Sometimes, a marriage doesn’t always last forever. If a marriage faces an unavoidable end, the division of property upon divorce can be a very confusing and daunting process.
Division of Property in a Singapore Divorce
When discussing the division of property in a Singapore divorce, we must first clarify that Singapore does not have the concept of community property, and the at-fault party in a divorce case will not necessarily receive a smaller share of the assets as a result.
In Singapore, the division of property upon divorce is based on the concept of Matrimonial Assets. Marriage does not automatically mean that each spouse’s pre-marital assets become joint property. Instead, all matrimonial assets are subject to redistribution upon divorce. Please note: these assets will be divided, but this does not necessarily mean a 50/50 split.
Table of Contents
What are Matrimonial Assets?
According to Singapore’s Women’s Charter, matrimonial assets include:
- Assets acquired by one or both parties during the marriage
- Assets used by one or both parties or their children for various purposes
- Assets acquired before the marriage that have significantly appreciated in value during the marriage
It is worth noting that assets not defined as matrimonial property include:
- Assets received as gifts or inheritance
- Assets received as gifts or inheritance that have not significantly appreciated in value during the marriage
Therefore, we can understand that savings, the couple’s CPF balances, the family car, stocks, insurance policies, businesses, and jewelry can all potentially be considered matrimonial assets. The matrimonial home (the residence where the couple and their children lived together during the marriage) is often the largest part of this.
If the matrimonial home was purchased by one party with a loan before the marriage, but the loan payments continued after marriage, then the house is considered a matrimonial asset. Even if one party fully paid for the house before the marriage, if it was used as the couple’s residence, it also qualifies as a matrimonial asset.
How are Matrimonial Assets Divided?
As mentioned, matrimonial assets are subject to division, but this does not mean an equal split. The judge will consider the extent of each party’s contributions to the matrimonial assets when making a division.
The extent of contributions to matrimonial assets primarily includes the following aspects:
- The amount of financial contribution by each spouse: Financial contributions made by both parties to acquire, maintain, and enhance the assets.
- The amount of non-financial contribution made to the welfare of the family: This includes managing the household, and caring for any elderly persons or family members. The support provided by one spouse to enable the other to pursue his/her career.
- Outstanding debts: Debts incurred by the debtor for the joint benefit of both parties, their individual benefit, or the benefit of their children.
- The needs of the children: The care and control provided by both parents to the children.
- Any terms regarding asset distribution in a prenuptial agreement.
- The length of the marriage and the standard of living enjoyed by the family before the divorce.
- Financial independence after divorce: The court will consider the age, physical and mental capacity, earning capacity, and educational qualifications of both spouses.
- The financial needs of both spouses after the divorce.
When it comes to real estate, the judge will consider who made the down payment and who paid the mortgage (financial contributions). If the husband covered the down payment and mortgage, but the wife covered daily expenses, her financial contributions must also be considered. For a homemaker with no income, managing the household and raising children are also considered contributions to the family.
However, generally for marriages not exceeding ten years, family contributions are often not a major consideration. Instead, the property division tends to follow the principle of “division according to income.” Alimony is not commonly applied in practice. Ultimately, Singapore encourages women to be independent and to work, which may not be as favorable for homemakers as one might think.
Division of Matrimonial Property
At the time of divorce, to clearly divide the property, people often choose to sell the house or transfer it to one spouse. Besides the financial division, the situation becomes more complex when the matrimonial home is an HDB flat. The Minimum Occupation Period (MOP) for an HDB flat purchased from the Housing & Development Board is five years. If the MOP has not been met, the couple may be required to surrender the flat to the HDB at the prevailing compensation price, which would be the most unfavorable outcome. If the court orders the sale of the HDB flat, it will also decide on the division of the sales proceeds based on the contribution standards for matrimonial assets mentioned above. If the court considers transferring ownership to one of the spouses, that spouse must be eligible to own an HDB flat.
Singapore’s “decoupling” policy is applicable for the purpose of transferring property ownership.
A few years ago, the Singapore government introduced cooling measures, imposing an Additional Buyer’s Stamp Duty (ABSD) on private residential property buyers. Many joint owners of private homes have tried to have one party completely “decouple” from the property ownership, so they do not have to pay ABSD when buying a second property later. This practice can likely lead to property disputes if the couple unfortunately separates or divorces. After decoupling, one of the spouses who originally held the property under Joint Tenancy (each owning 50% of the property) becomes the sole owner. The spouse who sold their share of the property no longer has any legal share in it. If they unfortunately divorce, the selling party would need to provide evidence to prove that he/she is indeed entitled to a portion of the property’s equity.
Frequently Asked Questions about Singapore’s Matrimonial Assets
Q: After a divorce, how will the matrimonial home be divided?
A: If the matrimonial home (private property or HDB flat) is part of the matrimonial assets, the court must divide it fairly between the parties.
Q: Is an inherited house considered a matrimonial asset in Singapore?
A: No. The court excludes inherited or gifted assets from the division of assets.
Q: Can the wife get half of the assets in a divorce?
A: No. Neither spouse will automatically receive a 50% share of the matrimonial assets. The court will use a structured approach based on direct/indirect financial/non-financial contributions to divide the assets.
Q: What assets cannot be divided during a divorce?
A: The court excludes the following from the division of matrimonial assets:
- Gifts and inheritance
- Pre-marital assets
- Pre-nuptial or post-nuptial agreements
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