{"id":18082,"date":"2022-11-15T07:00:43","date_gmt":"2022-11-14T23:00:43","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=18082"},"modified":"2023-01-25T14:46:06","modified_gmt":"2023-01-25T06:46:06","slug":"dual-key-condo-units-property","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/dual-key-condo-units-property\/","title":{"rendered":"Dual-key condo: Analysing the pros and cons"},"content":{"rendered":"
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Dual-key condo units first hit the market with the launch of Caspian<\/a> by Frasers Centrepoint Homes back in 2009<\/a>. Since then, developers have caught on, launching numerous projects across Singapore that feature dual-key units. Some new launch condo projects<\/a> featuring dual-key units include Enchante<\/a>, Parc Clematis <\/a>and Piccadilly Grand<\/a>.<\/p>\n

With dual-key units, owners essentially have two self-contained living spaces that share a single foyer and address.<\/strong> The larger unit in a dual-key configuration serves as the main unit, and the smaller unit — commonly a studio<\/a> — serves as a sub-unit. A dual-key unit is typically 3 to 5% bigger — in terms of floor area — than a regular condo unit with the same number of bedrooms.<\/p>\n

As you can imagine, dual-key condo units are designed to target certain groups of property buyers. Firstly, dual-key units appeal to multi-generation families who want to live under the same roof, but at the same time maintain their own privacy (i.e. elderly parents live in the sub-unit).<\/p>\n

Secondly, these homes are popular with prospective property investors or couples looking to rent out part of their property, but because of affordability constraints, do not have the means to buy a second property.<\/p>\n

Let’s look at the pros and cons of dual-key condo units.<\/p>\n

Advantages of dual-key condo units\u00a0<\/b><\/h2>\n

No ABSD payable<\/strong><\/h3>\n

While dual-key condo units are essentially two apartments side-by-side, these are legally a single property. As such, buyers don’t incur any Additional Buyer\u2019s Stamp Duty (ABSD)<\/a> for the “additional” sub-unit.<\/p>\n

\"Dual-key
An example layout of a dual-key condo unit in Singapore.<\/figcaption><\/figure>\n

With the Singapore government implementing a hefty increase in ABSD in December 2021, buying a dual-key unit makes more sense to first-time homebuyers (with an eye on property investment) and buyers of second and subsequent properties. Buying a dual-key unit lets the buyer “sidestep” the ABSD levied on an additional property, which is as high as 17% for Singapore Citizens buying a second home (25% for Permanent Residents), and 30% for foreigners buying any residential property.<\/p>\n

Say you\u2019ve got a budget of S$2 million, and you\u2019re deciding between purchasing two condo units — a S$1.2 million two-bedroom unit for your own stay and a S$800k unit to rent out — and a dual-key unit.<\/p>\n

Assuming you don’t own any other property, you\u2019ll have to fork out 17% in ABSD on the second property bought if you go with the former option, which works out to a significant S$136,000. For a dual-key apartment, no ABSD is payable if it’s the first property you’re buying.<\/p>\n

Renting out without sacrificing privacy<\/strong><\/h3>\n

With dual-key units, you get to stay in AND rent out a single property without compromising too much on privacy. As opposed to renting out a room in a regular condo unit, you tenants will be utilising separate keys, living spaces, toilets and kitchen amenities.<\/p>\n

As a landlord, you and your family members rarely have to rub shoulders with your tenants. So you don’t have to be mindful of them (you’re free to walk around in your nightgown) and can have as much personal space as you need.<\/p>\n

Higher rental yield (compared to standalone studio units)<\/strong><\/h3>\n

Renting out a sub-unit instead of a room in your unit not only affords you greater privacy. We also observe that a sub-unit can potentially fetch a higher psf rental price than renting out a standalone studio unit (i.e. not part of a dual-key unit).<\/p>\n

For illustration purposes, let’s look at Riverbank @ Fernvale<\/a>, which offers dual-key condo units.<\/p>\n

Currently, there’s a rental listing for a studio<\/a> of a dual-key condo unit in the development.<\/p>\n

\"Studio<\/a>
A studio of a dual-key unit at Riverbank @ Fernvale for rent.<\/figcaption><\/figure>\n