Updated: 4 March 2021
After living in a Housing & Development Board (HDB) flat for several years, have you been thinking about moving into a condominium? One fine day while house hunting, you stumble across a new launch condo which ticks all the boxes of your dream home. You want to secure a unit before it’s off the market, but you have not sold your flat yet. You’re thinking: Is it possible to do so? The answer is: Yes.
In this article, we will be talking about buying your new launch condo unit first, then selling your HDB flat later, along with the requirements and restrictions that the government has put in place.
Not sure where to start with your journey? Ohmyhome’s Private Sales Manager, Louis Tay, describes the steps that you need to follow when buying a new launch condo after selling your HDB flat.
8 Simple Steps for Buying a New Launch Condo Before Selling Your HDB Flat
Step 1: Ensure you have met your Minimum Occupation Period
Minimum Occupation Period (MOP) requires you to physically occupy your HDB flat before you can sell it in the open market and invest in private property, both local and overseas.
The keyword here is to “physically occupy,” which excludes any period that you did not occupy the flat. You can check your eligibility to sell by registering your Intent to Sell on the HDB resale portal.
Step 2: Start your financial planning
Check the maximum home loan amount and property purchase price you can comfortably afford based on your income, age and loan commitments.
Total Debt Servicing Ratio (TDSR) – The TDSR was introduced as part of the property cooling measures. It aims to prevent borrowers from being over-extended with their loans. The current TDSR is 60%, which means you cannot use more than 60% of your gross monthly income to service your total loans. This includes car loans, home loans, and even credit cards.
Loan-to-Value (LTV) Ratio – For your first housing loan, you can get up to 75% LTV ratio with a bank loan. However, the LTV is drastically reduced when it comes to the second housing loan.
Take note that if you have outstanding home loans that you haven’t paid off, and you are still looking to buy your second property, the LTV limit is 45%. If you are buying your third property, the LTV limit is 35%.
For owners who have used or are using CPF for an existing property, they must set aside half of the prevailing CPF Minimum Sum before they can use the excess savings in their Ordinary Account for the second or subsequent property. Savings in the Special Account (including the amount used for investments) and Ordinary Account can be used to meet half of the prevailing Minimum Sum.
Please note that as the CPF Minimum Sum will be raised in July each year, the amount you need to set aside will be adjusted accordingly. You can check the latest CPF minimum sum online.
In this step, you should also get an approval-in-principle (AIP) from a bank.
Ohmyhome has in-house mortgage specialists to assist you with comparing home loan packages across different banks. We’ll find you the best rate tailored to your needs, free of charge!
Step 3: Shortlist new launch condos and make appointments to visit show flats
Currently, due to the COVID-19 pandemic, appointments are mandatory as the government has implemented tighter social-distancing measures. The best part of setting an appointment with one of our Super Agents? We can give you a fruitful tour, with exclusive and unbiased property insights.
When you are buying your new launch condo unit, Ohmyhome Super Agents can guide you through the purchase process, and also take the burden of researching available developments off your shoulders.
One Pearl Bank, TOP 2023
Step 4: Pay the booking fee for your new launch condo unit
Found your dream condo? When buying a new launch condo unit in Singapore, you need to pay 5% (cash only) upon booking and signing the Option to Purchase (OTP).
The OTP will be given to you at this point, and you’ll be deemed to have officially booked a unit. This means you’ll forfeit a portion of your booking fee (usually 25%) if you abort the purchase.
When you have a copy of the OTP, you can then finalise your loan for the new launch condo. The bank which you are taking the loan from will issue you the Letter of Offer – the official name for the document containing the terms on which the bank is offering you a loan.
Next, you’ll also need to appoint a solicitor to act for you in the purchase and take care of the conveyancing matters.
Step 5: Sign the Sales & Purchase Agreement
- Within two weeks after receiving the OTP, the developer will deliver the Sales & Purchase Agreement (S&P).
- Within three weeks after receiving the S&P, you’ll have to sign the S&P and exercise the OTP.
- Within eight weeks from signing OTP, you’ll have to pay the rest of the 15% (cash or CPF) down payment (aka exercise fee).
- Within two weeks from signing S&P, you’ll also have to pay the Buyer’s Stamp Duty (BSD).
BSD is a tax that every home buyer has to pay when they purchase property. The BSD amount depends on the property price. The more expensive the property, the higher the tax.
For residential properties, you will be charged with the following:
- 1% for the first $180,000
- 2% for the next $180,000
- 3% for the next $640,000
- 4% for the remaining amount
ABSD is imposed on top of the BSD, and applied to the purchase price or the current market value of the property, whichever is higher.
|Profile of Buyer||ABSD Rates on/ after 6 Jul 2018|
|Singapore Citizens (SC)||First Residential Property||Not Applicable|
|Second Residential Property||12%|
|Third Residential Property||15%||Singapore Permanent Residents (SPR)||First Residential Property||5%|
|Second Residential Property||15%||Foreigners (FR)||First and Subsequent Residential Property||20%|
Step 6: Start marketing your HDB flat
You can either sell your flat on your own using the Ohmyhome app at Play Store or App Store, or you can engage a property agent with Ohmyhome to market your HDB flat. Our platform allows you to list your flat in the open market. Once the right buyer makes an offer, you can go through the HDB resale process.
You can only get the remission of your Additional Buyer Stamp Duty (ABSD) if your HDB flat is sold (upon receiving the exercised OTP from the buyer) within six months after the issue date of the Temporary Occupation Permit (TOP)/Certificate of Statutory Completion (CSC), whichever is later, if the property was uncompleted at the time of purchase.
Step 7: Hand over your HDB flat
On the HDB completion appointment date, you need to hand over your HDB flat to the new owners. If your new property is not yet ready, you will need to find temporary living arrangements like a rental unit or the home of your parents or relatives.
Step 8: Collect the keys to your new home
On the TOP, you will be informed by the developer and will be assigned for a date to collect the keys of your new property. This successfully ends the process of buying your new launch condo after selling your HDB flat.
Payment Schedule for Building Under Construction (BUC)
If you’re planning to buy a new launch condo, here’s the payment schedule if you purchase a BUC or uncompleted property:
|Stage||Percentage of Payment|
|Booking Fee (cash only)||5%|
|Within 8 weeks from date of option to purchase (Cash or CPF)||15%|
BSD (Within 2 weeks from signing the S&P Agreement)
(On or after 20 Feb 2018)
*Buyer’s Stamp Duty is computed based on the purchase price or market value of the property, whichever is higher.
|First $180,000: 1%
Next $180,000: 2%
Next $640,000: 3%
Remaining Amount: 4%
|ABSD (Within 2 weeks from signing the S&P Agreement)
(ABSD rates from 6 July 2018)
1st residential property: N.A
2nd residential property: 12%
3rd residential property: 15%
|Foundation work (Est. 6-9 months)||10%
(5% Cash or CPF)
(5% from Bank loan)
|Reinforced concrete framework (Est. 6-9 months)||10%|
|Partition walls (Est. 3-6 months)||5%|
|Roofing (Est. 3-6 months)||5%|
|Door, window frames, electrical wiring (without fittings), Piping (Est. 3-6 months)||5%|
|Car park, roads and drains serving the housing project (Est. 3-6 months)||5%|
|Building, roads and drainage and sewerage works in the housing estate, connection of water, electricity and gas supplies
Ohmyhome platform allows you to list your flat in the open market. Once the right buyer makes an offer, you can go through the HDB resale process.
|Final Payment Date and/or Completion (might be staggered further depending on when the Certificate of Statutory Completion is issued) (Est. 1-12 months)||15%|
*You can use your CPF Ordinary Account money to pay stamp duty and legal fees. Please note that due to the short timeline to have to pay BSD/ABSD, you will have to pay in cash first and get reimbursed later via CPF as CPF board is unable to disburse within the stipulated time frame.
Now that you have an overview of the steps to buy a new launch condo before selling your HDB flat, you’re all set to start your housing journey.
Bear in mind the factors to consider when buying a new condo – the location (accessibility and amenities), unit size, facilities, interior of the condo, capital appreciation (based on upcoming developments), current market situation, rentability, environment (i.e. noise level), and developer track record.
Already considering buying a new launch condo unit? Thinking of selling your flat soon? We have mortgage specialists and property agents who can help you with both transactions.
VIP Service for Buyers at $0 Agent Fees
Our real estate consultants will provide you with a thorough financial calculation, assist you with everything you need to know from BSD, ABSD, exercising the OTP to choosing the right property and unit to buy.
Buy your dream home at $0 agent fee!