This is a common issue raised, especially between co-owners of a property (real estate). An owner wishes to transfer his share (undivided half share or a % share) in the property without any consideration to his co-owner(s) and/or third parties (eg. his wife or his mother).
Usually there are 2 scenario, namely:-
(A) Property is subject to a Mortgage and/or CPF Board Charge
(B) Property is free from encumbrances (no Mortgage or Charge)
Please read our FAQ in respect of gift of property under this section to understand the implications of gifts (not exhaustive).
We shall now examine the 2 scenario.
A. Property is subject to a Mortgage and/or CPF Board Charge #
If your property is encumbered by a Mortgage (eg. mortgage loan from a Bank) and/or CPF Board Charge, then you should always check with the Bank or CPF Board before attempting to enter into a Deed of Gift of your share in the property.
In many cases, the Mortgagee (eg. Bank) is unlikely to accede to your request to transfer your share by way of gift due to the implications as discussed in the section.
Further, even in the unlikely event that the Mortgagee is agreeable, if you are no longer an owner in the property after the transfer, your Transferee(s) will need to procure the discharge of the existing Mortgage and a fresh Mortgage will need to be registered, and legal costs and expense will be incurred.
In order to avoid to need of obtaining consent from your Mortgagee, if you have the means, you may wish to repay the Mortgage loan and discharge the existing Mortgage, and then transfer your share in the property by way of gift under scenario (B) below.
B. Property is free from encumbrances (no Mortgage or Charge) #
Before attempting to transfer your share in a property by gift, please consider all implications relating to gifts.
Having considered all implications of gift of property, if you still wish to proceed, you should engage a law firm of your choice.
Generally, under scenario (B), the following may need to be done (not exhaustive or comprehensive):-
1. Deed of Gift to be entered between the Transferor and the Tranferee
2. Stamping (ad valorem) of the Deed of Gift based on the market value of that share of the property to be given. Parties are advised to obtain a valuation report on the market value of the property, so as not to under-declare the market value to the Commissioner of Stamp Duties (IRAS). Penalty may be payable for under-declaration of market value.
3. Transfer instrument to be prepared and filed at the Singapore Land Authority with the relevant title document.
4. Notice of Transfer to be lodged with the Comptroller of Property Tax, MCST (if any) and Tenant (if any).
Legal costs and expense will be incurred for the above process.
Caution: This article does not provide legal opinion, and reader should read with caution and not rely on the same. You should consult your lawyer if you have any specific legal issue.