to indicate what debts or obligations they have as well. Essentially, each person needs to disclose their financial status, including all assets and debts. Once each party determines what they own or owe, they can determine who gets what in the event of a separation.
Cohabitation Agreements can also deal with property acquired after the cohabitation begins. Whether you decide to keep it as joint property, to assign the property to one person or divide it in any other manner, the point of a Cohabitation Agreement is what the status of the property is. If a separation occurs, each person will know what belongs to them and what belongs to the other person.
The main benefit of having a well-drafted cohabitation contract is that each party’s respective liabilities and entitlements can be clearly set out, and this would help avoid long-drawn disputes over such liabilities and entitlements in the event of a separation. However, the main disadvantage is the uncertainty as to whether cohabitation contracts will be enforced in Singapore due to the fact that such cases have yet to be considered before the courts.
Preparing your will and Lasting Power of Attorney (LPA)
Discussing one’s will and LPA is not a pleasant but an important topic, especially when a couple starts to live and share assets together.
A will is a document made by a person to specify how his or her assets are to be distributed after his or her passing. A LPA is a legal document that enables you to appoint one or more individuals to act and make decisions on your behalf should you lose your mental capacity.
As previously mentioned, having these 2 documents prepared helps a couple holding a property under Tenancy in Common, so that they are able to bypass the Intestate rule and define how they want their property to be assigned should they pass away or lose their mental capacity to make decisions for themselves. This is an important alternative to support a queer couple in the absense of a legal marriage.
A LGBTQ+ couple in a committed relationship should make it a point to discuss this topic with an estate planning lawyer as soon as they start to share a property.
Making your CPF nominations
Most people will tap into their CPF savings when making their property purpose. Making a nomination on CPF, will help to ensure that the allocations of OA savings and accrued interest to property is assigned to each other so that it will be covered should one pass away.
It is worthy to highlight that your CPF savings cannot form part of your assets for distribution in your will and you must make your nominations with CPF Board separately.
Term Insurance coverage: Getting yourself adequately insured for your property value
In respect of liabilities such as a mortgage loan, such liabilities shall be passed along to the beneficiaries of the Joint Tenancy and Tenancy in Common. Therefore in the event of demise of a co-owner and there is still a subsisting Mortgage over the property, and the surviving co-owner does not have the financial capability to repay or restructure the outstanding loan, the surviving co-owner may be faced with the predicament of having to sell the property in order to repay the bank loan.
For HDB flats, the Home Protection Scheme serves as a safety net to cover outstanding loans should an owner pass away.
Therefore, it is important to make sure that a sum insured equivalent to the outstanding loan value is taken for every private property purchase as well. This will ensure that your partner and loved ones will not be slapped with the burden of a remaining mortgage loan should they inherit a property.
Buying a property together is a big step in any relationship, a sign of commitment and in old Singapore tradition, a symbol of marriage. For a LGBTQ+ couple in Singapore, this could be the furthest they could go for now. So enjoy the process of building your home together and get in touch with a LGBTQ friendly realtor and lawyer who can better advise you on your options.
About the Author
William Tan is licensed realtor with a specialty in servicing the LGBTQ+ community. He started sharing his knowledge about property investment issues for LGBTQ+ on his website and has been featured in EdgeProp Singapore, Esquire magazine and The Financial Coconut podcast. He has helped many LGBTQ+ clients with their property portfolio – market to sell, buy and rent properties. He wants to educate and show the community how to achieve the dream of owning a home in Singapore as a queer person, and to excel and make wise property investments decisions with proper technical and legal knowledge. You can reach out to his on his website and follow his Facebook page and LGBTQ+ property group.
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