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The units in a residential project can only be sold by a developer before its construction and after obtaining (i) the Building Plan Approval granted by the Commissioner of Building Control and (ii) the Housing Developer's Sale Licence issued by the Controller of Housing.

Sales Transaction Documents 
In Singapore, licensed housing developers are required to use the standard ‘Option to Purchase’ and ‘Sale & Purchase Agreement’ forms prescribed under the Housing Developers’ Rules for the sale of uncompleted housing units.

With a construction period of three to four years, the Sale & Purchase Agreement informs buyers the amount they need to pay according to various stages of the project’s construction.

Upon signing of the Sale & Purchase Agreement, the buyer’s lawyer will lodge a caveat with the Registrar of Titles to protect the buyer’s interest. 
Project Account
All licensed housing developers are required to open and maintain a Project Account for the said housing project with a bank or financial institution. It is compulsory for the developer to deposit into this account:

  • The total sum of money paid by a buyer (including the booking fee) for the purchase of a unit up to the issue of Temporary Occupation Permit (TOP) for the unit;
  • Any and all loans granted to the building project for the purpose of construction

Withdrawal from this account is only applicable for purposes related to the specific housing project,

Defects Liability
Buyers are given up to 12 months from the date of TOP to report on any defects found in their unit. The developer is under obligation to resolve any defects within the housing project during the 12-month period.

A step-by-step guide to purchase a property under the Housing Developers' Rules for uncompleted condo projects:

  1. Upon signing the Option to Purchase, a booking fee of 5% of the purchase price has to be paid.
  2. Within 14 days of paying the booking fee, the buyer has to select a mortgage loan and engage a lawyer.
  3. During this period, the developer will send the Sale & Purchase Agreement to the buyer or buyer’s lawyer.
  4. The buyer has 3 weeks from the date of receiving the Sale & Purchase Agreement to sign on all the execution copies and return to the developer.
  5. Within 14 days of signing the Sale & Purchase Agreement, the lawyer will inform buyer to pay stamp duties to the Inland Revenue of Singapore. The amount payable is estimated at 3% of the purchase price less S$5,400.
  6. The buyer will pay the developer 20% of the purchase price minus the 5% booking fee within 8 weeks of signing the Option to Purchase.
  7. If the buyer fails to exercise this option before expiry date, the developer will forfeit 25% of the Booking Fee and the balance 75% will be returned to buyer. 
Buyer Stamp Duty

Buyer Stamp Duty (BSD) is a tax applied on documents relating to the purchase of a property. It has to be paid within 14 days of signing the Sale & Purchase Agreement. The amount payable is estimated at 3% of the purchase price less S$5,400.

Additional Buyer Stamp Duty

With the revision of the Additional Buyer Stamp Duty (ABSD) announced by the Government on 11 Jan 2013, buyers have to pay the ABSD in addition to the BSD.

Citizenship Rate on 1st purchase Rate on 2nd purchase Rate on 3rd purchase
Singapore Citizens (SC) N.A 7%# 10%
Singapore Permanent Residents (SPR) 5% 10%# 10%#
Foreigners (FR)
and non-individuals
(Corporate Entities)
15%* 15%* 15%*

#For wholly, partially or jointly owned properties.

*Entity refers to a person who is not an individual, and includes an unincorporated association, a trustee for a collective investment scheme when acting in that capacity, a trustee-manager for a business trust when acting in that capacity and, in a case where the property conveyed, transferred or assigned is to be held as partnership property, the partners of the partnership whether or not any of them is an individual.

Seller Stamp Duty

On 13 January 2011, the Government announced the extension of the holding period for imposition of Seller Stamp Duty (SSD) on residential properties from 3 years to 4 years based on new rates. The new SSD rates will be imposed on residential properties which are acquired (or purchased) on or after 14 January 2011 and disposed of (or sold) within 4 years of acquisition, as follows:

  • Holding period of 1 year : 16% of price or market value, whichever is higher
  • Holding period of 2 years : 12% of price or market value, whichever is higher
  • Holding period of 3 years : 8% of price or market value, whichever is higher
  • Holding period of 4 years : 4% of price or market value, whichever is higher

Properties acquired before 20 Feb 2010 will not be subject to SSD.

Property Tax applies for residential properties that are either owner-occupied or 
non-owner occupied and are applied on a progressive scale. In comparison, owner-occupiers pay lower property tax than non-owner-occupiers who usually rent out their properties while occupying another property.

How to Calculate Property Tax

Multiply the Annual Value (AV) of the property with the Property Tax Rates that apply to you.

For example, if the AV of your property is $30,000 and your tax rate is 10%, you would pay $30,000 x 10% = $3,000.
More information on Property Tax

TDSR for Property Loan in Singapore
When applying for property loan with the banks, borrowers need to be aware that one of the mandatory assessments by banks is the Total Debt Servicing Ratio (TDSR) introduced by the Monetary Authority of Singapore (MAS) on 28 June 2013. 

What is TDSR?
Total Debt Servicing Ratio (TDSR) refers to the proportion of your monthly gross income that is spent on debt obligations.

According to MAS policy, TDSR must not exceed 60% of your income. The monthly debt repayment covers all loans including those from HDB, financial institutions, car loan, renovation loan, personal/credit card loans, loans from money lenders in the borrower's name or jointly with another borrower, any existing property loans, and the new loan you are taking up, etc.

How to Calculate TDSR?
(a) Total Debt Service Ratio (TDSR) = Monthly Total Debt Obligations   ÷   Gross Monthly Income (excluding CPF Contribution by Employer)

What can be considered in Gross Monthly Income?
• 100% of monthly fixed income 
• 70% of monthly variable income (e.g. allowance, commission, bonus, etc)
• Financial assets, like bank deposit, that are pledged with the bank for 4 years

For joint-ownership, the calculation is based on combined income and combined debt obligations.


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