Expat Package Proposal for US Exec

[Dert42]

We have applied for our son to go to SAIS. Sight unseen. I'm a bit worried about that, but it seems awesome and my boss toured it and said it was the best school she had toured as well.
If it's good enough for her, it's good enough for me.
The application/registration fees are shocking though.

[JR8]

Yes! We looked at one place that had a massive wrap around balcony but it was only 3 ft wIde so therefore unusable but it took about 400 square ft away. Our broker said a/c ledges count, the interior of a bay window and even 1/2 the thickness of an exterior wall. Crazy!! I had also failed to appreciate how many buildings have real livability issues given their proximity to construction...can't tell that from the pictures! Yes, caveat emptor.

re: the bolded.

With leasehold property there is the concept of what property is demised to you by the freeholder, what is within your demise: Read that loosely as, your ownership and your responsibility to maintain. That invariably includes the internal halves of exterior walls, and floors and ceilings.

This is where the break seems to be. In 'the West' we are used to seeing what could be called 'gross internal space', whereas perhaps spurred by the smoke and mirrors from developers, property ads in SG now appear to refer to something more akin to demised area. I mean if a developer tells you your new-build flat has ''''an area'''' of 1000ft+, I expect it's not so easy to accept that the habitable space is say 750ft or what ever.

[my3sons]

For anyone else curious, a few days before I left we got a tentative budget from a relocation company our company hired. Their budget was more generous than what we were thinking on almost every account which I find fascinating. The company hasn't approved it (funny that HR wanted my husband's feedback before the CEO), and part of me thinks that the total spend is so high that they'll say "forget it, we can run this business from the US" (as I've now learned, sending US citizens out is infinitely more expensive than employees from other countries for tax reasons...double income tax and all the allowances get taxed, so the company has to keep grossing up and grossing up..."). And all those allowances are high to begin with so the numbers get pretty absurd.

Thank you ivysmom for spawning the thread.

I had done some fairly exhaustive research before I found this thread and came up with fairly similar figures for most of the items. Still looking for good comparable data for Medical/Dental insurance (coming from US also) and the cost of the actual move/incidentals. Would you mind sharing an update on the final outcome?

[PrimroseHill]

SAIS, is part of COGNITA. My daughter went to a COGNITA school in London and when we arrived we had initially thought about letting her go to SAIS.

I saw both Reflections and Carribean. Whilst Reflections looks impressive from the outside, there are pillars inside which makes decorating impossible. Carribean, we looked at the penthouses, as we needed the square footages. Even though the penthouse has a total area of approx 3000square feet, 1200 square feet of that was the roof terrace.

We looked at One North, The Rochester, etc. Planter boxes, staircases, parking space, everything is counted as part of the square footage.

[ivysmom]

Hi old friends,

You were so helpful to me when we almost moved to SG a few years ago so thought I might take advantage of your generosity again! Well...SG is resurfacing as a possibility for our family of 5 (how come this always comes up right after the prime school admission season???). I know the rental market and economy generally has softened a lot. Is the same true (or more/less true) for the higher end condo market? And I would imagine it's easier to negotiate nowadays for a shorter term or potentially furnished place, is that right? It's possible we'd be looking at 18 months and, if that's the case, we may want something furnished (though I know I'd want to approve the furniture because I hear it can be gross). And, perhaps silly question, but with a package does the employee or employer tend to sign the lease?

Thank you!

[JR8]

Welcome back
My impression is that there has been something of a pogrom of the FTs going on, and if so I'd expect some desperate landlord's out there. That would mean more flexibility to negotiate. If a 2yr TA with option to renew year-by-year is common, there is little difference between that at 18Mos plus a similar option IMO. In a wilting market the asking/advertised prices tend to be sticky, and that's when having an agent who really works for you pays their way. Ideally find a couple of places you like, then see how far you can push the LLs on price and/or extras.
It used to be common for the employer to sign the TA and pay the rent. That was under a bells+whistles expat package. These days there seems to have been a rise in employers providing lump-sum rent allowances and the employee signing for their own place. There used to be a nuance there tax-wise, the former as a lower-tax benefit in kind, the latter as income parallel to salary - don't know if that still applies. If you have a choice the former is probably better (above and beyond tax considerations), not least since the employer deals with the LL, which would mean that potential minefield off your hands.

[ivysmom]

JRB, thanks for that, it's helpful. It is interesting that in a weakening market LLs can either stick to their guns more or be more inclined to negotiate. It can cut both ways. And I wonder about the tax implications of how you handle the housing allowance; I will definitely look into that if we go further down this road. On the higher end of the housing spectrum, what would be your guess of how much a, say $18K condo in 2013 is listing for now....$15K? Or I wonder if the top-tier has been especially hard hit (or conversely, if those with sweet deals have managed to hang on to them despite the general economy). And I can't figure out what FT means Have a great day.

Btw I giggle at your tag line every time I see it. So true.

[JR8]

JRB, thanks for that, it's helpful. It is interesting that in a weakening market LLs can either stick to their guns more or be more inclined to negotiate. It can cut both ways.

Hey it's a pleasure. We thought we had you on-board last time, so we're really counting on you this time hehe
I've been a landlord (London) for 25yrs now, and had 5 rentals, so I've an insight into how the thinking goes. When you start out (landlording) and the finances are tight then you're pragmatic. You'll do deals as capacity for voids is very tight. The newbie landlords mantra #1 is 'Voids kill'. And that's really true. It's almost always better to get in a tenant at any reasonable price than sit on an empty property, as with the latter you additionally still face all the bills on the vacant place. A 2-3 month void can wipe out the potential net profit you'd have made in a whole year. This is the kind of realistic pragmatism that oldster landlords will happily coach newbies in. Come to think of it, it might be useful for some tenants to see the LLs side of things too.

Once you've been LLing for a while, you've good contingency built into your cashflows etc, then you can be pickier over what tenant you'll take. If offered two tenants - and told their nationality/age/occupation and perhaps employer I'd have no hesitation in having a feel for the likely better bet.
So the flipside you have the concept for the tenant of burnishing up their offer as best as is possible, knowing what is going to probably tick a LLs boxes. For example a something of an extreme if you can pay 6mos rent up front on a tenancy agreement, you won't find many objecting LLs! And you might possibly be offering a cashflow lifeline to one, which is worth a *lot*. So offering say 6mos up-front together with a lower ball offer might be one tactic, one sweetener.

And I wonder about the tax implications of how you handle the housing allowance; I will definitely look into that if we go further down this road. On the higher end of the housing spectrum, what would be your guess of how much a, say $18K condo in 2013 is listing for now....$15K? Or I wonder if the top-tier has been especially hard hit (or conversely, if those with sweet deals have managed to hang on to them despite the general economy). And I can't figure out what FT means Have a great day.
Btw I giggle at your tag line every time I see it. So true.

Yep, not sure on the tax position now. And haven't done a tax return in SG for years either. The SGn tax code is meant to be simple, or you could post the Q as a standalone question, I'm sure someone here has info on it that might help.

$18k for a condo....nice! I'm looking forward to you filling up the 'Where should we live?' template ->
http://forum.singaporeexpats.com/viewtopic.php?t=101985
'GUIDE: Where should I/we consider living?'
Why not re-spec what you're after, give the top-most housing$, or give a range, and see what kind of suggestions come up.I don't know what rents have done. Most people rent a place and that's that. They might have a feel for subsequent direction, but just roughly. Only doing research afresh if they're going to negotiate a renewal.

FT = 'Foreign Talent'. A ghastly euphemism coined by the govt to justify bringing in, well, 'FTs', in the face of the more embittered locals. To most people they're, we're, simply expats.

p.s. Glad you like the tag-line Yeah, I chose it when I hit the big 5-0. One eye in the rear-view mirror, and considering the life-changing moves and journeys most of us come here to share. There never is a perfect answer. Well, not 'til you some way down the road...

[BBCWatcher]

Housing allowances and direct company payments to landlords are Singapore taxable, dollar for dollar. On the U.S. side (assuming you're a U.S. person) if you earn above the Foreign Earned Income Exclusion then the Foreign Housing Exclusion can kick in to give some U.S. tax relief -- effectively raising the exclusion, i.e. the amount of earned income subject only to Singapore tax.

Note also you can sign a traditional two year lease with a diplomatic clause available after one year. That's complete standard stuff in Singapore's rental market. The diplomatic clause ends the lease early if you're transferred out, although usually the landlord gets to keep an extra month of rent in that event.

[JR8]

I don't agree that there is any basis to retain rent if the Diplomatic Clause is activated. But I agree more generally that LLs will (apparently) do just about anything to not return your deposit, especially if you 'scorn them' by activating this clause.

[BBCWatcher]

I was referring to the fact that diplomatic clauses often have "penalties" equivalent to one months' rent. That is, there's some disincentive to invoking the standard diplomatic clause, but it's not too bad for the tenant.

Of course leases vary, but that sort of diplomatic clause is/was well within norms, even back when rental markets were tighter.

In other words, it isn't going to be hard to negotiate at least the practical result of an 18 month tenancy if you just mention the words "diplomatic clause" as one of your requirements.

[ivysmom]

Thanks to you both. It sounds like, functionally, I shouldn't be too worried about a < 2 year term which takes the pressure off. I should probably put out a general call for places to live, co would probably adjust housing allowance down for market conditions (and new CFO!) but who knows. It would be a healthy budget if it were anything in this ballpark, which for a family with 3 youngish kids would be nice for sure.

Commute-wise, a question -- it seems like given timing, etc. SAS may be the most realistic choice for our kids, but I wouldn't want to live in Woodlands. When you look at the interactive singapore maps, it shows only a 4 minute difference (by car) between SAS and Holland Village (18 mins) vs. SAS and East Coast (22 mins), which seems strange. Does that seem right to you? Husband's office would be CBD so that's central, school is the biggest issue. These two locations seem more fitting for us han something like Orchard (no need to be close to the nearest Gucci store or impress our friends).

Another somewhat random question -- when I was there I saw plenty of places that had a helper's room that was the tiniest thing I'd ever seen, and the broker made it sound like the only other option was giving up a true bedroom en suite for a helper (I'm not convinced I'd want a helper, btw, but it's worth thinking about). But in your experience are there some places where a helper's room is a more liveable size -- trying to narrow in on how many bedrooms I need to look for as I surf on .!

Again, I really appreciate the intelligent discussion on this stuff. And if this actually happens I say we revisit the notion of a Singapore wine club

[BBCWatcher]

It would be a healthy budget if it were anything in this ballpark, which for a family with 3 youngish kids would be nice for sure.

Just as a reminder, for every S$1 in higher rent that your employer pays in housing allowance or directly to the landlord, you will pay some percentage in higher tax. I'm assuming you aren't "tax equalized." "Don't go too crazy," basically. You are allowed to spend below "budget" and probably should.

[ivysmom]

I think the whole package (proposed when we went down this road a few years ago) was tax equalized and I would certainly confirm. That's what made the scenario e so expensive to the co...everything got grossed to make it tax neutral for us and the numbers get pretty out of control!

[JR8]

I wonder if the employer would be willing to pay out the annual rent allowance to you as a lump sum, and then you go off and arrange what ever kind of rental you like ($ of your choosing). That was Standard Operating Procedure at my last employer.