Pre-purchase checks

• Singapore citizens who own a HDB flat, DBSS flat or Executive Condominium must fulfill the minimum occupation period of 5 years before they can purchase private residential properties
• A foreign person will require approval from the Land Dealings Approval Unit of Singapore Land Authority before they can purchase the following types of residential properties:

o   Vacant residential land

o   Terrace house

o   Semi-detached house

o   Bungalow/detached house

o   Strata landed house which is not within an approved condominium development under the Planning Act (eg. townhouse or cluster house)

o   Shophouse (for non-commercial use)

• A foreign person can purchase the following types of residential properties without special approval:

o   Condominium unit

o   Flat unit

o   Strata landed house in an approved condominium development

o   A leasehold estate in a landed residential property for a term not exceeding 7 years, including any further term which may be granted by way of an option for renewal

o   Executive condominium unit, HDB flat and HDB shophouse

• Estimate your budget by using a TDSR and mortgage calculator

Selecting your dream home

• Consider the qualities your dream home should possess, such as location, amenities, facilities and design
• Shortlist the developments that fit your requirements. Consider engaging a real estate salesperson (property agent) who can assist you in making your selection and handling the paperwork

• Check that the salesperson is registered with the Council for Estate Agencies (CEA)
• Salesperson’s commission is usually paid by the developer for New Sale

• Visit sales galleries of your shortlisted developments to learn more and zoom in on your dream home

Procedure for purchase

• Obtain an Approval in Principle (AIP) for a bank loan

• An AIP lets you know your eligible loan quantum and the monthly mortgage payable
• Having an AIP before booking prevents the forfeiture of your booking fee should there be hiccups in the process of mortgage approval

• Make payment of 5% to 10% booking fee to the developer for the Option to Purchase (OTP)
• Option to Purchase is valid for 3 weeks from delivery of S&P

• Buyer cannot do a sub-sale during the Option stage as the OTP is not assignable

• The developer will deliver the Sales and Purchase Agreement (S&P) within 2 weeks to your address or your lawyer
• Submit OTP to bank

• Receive Letter of Offer (LO) from bank

• The LO is a contract stating the terms of the loan offered by the bank to the borrower

• Sign Letter of Offer (LO)

• This forms a binding contract between the bank and the borrower

• Sign and send S&P to the developer, and pay the balance down payment of 20% of purchase price, less booking fee paid

• The developer may allow buyers to pay the balance down payment within 8 weeks of the Option date
• If Option is not exercised, 25% of the booking fee will be forfeited with the remaining 75% refunded to buyer

• Pay Stamp Duty within 2 weeks of signing S&P

• The Buyer’s Stamp Duty (BSD) is computed based on the purchase price or market value of the property, whichever is higher
• Buyer needs to pay BSD of 1% on the first $180,000, 2% on the next $180,000 and 3% on the remaining amount of the purchase price
• The Additional Buyer’s Stamp Duty (ABSD) depends on the buyer’s residency status and number of residential properties owned
• Singapore citizens need to pay 7% ABSD for the purchase of a second residential property and 10% ABSD for the third and subsequent residential property
• Singapore Permanent Residents need to pay 5% ABSD for the purchase of a first residential property and 10% ABSD for the second and subsequent residential property
• Foreigners need to pay a 15% ABSD for any residential property purchased
• Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland; and Nationals of the USA are accorded the same ABSD rates as Singapore citizens

Schedule of payment

• The purchase price will be paid in installments according to the Standard Payment Scheme
• Notice of progress payments must be supported by the architect’s Certificate of Stage Completion

Expected TOP and Vacant Possession Date

• The developer may provide an estimated Temporary Occupation Permit (TOP) date. The actual TOP date may vary depending on construction progress
• The developer is contractually bound to deliver Vacant Possession of the property by the date stated in the OTP and S&P. Failing which, the developer has to pay liquidated damages to the buyer

Source: URA, SLA, IRAS, Singapore Statues Online, The Edge Property