Property Unpacked: The connection between TOP, CSC, and sub-sales

By Elizabeth Choong

/ EdgeProp Singapore |

March 5, 2024 4:17 PM SGT

Average price for sub-sale transactions is significantly lower than new sales. (Photo: Samuel Isaac Chua/EdgeProp Singapore)

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SINGAPORE (EDGEPROP) - Most owners know what temporary occupation period (TOP), and many look forward to the TOP date of their condo because it means they can collect the keys to their brand new home. However, fewer buyers know that buildings require a certificate of statutory completion (CSC) and how it is related to sub-sales. We hope to demystify these two terms with this article.

What is CSC?

According to the Building and Construction Authority (BCA), a CSC or TOP must be issued by them before a building can be occupied. BCA will issue a CSC when the development is deemed to have complied with all necessary requirements under the Building Control Act and Regulations and has obtained all necessary clearances from the relevant government authorities, such as URA, LTA, NParks, SCDF, PUB, and NEA. A TOP is issued in lieu of CSC when there are some outstanding issues, but the development is deemed to have fulfilled the requirements that make it safe for occupation.

Sometimes, a condo receives its TOP only because there are some outstanding minor works. For example, the walkway to the condo’s clubhouse is unpaved, but the condo units are completed and ready for occupation. The condo’s CSC will be issued after the completion of all works.

Read also: ANALYSIS: Does it make sense to buy a sub-sale unit?

In short, the issuance of TOP means that the development is deemed by the government authorities to be ready and safe for occupation, but there are some uncompleted minor works in the common areas. The issuance of CSC means that the development is fully completed in accordance with all government requirements.

How is CSC related to sub-sale?

Many are familiar with the terms "new sales" and "resales," but most are less familiar with the term "sub-sales." Resales tend to take place after the issuance of CSC and the subsidiary strata certificate of title, but new sales tend to take place before both certificates are issued. Likewise, sub-sales tend to take place before both certificates are issued. A subsidiary strata certificate of title is often referred to as a strata title, which is offered to the owners of each strata unit to prove ownership of the strata unit.

So what is the difference between new sales and sub-sales? New sales are basically the sale of a unit directly by the developer, but a sub-sale refers to the sale of the unit by a seller who is not the developer. The unit in both scenarios would not have received CSC and the subsidiary strata certificate of title. If the unit in question has received both certificates, then it would be considered a resale.

Seller’s stamp duty may be payable for some sub-sales

Sub-sales tend to be viewed as speculative sales because of the short holding period by the seller. As such, the government introduced the seller’s stamp duty (SSD) in an attempt to curb such speculative transactions in the residential property market.

Currently, SSD is payable for residential properties sold within three years of purchase, down from four years. The SSD rate has also declined.

Sub-sales make up only a small percentage of total sales

The SSD has done an excellent job of curbing the number of sub-sales. Sub-sales made up 16% and 13% of all condo sales in 2008 and 2009, respectively. However, the percentage dropped to 10% in 2010 when SSD was first introduced and has since remained under 10%, hitting a record low of merely 1% in 2020. Last year, sub-sales made up 7% of total sales transactions for condos, up from 4% in 2022.

Source: EdgeProp Market Trends (as at 4 March 2024)

The increase in the number of sub-sale transactions in recent years could be attributed to construction delays. Transactions that took place before the development receives its CSC are considered sub-sales if the seller is not the developer. Shortage of manpower and construction materials means that more developments are receiving their CSC later, and so more transactions would be considered sub-sales instead of resales.

Construction delays also mean that more prospective buyers are on the hunt for condos that have just received or are about to receive their TOP because these buyers do not have time to wait for their new home to be completed. Purchasing such condos means that the buyer can move into their new home almost immediately. Transactions for such units usually fall under sub-sales because these units may have obtained TOP but are unlikely to have received CSC too.

The average price for a sub-sale is naturally above resale because of its longer remaining tenure. However, it is significantly below the average price for new sales. For the first two months of this year, the average price for sub-sale units ($1,937 psf) is $490 psf lower than new sale units ($2,427 psf), but $262 psf above resale units ($1,675 psf). Last year, the price gaps were wider at $617 psf for new sales and sub-sales and $291 psf for sub-sales and resale. This means that savvy buyers are able to snap up an almost brand-new home at a lower price.