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Legal protection for home buyers in Singapore

  1. A Licensed Housing Developer can only sell the building project before construction after they have obtained the following:
    1. Building Plan Approval from Commissioner of Building Control
    2. Developer’s Sale Licence from Controller of Housing
  2. A Licensed Housing Developer is 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.
  3. Once buyer has entered into an agreement, buyer’s lawyer will prepare and lodge a caveat with SLA on their behalf.
  4. A Licensed Housing Developer is required to open and maintain a Project Account for the building project with a bank or financial institution. It is required to:
    1. Deposit forthwith upon receipt all instalments of purchase money (including the booking fee) payable by a purchaser towards the purchase of a unit in a building project prior to the grant of the temporary occupation permit by the competent authority for the unit, including any instalment of purchase money payable by the purchaser towards the purchase of the unit upon the grant of the temporary occupation permit, into the Project Account of the building project.
    2. Deposit any loan for the construction of a building project into the Project Account of the building project.
  5. A Licensed Housing Developer can withdraw monies from the Project Account related to the building project only.
  6. Buyers can move to their new homes after Temporary Occupation Permit (TOP) is obtained by Commissioner of Building Control. There is a defect liability period of 12-month warranty period from the date of notice is served for you to take possession of the property.

Procedure to purchase a property

Purchase under the Housing Developers’ Rules for uncompleted condo projects:

  1. You will first need to pay a booking fee which is 5% of the purchase price for the exchange of the Option to Purchase.
  2. Within 14 days after the buyer has paid the booking fee, Developer will deliver the Sale and Purchase Agreement and title deeds of the Property to the buyer or the buyer lawyer.
  3. Buyers have to sign all the execution copies of the Sale and Purchase Agreement and return to developer within 3 weeks from the date of the delivery to the buyers.
  4. Buyers who exercises this Option shall pay the developer being 20% of the Purchase Price less the Booking Fee, within 8 weeks after the date of this Option.
  5. The buyer has to pay all applicable buyer stamp duties to the Inland Revenue of Singapore within 14 days of signing the Sale & Purchase Agreement.
  6. If the buyer does not exercise this Option before it expires, Developer will forfeit 25% of the Booking Fee and refund the balance 75% of the Booking Fee.
  7. The buyer is required to pay the remaining 80% of the total purchase price of the property periodically. This will be based on the completion status of the project.

Stamp Duty

Buyer Stamp Duty

Buyer Stamp Duty (BSD) is a tax on documents relating to the purchase of property. It has to be paid within 14 days of signing the Sale & Purchase Agreement. Prior to 20 Feb 2018, the top marginal BSD rate for both residential and non-residential properties was 3%. With effect from 20 Feb 2018, there are differentiated BSD rates between residential and non-residential properties. The top marginal BSD rate for acquisition of residential properties on or after 20 Feb 2018 is 4%.

Additional Buyer Stamp Duty

If you buy or acquire residential properties on or after 8 Dec 2011, ABSD may also be applicable. Buyer has to pay the ABSD in addition to the BSD. The ABSD rates have been most recently adjusted on 6 Jul 2018
Singapore Citizens:
  • Rate on 1st purchase: N.A
  • Rate on 2nd purchase: 12%#
  • Rate on 3rd purchase: 15%
Singapore Permanent Residents (SPR):
  • Rate on 1st purchase: 5%
  • Rate on 2nd purchase: 15%#
  • Rate on 3rd purchase: 15%#
Foreigners (FR) and non-individuals (Corporate Entities*):
  • Rate on 1st purchase: 20% (non-entities) / 25% (entities)
  • Rate on 2nd purchase: 20% (non-entities) / 25% (entities)
  • Rate on 3rd purchase: 20% (non-entities) / 25% (entities)

#Whether owned wholly, partially or jointly with others.

*Entity means 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

If a residential property is purchased on or after 20 Feb 2010, SSD is payable if the residential property is sold within the holding period. The below SSD rates will be imposed on residential properties which are acquired (or purchased) between 14 Jan 2011 and 10 Mar 2017: 
  • 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
For residential properties which are acquired (or purchased) on or after 11 Mar 2017 and disposed of (or sold) within 3 years of acquisition, applicable SSD rates are as follows:
  • Holding period of 1 year : 12% of price or market value, whichever is higher
  • Holding period of 2 years : 8% of price or market value, whichever is higher
  • Holding period of 3 years : 4% of price or market value, whichever is higher
Properties acquired before 20 Feb 2010 will not be subject to SSD.

For information about stamp duties, click here.

Additional Buyer Stamp Duty

If you buy or acquire residential properties on or after 8 Dec 2011, ABSD may also be applicable. Buyer has to pay the ABSD in addition to the BSD. The ABSD rates have been most recently adjusted on 6 Jul 2018

Property Tax

Property Tax is a tax on the ownership of property and applies whether the property is rented out, owner-occupied or vacant. Hence, owners who live in their HDB or private homes (known as owner-occupiers) also pay property tax.

As Singapore has a high proportion of home ownership, many individuals who pay property tax are owner-occupiers. Owner-occupiers pay much lower property tax in contrast to non-owner-occupiers, who are usually owners who rent out their properties or are occupying another property. This is because of the different progressive property tax rates applied on owner-occupied homes and non-owner-occupied homes from 1 Jan 2014.

For more information on property tax, please click here.

Mortgage Loan Information

LTV Limit
  • 1st Housing Loan: 75%; or 55% if the loan tenure is more than 30 years* or extends past age 65
  • 2nd Housing Loan: 45%; or 25% if the loan tenure is more than 30 years* or extends past age 65
  • From 3rd Housing Loan: 35%; or 15% if the loan tenure is more than 30 years* or extends past age 65
Minimum Cash Down Payment
  • 1st Housing Loan: 5% (for LTV of 75%) 10% (for LTV of 55%)
  • 2nd Housing Loan: 25%
  • From 3rd Housing Loan: 25%
Non-Individual Borrowers
  • 1st Housing Loan: 15%
  • 2nd Housing Loan: 15%
  • From 3rd Housing Loan: 15%

Mortgage Servicing Ratio (MSR)

The Monetary Authority of Singapore (MAS) has capped the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income.

The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 December 2013.

Total Debt Servicing Ratio (TDSR)

The Monetary Authority of Singapore (MAS) has introduced a Total Debt Servicing Ratio (TDSR) framework for all property loans granted by financial institutions (FIs) to individual s1 on 28 June 2013.

This will require FIs to take into consideration borrowers’ other outstanding debt obligations when granting property loans. They will help strengthen credit underwriting practices by FIs and encourage financial prudence among borrowers.

The TDSR of 60% means that the total debt of borrowers cannot be more than 60% of their income.

The methodology for computing the TDSR will be standardised. FIs will be required to:

  • Take into account the monthly repayment for the property loan that the borrower is applying for plus the monthly repayments on all other outstanding property and non-property debt obligations of the borrower;
  • Apply a specified medium-term interest rate or the prevailing market interest rate, whichever is higher, to the property loan that the borrower is applying for when calculating the TDSR; 1
  • Apply a haircut of at least 30% to all variable income (e.g. bonuses) and rental income; and
  • Apply haircuts2 to and amortise the value of any eligible financial assets taken into consideration in assessing the borrower’s debt servicing ability, in order to convert them into ‘income streams’ in computing the TDSR.

1 3.5% for housing loans and 4.5% for non-residential property loans.

2 Eligible liquid assets which are pledged for at least 4 years with the FI from which the borrower is taking the property loan will not be subject to any haircut.

Eligibility Conditions to buy EC

Executive Condominiums (EC) were introduced to cater to the Singaporeans who can afford more than a HDB flat but find private property out of their reach. ECs are comparable in design and facilities to private condominiums as they are developed and sold by private developers.

However, buyers still have to meet the eligibility criteria when buying an EC unit. More information can be found on HDB website here.