Purchasing Residential Property

Primary Market (New Launch)Secondary Market (Resale)
Basic Checks and Information

This guide provides residential buyers with basic information on the process of buying uncompleted private residential properties and some important considerations which they should take into account before committing to a purchase from licensed housing developers in Singapore.

Basic Checks and Information – Before you visit a showflat or view any unit, you should familiarise yourself with some of the existing Government policies which may affect your purchase.

– If you own a HDB flat, DBSS flat or Executive Condominium, you have to fulfill the minimum occupation period before you can purchase private residential properties.

– If you are not a Singapore citizen, you have to obtain approval from the Controller of Residential Property before you may buy landed houses (including strata landed houses).

– You should buy within your financial means. Take note that there are limits on the use of CPF monies for property purchase. There are also rules on the amount of loans that can be borrowed to finance property purchase.

– Besides the price of the property, other fees such as stamp duty and property tax are payable.

– Read through the Option to Purchase and Sale and Purchase Agreement carefully before signing the documents or placing a booking fee. Consult a lawyer on your rights and obligations before signing any document.
Check your eligibilty to buy – If you own a HDB flat, a DBSS flat or an Executive Condominium, you may wish to check with HDB whether you have fulfilled the minimum occupation period before you purchase any private residential properties.

– If you are not a Singapore citizen, you will need to obtain approval from the Controller of Residential Property and the Singapore Land Authority, before you may buy landed houses which includes strata landed houses.

Consider Your Finances – Before paying any booking fee to purchase a property, you are advised to discuss with a banker the loan amount that you may obtain, taking into consideration potential future changes in interest rates.You could also use the “Home Affordability Calculator” to estimate your housing loan payments based on your income and ability to service the loan.

– There are other fees payable when purchasing a residential property, such as stamp duty and property tax. You may also have to pay a fee for a valuation report on the value of the property to be purchased which is required by banks and the Central Provident Fund (CPF) Board. You should find out from the real estate salesperson or your lawyer about any other fees which you may have to pay e.g. Additional Buyer’s Stamp Duty, Seller’s Stamp Duty, etc.

– There are limits on the use of CPF monies for the purchase of properties. Information on the use of CPF monies and how proceeds of sale from your previous residential property will be handled is available from the CPF Board’s website.

Source: URA
Option to Purchase (OTP)

An Option to Purchase is a right or option given by the developer of a property to an intending purchaser to buy the property.

Option to Purchase – Booking fee payable is between 5% and 10% of purchase price.
– Licensed developers are required to use standard Option to Purchase.
– All intending purchasers must be named in the Option.
– Option is valid for 3 weeks from delivery of the Sale & Purchase Agreement to the purchaser.
– To exercise the Option, the Sale & Purchase Agreement has to be signed and the balance downpayment paid.
– 25% of the booking fee is forfeited if the Option is not exercised.
– Expected vacant possession date is the date when the developer is contractually bound to deliver possession of the property to the buyer.
Booking Fee – The booking fee for an Option to Purchase is between 5% and 10% of the purchase price of the residential property.
Standard Option to Purchase – A licensed housing developer is required to use the standard form of Option to Purchase when selling units in a housing project.
– The developer is required to seek approval from the Controller of Housing for any change to be made to the standard Option to Purchase. The standard Option to Purchase cannot be amended even by mutual agreement between the buyer and developer unless approval is given by the Controller of Housing.
Non-Assignability of Option – The purchaser is not allowed to assign or transfer the Option to Purchase that has been granted to him by the developer to any other persons. Hence, he needs to ensure that all persons who are intending to purchase the property are correctly identified and named as the ‘intending purchasers’ in the Option to Purchase. Only the intending purchasers named in the Option to Purchase may exercise the option and sign the Sale & Purchase Agreement for the property as purchasers.
After an Option has been granted, the Controller’s approval has to be obtained for any change of name in the Option.
Validity Period Of Option – If a purchaser is granted an Option to Purchase, the developer is required within 14 days from the date of the Option, to deliver the Sale & Purchase Agreement and the original or copies of the title deeds to the purchaser or his lawyer for review.
– The option is valid for 3 weeks from the date of delivery to the purchaser or his lawyer of these documents. The intending purchaser has to exercise the Option to Purchase within its validity period if he decides to buy the property.
Process to exercise Option – Within the 3 weeks validity period, the intending purchaser may exercise the Option to Purchase by doing all of the following:
– Sign all the copies of the Sale and Purchase Agreement;
– Return all copies of the signed Agreement to the developer; and
– Pay to the developer the balance down payment (i.e. 20% of the purchase price less the booking fee paid).
– The developer may, instead of the 3 weeks mentioned above, allow purchasers to pay the balance down payment within 8 weeks from the Option date.
Non-exercise of Option – If the Option to Purchase is not exercised before it expires, the developer will be entitled to forfeit 25% of the booking fee, whether the payment for the booking fee has been made (e.g. cheque bounced). The other 75% of the booking fee will be refunded to the purchaser. Thereafter, the developer can sell the property to any other interested party.
Expected Vacant Possession Date – Buyers should note that the expected vacant possession date is an estimated date and actual delivery of vacant possession may occur before or after the vacant possession date. The developer is contractually bound to deliver vacant possession of the property to the buyer by the date stated in the Option to Purchase and Sale & Purchase Agreement, failing which, the developer has to pay liquidated damages to the buyer. Delivery of vacant possession will occur after the issue of the Temporary Occupation Permit (TOP) for the project.

– Developers or their appointed salespersons may sometimes also provide an “estimated TOP date” to buyers, which is estimated based on the planned construction schedule. Buyers should take into consideration that the actual TOP date may vary, depending on the progress of the construction of the project.

Sale & Purchase Agreement

The SSD for residential properties acquired on or after 14 January 2011 and disposed of within four years of acquisition are as follows.

>4 years 0%
Taking Possession and Moving In

The SSD for residential properties acquired on or after 14 January 2011 and disposed of within four years of acquisition are as follows.

>4 years 0%
Completion of the Sale

The SSD for residential properties acquired on or after 14 January 2011 and disposed of within four years of acquisition are as follows.

>4 years 0%

TDSR was introduced by the The Monetary Authority of Singapore (MAS) on 28 June 2013.

The TDSR is an affordability “ratio” that’s meant to prevent you from purchasing a property that’s well beyond your financial means. It’s also meant to curb property speculation so that Singapore doesn’t experience a subprime meltdown.

The TDSR limits the amount of money banks and other Financial Institutions (FIs) can lend you – which is 60% of your gross monthly income minus all of your outstanding debts.

The outstanding debts that the TDSR will take into account include:

– Credit card balances (including “instalment plans” with retailers)
– Student loans
– Personal loans
– Car loans
– Other home loans (if applicable)

While being able to borrow up to 60% of your gross monthly income may sound like a lot, the reality is that most of us carry outstanding debts that will affect how much we can borrow.

*Note on variable income: If you’re a variable income earner, the TDSR framework requires you to take a 30% “haircut” on your average monthly income. Variable income items such as bonuses or allowances can also be factored in.

Stamp DutyTotal Debt Servicing Ratio (TDSR)
Buyer Stamp Duty (SD)
Value of Property %
First S$180,000 1
Next S$180,000 2
Thereafter 3
Additional Buyer Stamp Duty (ABSD)
Transaction From 8 Dec 2011 to 11 Jan 2013 From 12 Jan 2013
Singapore Citizens (SC) with 1st Property Purchase NIL NIL
Singapore Citizens (SC) owning 1 Residential Property with 2nd Residential Property Purchase NIL 7%
Singapore Citizen (SC) owning 2 Residential Property with 3rd & Subsequent Property Purchase 3% 10%
Singapore Permanent Residences (SPR) with 1st Property Purchase NIL 5%
Singapore Permanent Residences (SPR) owning 1 Residential Property with 2nd & Subsequent Residential Property Purchase +3% +10%
Foreigners and non-individuals (Corporate entities) buying any residential property +10% +15%
Seller Stamp Duty (SSD)

The SSD for residential properties acquired on or after 14 January 2011 and disposed of within four years of acquisition are as follows.

Holding Period Rate of Selling Price / Value
<=1year 16%
>1-2 years 12%
>2-3 years 8%
>3-4 years 4%
>4 years 0%

TDSR was introduced by the The Monetary Authority of Singapore (MAS) on 28 June 2013.

The TDSR is an affordability “ratio” that’s meant to prevent you from purchasing a property that’s well beyond your financial means. It’s also meant to curb property speculation so that Singapore doesn’t experience a subprime meltdown.

The TDSR limits the amount of money banks and other Financial Institutions (FIs) can lend you – which is 60% of your gross monthly income minus all of your outstanding debts.

The outstanding debts that the TDSR will take into account include:

– Credit card balances (including “instalment plans” with retailers)
– Student loans
– Personal loans
– Car loans
– Other home loans (if applicable)

While being able to borrow up to 60% of your gross monthly income may sound like a lot, the reality is that most of us carry outstanding debts that will affect how much we can borrow.

*Note on variable income: If you’re a variable income earner, the TDSR framework requires you to take a 30% “haircut” on your average monthly income. Variable income items such as bonuses or allowances can also be factored in.