Ever since the government implemented the Cash over Valuation implementation, many Singaporeans have gone back to buying HDB resale flats. Are you planning to upgrade your current house or planning to move to a place nearer to your workplace?
There are many Toa Payoh HDB units that you can have a look. This article will guide you through the actual cost for buying a resale HDB flat.
1. Grant of option
Also known as the booking fee, this will cost approximately $1,000 and it has to be paid by cash.
2. Valuation fee
The valuation fee varies depending on the size of the flat. The valuation fees for a 1 bedroom or 2 bedrooms flat will cost $140.40 whereas the valuation fees for a 3 bedrooms or bigger flat will cost $199.25.
The payment for deposit will have to be done within 21 days and it costs approximately $4,000 to $4,999.
4. Application fee
The application fee for a 1 bedroom flat or a 2 bedrooms flat cost $40 whereas the application fee for a 3 bedrooms or bigger flat will cost $80.
5. Initial payment
The initial payment for the resale HDB flat will be a 10% of the purchase price if the buyer is under a HDB loan and using his or her CPF.
The initial payment for a resale HDB flat will be 20% of the purchase price if the buyer is using a bank loan instead.
6. Stamp duty
You are required to pay for stamp duty if you buy a new HDB flat. Stamp duty is calculated based on the selling price of the HDB flat:
First $180,000: 1%
Next $180,000: 2%
Remaining amount: 3%
7. Additional Buyer’s Stamp Duty
Certain home buyers will need to pay for the Additional Buyer’s Stamp Duty (ABSD) on top of the Basic Stamp Duty:
Let us say if the property is bought by both Singapore Permanent Citizen and Singapore Citizen, the ABSD rate will then be higher.
8. Conveyance legal fees
The conveyancing fee cover costs such as the registration of land titles and deeds. The amount payable is as below:
1st $30,000: $13.50 per $100
2nd $30,000: $10.80 per $100
Remainder: $0.09 per $100
As for the legal fees, it will cost $2,300.
9. Caveat registration fees
The caveat registration fee is payable when you sign the Agreement for Lease and it would cost $64.45.
10. Registration fees
The registration fee for both the leave in-escrow and mortgage in-escrow is $38.30.
11. Title search fees
The title search fees are $10.40.
12. Home protection scheme
The fees for home protection scheme varies depending on the loan amount, type of loan, duration of loan and gender. You could also check out more on the home protection scheme available online.
13. Fire insurance
The HDB Fire Insurance Scheme is introduced to help with financial burden in case of any unfortunate event of fire. The price for the insurance will start from $1.50 for a 1 bedroom flat to $7.50 for a multi generation flat. This insurance is valid for 5 years and renewal is to be done once every 5 years.
14. Balance of purchase price
Lastly, you will have to pay off the balance of the purchase price for your property.
Let us use an example to understand it better. Aaron and Andrea is a newlywed Singaporean couple in their 20s. Both of them have a combined monthly income of $6,000 every month and they are looking to buy a 3 bedrooms resale HDB flat that costs $400,000. They both have a total of $20,000 in their respective CPF accounts and are qualified for a Family grant with a total of $30,000.
They have also decided to engage with HDB loan that covers 90% of the property purchase price with a loan tenure of 25 years. In addition, they will also need to pay $1,000 as their Booking Fee for the Option. The remaining loan instalments will be paid by using the CPF amount in their accounts.
Based on the costs that I have listed above, the total amount that Aaron and Andrea will have to pay would be $3850.22 if they decide to use an HDB loan.
HDB loan: $355,000
If Aaron and Andrea are using a bank loan, they will be entitled for a 80% bank loan for the total purchase price. In addition, they will have to pay $2,500 for external lawyer services.
Based on the costs breakdown above, Aaron and Andrea’s final obligation will be $45,120.81 if they use a bank loan.
HDB loan: $315,000
In conclusion, you will have to take all these costs into account before you decide to buy a resale HDB flat. Make sure you plan your budget accordingly to prevent falling into a financial debt after you bought your resale HDB flat.