RES exam question on Leasing of Private Property: Bubble Co Pte Ltd, a foreign-owned company, plans to lease an HDB shop unit in…
Bubble Co Pte Ltd, a foreign-owned company, plans to lease an HDB shop unit in a neighbourhood centre to run a bubble tea outlet. The shop's owner, who bought it from HDB, is GST-registered and asks his salesperson which rules apply to the letting. Which of the following statements is/are correct? (i) Since the Residential Property Act restricts foreign persons, Bubble Co needs approval before it may take the lease. (ii) Since the owner bought the shop from HDB, he needs to serve a five-year Minimum Occupation Period before subletting it. (iii) Since the unit is non-residential and the owner is GST-registered, he charges GST on the rent. (iv) The owner needs no prior HDB consent to let the sold shop, provided the tenant's trade involves no change of use.
- A(i), (iii) and (iv) only
- B(ii) and (iii) only
- C(ii), (iii) and (iv) only
- D(iii) and (iv) only
Show answer & explanation
Answer
D. (iii) and (iv) only
Explanation
Answer: (iii) and (iv) only. A shop is commercial property, so neither the foreign-ownership restriction nor the MOP applies, while GST and HDB's no-consent letting rule do.(iii) True. Rent on non-residential property is standard-rated where the landlord is GST-registered, at 9% from 1 January 2024.(iv) True. A sold HDB shop may be let, whole or in part, for a retail or service trade without HDB's prior consent, so long as no change of use is involved.Rule: Commercial property sits outside residential rules such as the foreign-ownership restriction and the MOP. A change of use of a sold HDB shop needs HDB's approval, and the trade must meet the relevant authorities' requirements.Source: Residential Property Act, /learn/foreign-ownership-residential-property-act; IRAS, GST guide for property owners; HDB, renting out an HDB shop: proposed subtenant's trade, read 1 October 2026
Why the other options are wrong
- (i) False. The Residential Property Act restricts foreign persons from acquiring restricted residential property, and a shop is outside it.
- (ii) False. The MOP is a condition on flats bought from HDB, not on its commercial units; this carries a flat rule across to a shop.
Study the concept behind this question: Commercial & Industrial Leasing (rent review, service charge, JTC)
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