Guide to Buying New Sale Residential Property

By Lin Zhiqin / The Edge Property | June 10, 2016 12:00 PM SGT
residential new sale - EDGEPROP SINGAPORE
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
Stage
Payment under a standard payment scheme ( % of purchase price )
Upon the grant of Option to Purchase
5% - 10% (booking fee)
Upon signing of the Sale & Purchase Agreement or within 8 weeks from the Option date
20% less booking fee
Completion of foundation work
10%
Completion of reinforced concrete framework of unit
10%
Completion of partition walls of unit
5%
Completion of roofing/ceiling of unit
5%
Completion of door sub-frames/ door frames, window frames, electrical wiring, internal plastering and plumbing of unit
5%
Completion of car park, roads and drains serving the housing project
5%
Temporary Occupation Permit or Certificate of Statutory Completion
25%
On completion date
15%
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