Commonly Asked Questions When Buying A New Condo In Singapore
Buying a condominium for the first time can be overwhelming with the legality issues, requirements, terminologies, confusing rules and difficult procedures involved. But, to make the process more comfortable for you, here is a list of most frequent questions asked alongside their answers concerning the acquisition of new condo in Singapore.
If you are a first-time buyer of a new condo in Singapore, then you will find these comprehensive FAQs handy in providing you with knowledge about the whole acquisition process. It is important to remember that the rules and regulations are subject to change depending on the developer. This is why it is important to seek advice from your real estate agent to get everything right.
What is a condo?
What facilities do condominiums offer?
While the facilities could vary with respect to the developer some of the common facilities include viewing deck, concierge, clubhouse, BBQ areas, tennis court, car parks, function rooms, gym, swimming pools, etc. Such project details are announced by the developers when launching the condo like the Kent Ridge Hill Residences Condo.
What is a dual-key condo unit?
What types of Condo are found in Singapore?
- Mass-market condos – they are relatively expensive and found in the suburbs.
- Mid-market condos – contain many facilities than mass market units and commonly located in prime fringe locations.
- High-end Condos – often come with deluxe amenities and located in prime districts.
Qualifications to buying a New Condo in Singapore
Who can buy a new condo in Singapore?
Condos in Singapore are open to all permanent residents or citizens of Singapore. Buyers are required to provide the necessary documents and show evidence of financial capability.
What are the qualification requirements?
Here are the qualifications that residents must meet:
- Complete the Minimum Occupation Period since the date you acquired ownership, usually five years for DBSS, HBD flats, and ECs.
- Inform the HDB of your local private residential property before exercising OTP.
- Sell your flat in less than 6 months after purchasing the private property.
Am I allowed to purchase a condo if I own a DBSS, HDB flat or EC?
Yes, it’s allowable as long as you are eligible as per the above conditions.
Application Procedures and Cancellation
What documents do I need for booking a new condo?
To book a new condo, you should have the following documents:
- Copy of NRIC.
- Expression of Interest form (EOI) completed and signed
- A cheque for paying the developer with their project account name.
However, the required documents could vary since they are subject to developer’s decision but if you fail to buy the unit during the launch, you should be given back the documents you provided.
What is meant by Option to Purchase (OTP)?
The Option to Purchase is an agreement providing the buyer with a 14-day exclusivity period, and other buyers cannot be offered the condo within that period. It attracts a 1% payment of the property price serving as a good faith deposit.
Is The Offer to Purchase similar to OTP?
No. The Offer to Purchase is a method used by sure buyers to secure the condo by bypassing the OTP stage. It usually demands a 5-10% deposit that safeguards the property.
What is a Sale and Purchase Agreement?
This is a legal contract between the buyer and the developer and should be accomplished in less than 10 weeks after signing the OTP. You are required to make the 10-20% payment of the total purchase price. Any option monies committed will be deducted from the down payment.
What is the procedure for buying a new condo?
- Start by choosing a real estate agent and book the new condo unit.
- Pick the unit type on the Showflat.
- Proceed with the Option to Purchase and pay the deposit fee.
- Sign the Sale and Purchase Agreement to execute the purchase.
- Pay the stamps and al the taxes linked to property purchase.
- Complete the remaining amount through a home loan or cash.
- Wait to receive a notice of Vacant Possession prior to taking ownership.
- The end of the sale is marked by receiving the Notice to Complete.
Am I allowed to cancel the booking after making a reservation?
You are allowed to cancel the booking if you want to, but the developer might forfeit 25% of the amount paid for booking.
What is the forfeiture if I cancel the agreement?
Where the OTP is not used, the developer can forfeit 25 percent of the booking charges with a refund of the rest 75%. The developer has the right of forfeiting only 20% of the purchase fee, recover the remaining interest and resell the condo to any other buyer in the case of termination of a Sale and Purchase Agreement,
Where can I get financing?
The recommended financing options for buying a new private condo include loans offered by financial institutions and bank loans. HDB concessionary loan is not offered for private properties.
Which home loans are available?
Most financial institutions and banks offer two types of loans; floating/variable home loan or fixed rate home loan.
What other costs involved when buying a new condo in Singapore?
Apart from the down payment, there are other costs that you might have to incur:
- Buyer’s Stamp Duty:
- Valuation Fees – $350-500 (required for a bank loan).
- Legal/Agent Fees – anywhere from $2,500-3,000.
- Additional Buyer’s Stamp Duty
- Stamp Duty for Mortgage Documents – 0.4% to be paid to IRAS (capped to $500).
Am I eligible for any CPF housing grant?
Yes, you can be awarded a grant since condos are public-private hybrid properties.
Can I pay the down payment using CPF?
Yes, you are allowed to use CPF to make payments for private condos, but the maximum amount is limited to 15%, the other 5% should be paid in the form of cash.
Can I use my CPF to pay for the extra charges involved?
Yes, you can use the CPF savings to pay the extra charges associated with the condo purchase.
Do I need to refund CPF after reselling my condo?
If you used the CPF in financing your private condo, then you need to repay the principal amount and the accural interests.
What does new launch condo mean?
These are new condos being launched by the developers. The units can be at different stages of development and could take approximately 1 to 4 years to complete depending on the developer.
How about recently TOP?
These are private condos which have been awarded Temporary Occupation Permit (TOP) implying that they are ready for occupation.
What is the TOP?
This is a legal document that shows that approves the condo for occupation. The Certificate of Statutory Completion (CSC) is a permanent version of TOP.
Will I get a certificate of title?
After completion of payment, you will be issued with a Subsidiary Strata Certificate of Title for a private condo. The document is issued by the Singapore Land Authority.