Cost of Purchasing a Property in Singapore

PRIVATE PROPERTY

Option fee

Paid to secure the Option to Purchase (OTP) for your dream home. Once the option fee has been paid, the sellers are contractually bound to make the property available to the buyer. Buyers, however, can choose to change their mind but will forfeit the option fee.

Cost: Usually 1% of the property’s agreed purchase price.

Option exercise fee

Once the buyer is satisfied the property is physically fit for purchase and has their finance organised, they will pay to exercise the option.

Cost: Usually 5% or 10% (less the option fee) of the agreed purchase price.

Down payment

The minimum sum to be paid in cash; it is the difference between the purchase price and the loan quantum granted and includes option monies paid.

Cost: Minimum sum less option and option exercise fees.

Example: A $1 million property financed with maximum 80% loan quantum ($800,000):

Option fee 1% = S$10,000

Option exercise fee 9% = S$90,000

Down payment/minimum sum = S$200,000 less option monies paid $100,000

Grand total = S$100,000.

 

At least five percent of the $200,000 must be paid in cash; the remaining 15% can be cash or CPF savings.

Stamp duty – purchase price

Once the OTP is signed, it gives rise to a valid sale contract which attracts Stamp Duty, (link to this) currently levied at:

1% for the first S$180,000

2% for the next S$180,000

3% for the remainder of either the purchase price or market value, whichever is higher.

See Stamp Duty for more information on rates for different categories of buyers, including Additional Buyers Stamp Duty for foreigners.

Stamp Duty can be paid with cash or CPF.

 

Stamp Duty – mortgage documents

The paperwork for securing a standard mortgage attracts tax at a rate of 0.4% on the amount secured, paid to IRAS.

Cost: Capped at S$500.

Can be paid with CPF savings or cash.

Legal fees

Paid to a lawyer to carry out the necessary background checks on the property (due diligence). Banks often appoint their own panel of lawyers then allocated to buyers; in this case, the legal fees are usually predetermined.

Cost: Around S$2,500-S$3,000 when using a lawyer appointed by the bank. Private lawyers’ fees vary.

Legal fees can be paid with CPF savings or cash.

Valuation fee

A fee paid for a valuation of the home; banks will use the valuation figure to qualify the loan. Valuation fees may be absorbed by the bank issuing the loan as a benefit in some loan packages.

Cost: Usually between S$350 and S$500, depending on the property type.

Valuation fees can be paid with cash or CPF savings.

 

HDB FLATS

Option fee

An amount, determined between the buyer and seller, to be paid by the buyer after the seller has granted the Option to Purchase.

Cost: Between S$1 and S1,000.

 

Option exercise fee

The buyer will pay a deposit to exercise the OTP within 21 days of it being issued.

Cost: Maximum S$5,000 including the option fee.

 

Down payment

The down payment on all HDB flats includes monies paid to secure and exercise the OTP.

Cost: 10% of agreed purchase price.

The option fee, option exercise fee and down payment may all be paid using cash or CPF savings.

 

Valuation fee

A valuation report is needed if CPF savings or loans from a bank or the HDB are being used to finance the flat. The fee varies depending on the type of flat to be valued.

Cost: Between S$140 and S$200.

 

Resale application fees

Resale application fees are payable by both the buyer and seller and are non-refundable.

Cost: Between S$40 and S$80, depending on the type of flat.

Legal fees

Legal fees cover costs such as conveyancing and the registration of land titles and deeds. The amount varies depending on whether the buyer uses the HDB’s solicitor or appoints their own.

Cost: See the HDB website for a breakdown of costs for the HDB’s solicitor.

Some of the legal fees must be paid in cash; the rest can be paid using CPF savings.

 

Insurance

Fire insurance is compulsory for borrowers taking out HDB loans. It covers internal structural damage and damage to original fixtures and fittings (but not damage to furniture or home contents), in the case of a fire or similar event.

Cost: From S$1.50 for a one-room flat to S$7.50 for an Executive or Multi-Generation flat for a five-year term.

 

Administrative fees

A non-refundable payment made when submitting an application for a flat to HDB.

Cost: S$10


Other administrative fees

Other administrative fees apply should the buyer agree to the temporary extension of stay by the flat’s sellers.

Cost: S$20

 

Agent Fees

Cost: Traditionally 1 - 2% of the agreed purchase price.

 

Finally, buyers of both private and HDB properties may be faced with upfront payments for any property tax or utility bills that have been paid in advance by the seller. Pro-rated reimbursements for these expenses are usually negotiated during the sales process.

 

 

 

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Bhavina Kaur
Senior Marketing Director ▪ Certified Residential Realtor
ERA REALTY NETWORK PTE LTD
bhavina7777@gmail.com
CEA Licence No.:
L3002382K / R051488A
+(65) 9170 8295