17 May 2023
SOURCE: CPF Board
Moving into a new place, especially for the first time, is always an exciting milestone. As you prepare to buy your first home, you would have likely saved and planned diligently for the downpayment, mortgage, furniture, renovation as well as your future needs.
Are you already browsing online for the perfect sofa set that will complement the aesthetic of your dream home? Before you make that purchase, don’t forget about these lesser known (but no less important) expenses that may incur at different stages of your home purchase. Read more about the expenses at each stage of becoming a homeowner.
1. Applying for flat
Application fee
The first thing you have to pay when you buy a HDB flat is the application fee:
- BTO flat: $10
- Resale flat: $40 (1- and 2-room), $80 (3-room and bigger)
This can be paid through the HDB website using your credit card or through any of the supporting mobile payment apps.
2. Confirming your flat
Option fee
Once you’ve identified your ideal HDB flat, the next step is to pay the option fee to secure your home.
Flat type | Option Fee |
BTO 4-room and bigger | $2,000 |
BTO 3-room | $1,000 |
BTO 2-room Flexi | $500 |
Resale Flat | Not exceeding $1,000 |
3. Signing the agreement for your flat
Stamp duty
When you secure your new flat, you’ll need to pay Buyer’s Stamp Duty (BSD),which is the tax payable on the documents relating to the purchase. This is based on the selling price of the flat and must be paid upfront alongside several other legal fees. In the case of a4-room HDB flat, this can cost over $5,000.
The amount payable is calculated as such:
- First $180,000: 1%
- Next $180,000: 2%
- Next $640,000: 3%
- Remaining amount: 4%
Tip
You can use the Stamp Duty Calculator to calculate the stamp duty payable for your flat purchase.
If you are a Singapore Citizen who is buying your second and subsequent residential property, a Singaporean Permanent Resident (PR) or foreigner, you are liable to pay Additional Buyer’s Stamp Duty (ABSD) on top of the existing BSD.
Note: As part of the latest residential property cooling measures, ABSD rates were raised from 27 April 2023 with immediate effect. Find out more details about the new ABSD rates.
If you appoint HDB to act for you in the purchase and/or the mortgage of your flat, you’ll need to pay legal fees including the HDB Conveyance fee and Registration fees:
HDB Conveyancing fee
This is calculated as such:
- First $30,000: $0.90 per $1,000
- Next $30,000: $0.72 per $1,000
- Remaining Amount: $0.60 per $1,000
Note: The fee is rounded up to the next dollar, before applying GST. The minimum legal fee chargeable is $21.60 (inclusive of GST).
Registration and microfilming fees
- Lease In-Escrow registration fee: $38.30 (fixed amount)
- Mortgage In-Escrow registration fee (if you are taking a home loan): $38.30 (fixed amount)
- Title search fee: $32
HDB Caveat Registration fee
The caveat is an official notice to the Singapore Land Authority to protect your interest in the flat. This will cost $128.90 (inclusive of GST).
Survey fee
You would need to pay asurvey feeto the surveyor inspecting the condition and value of your flat. It costs between $162 and $405 depending on the flat type you are buying.
Tip
To get a quick estimate of the legal fees to pay, you can useHDB’s Legal Fees Enquiry Facility.
You can tap on your CPF Ordinary Account (OA) savings* to pay the legal fees and stamp duty in full. For stamp duty of a property that is already completed, you can pay cash first and get reimbursed from your CPF account later. If the property is still under construction, you can pay the stamp duty directly through your CPF.
*When you sell your flat, you’ll need to refund the money from your OA that was used for your home purchase. This includes the legal fees and stamp duty.
If you are taking a bank loan, you will have to appoint an external solicitor to handle the entire process. The cost can range from $2,500 - $3,000 on average. You can pay this with cash or CPF but do check with the law-firm if you can pay in full using your CPF.
4. Living in your flat
There are other costs that you will need to consider and set aside a budget for on a monthly or annual basis. Here’s an overview of the recurring costs of owning a HDB flat, using a 4-room flat as an example:
(1)​ Premium is calculated based on a 35-year-old man taking a $300,000 HDB loan with a loan term of 30 years at 100% coverage.
(2)Based off average property tax payable in 2023.
(3)Based on Town Councils’ reduced rates for 4-room HDB flats.
(4)Based on National Average Household Consumption (SP Group).
HDB Fire Insurance
Since 1 September 1994, HDB has made it mandatory for homeowners to buy and renew the HDB fire insurance for your homes for as long as you have an outstanding HDB loan.
Depending on the size of your flat, a five-year premium ranges from $1.62 to $8.18.
Home Protection Scheme (HPS)
The Home Protection Scheme (HPS) is a mortgage-reducing insurance that protects you and your loved ones from losing their HDB flat in the event of death, terminal illness or total permanent disability.​ You are insured by HPS until you fully redeem your housing loan or when you turn 65, whichever is earlier.
You can pay the annual premiums using your CPF savings or cash. Do note that if you are using your CPF savings to pay for your monthly mortgage instalments, HPS is required.
Tip
You can estimate your HPS premium amount with theHome Protection Scheme Premium Calculator.
Property tax
Property tax is defined as a wealth tax. This means owning a property makes you liable for property tax, regardless of whether the property is occupied or not.
The tax is calculated by multiplying the Annual Value (AV) of the property with the prevailing property tax rate. The AV of the property refers to an estimate of how much gross annual rental income your property can fetch in the year. It is determined based on market rentals of similar or comparable properties.
Tip
It was announced in Budget 2022 thatproperty tax ratesfor owner-occupied and non-owner-occupied residential properties will be raised from 2023 and 2024. Get an estimate of how much property tax you need to pay using the property tax calculator.
Service & Conservancy Charges (S&CCs)
S&CCs are a vital component of maintaining the cleanliness, hygiene and upkeep of HDB estates. Town councils collect monthly fees from HDB flat owners to cover the costs of cleaning common areas and maintaining equipment such as lifts. This is an essential aspect of maintaining the quality of life and ensuring a smooth running of residential areas.
Depending on the size of your flat, the S&CCs typically range from $20 to $101 per month after taking into account the reduced fees for Singaporeans who own and occupy the flat without ownership of any private property.
Utilities and maintenance
To avoid racking up higher utility bills, be mindful of the energy consumption in your household. Here are some tips:
- Turn off electrical appliances when not in use - for example, turn off the air-conditioning when you leave the room or switch off the television when you are not watching it.
- Use energy-efficient appliances: consider purchasing energy-efficient appliances, especially for energy guzzlers like refrigerators, air-conditioners, and washing machines. These appliances are designed to consume less energy and can help you save money in the long run.
- Practice water conservation: try to use less water whenever possible. For example, take shorter showers or install water-saving devices such as low-flow showerheads and taps.
Consider setting aside a maintenance fund for your home. Wear and tear will set in over time, and there will be a list of items that require repair or replacement. Regular maintenance of your appliances can help prolong their lifespan and ensure they run efficiently. For example, clean the filters of your air-conditioner regularly to prevent energy wastage.
Regular cleaning and maintenance of your flat can help prevent damage and ensure a comfortable living environment.
Plan ahead for the expenses beyond your monthly mortgage payment, as these costs can add up. With careful monitoring and wise management of your expenses, you can ensure a comfortable living environment without underestimating these costs.
Information accurate of as of date of publication.
FAQs
How much CPF can be used for housing? ›
CPF members who purchase an HDB flat and take an HDB loan can choose to retain up to $20,000 in their Ordinary Account (OA), with the remainder going towards their housing loan payment. Buyers taking a bank loan can choose to retain any amount of their OA savings.
Can I use CPF to pay Option Fee? ›option fee has to be paid in cash for resale HDB purchase. You can use CPF or cash for your mortgage repayment.
Is it better to use CPF or cash for housing? ›Assuming that the monthly repayment for your home loan is 20% of your monthly salary, paying with CPF Savings means that the 20% needed to foot your home loan does not come from your take-home salary. This leaves you with more cash-on-hand to save or pay for expenses apart from your mortgage loan.
What is the Option Fee and exercise fee for HDB? ›Exercising The Option To Purchase (OTP)
Within the option period, the buyer can choose to exercise the OTP. For private properties, this is usually 4% of the sales price. Along with the option fee (1%), this would form the balance deposit which is typically 5%. For HDB flats, the balance deposit cannot exceed $5,000.
Limitations on the amount you can use from your CPF savings to pay is limited by many factors including your monthly repayment must be no more than 30% of your monthly income as it is subject to Mortgage Servicing Ratio (MSR) terms and the Total Debt Servicing Ratio (TDSR) calculation.
What can I use CPF for? ›- Retirement.
- Home ownership.
- Healthcare.
- Providing for your loved ones.
- Self-employment.
- Investment.
- Education.
- Child.
If a buyer backs out after having already signed the Option to Purchase, the Option Fee is forfeited to the seller (same as above). If a seller backs out after having already signed the Option to Purchase, the seller has to refund the Option Fee to the buyer.
Is it worth using CPF to buy T bills? ›Savers can lose more than six months of CPF accrued interest when choosing to use their CPF savings to invest in T-bills. As CNA reported, to participate in a T-bill auction at the end of October 2022, you would have to put in a bid before the auction date (27 Oct 2022).
Can I fully pay HDB with CPF? ›An HDB loan requires you to make a downpayment of at least 10% of the purchase price, which you can pay in full using your CPF Ordinary Account (OA) savings, with cash or a combination of both cash and OA savings.
Should you use CPF for housing? ›CPF is meant for your retirement needs. When you used your CPF savings for your property, your retirement savings is reduced. Hence, when you sell your property, you will need to refund the amount that you have used plus the interest accrued on this amount. This is to restore your retirement savings.
Should I pledge my house to CPF? ›
You'll have to “pledge” your property to CPF so that CPF can count your property value as part of your total savings. If you sell your home in the future, you'll need to refund the sale proceeds to your CPF account — up until it hits the Full Retirement Sum.
How much CPF money should I have? ›...
How Much CPF Savings Should You Have, Based On Your Age.
| Age Group We Are In | Median CPF Savings Range |
|---|---|
| >25 to 30 | $40,000 to below $60,000 |
| >30 to 35 | $120,000 to below $140,000 |
| >35 to 40 | $180,000 to below $200,000 |
| >40 to 45 | $240,000 to below $260,000 |
1% of the sales price. Thus, for a home with a sales price of $300,000, a $300 option fee is generally an acceptable amount for a 7 day option period.
What is the maximum option fee for new HDB? ›...
Deposit to sellers.
| Payment | When to Make Payment | Amount to Pay (in Cash) |
|---|---|---|
| Option Fee | Granting of OTP | $1 to $1,000 |
You must pay a deposit to the sellers, comprising the Option Fee and Option Exercise Fee, which are payable at different points during the OTP process. You may negotiate the amount for the Option Fee and the Option Exercise Fee with the sellers, and it will form part of the resale price.
How many times can I withdraw from CPF after 55? ›You can make as many withdrawals as you like from your withdrawable savings. So there's no need to take everything in one go.
Can I use CPF to buy condo? ›A: You can use your CPF Ordinary Account funds to pay for your condo downpayment, which is approximately 20% of the purchase price.
Can I borrow money from my CPF? ›With your CPF savings, you can quickly and conveniently apply for this loan. With a CPF personal loan, you can borrow up to 6 times your monthly salary at low interest rates of up to 4% per month. You may repay the loan as soon as you withdraw a lump sum from your Ordinary or Special CPF account.
What can you not use CPF for? ›Additional conditions on the use of CPF savings for purchase of land and construction of house. a. CPF savings cannot be used to pay the land and/or the construction cost of the house directly.
How much is CPF monthly payout? ›1 Assumes male member under CPF LIFE Standard Plan, starting payouts at age 65. With these increases, the BRS payouts for male members turning age 55 in 2027 on the CPF LIFE Standard Plan will be close to $1,000 per month when they turn 65, up from about $850 per month for male members turning age 55 in 2022.
What are the 3 CPF accounts? ›
Build up your CPF savings by making voluntary contributions to all your three CPF accounts (Ordinary, Special and MediSave accounts).
Who receives the option fee? ›In a real estate context, an option fee is money paid by a Buyer to a Seller for the option to terminate a real estate contract. Option fee funds should not be confused with earnest money.
How do options fees work? ›Options contracts usually represent 100 shares of the underlying security. The buyer pays a premium fee for each contract.1 For example, if an option has a premium of 35 cents per contract, buying one option costs $35 ($0.35 x 100 = $35).
Why do option buyers lose money? ›An option buyer usually buys because of limited capital unlike an option seller. An option buyer can make limited losses to the extent of the premium paid to buy the option. However, a wrong analysis of the direction or trading strategy could result in heavy losses for the buyer.
Is CPF good or bad? ›The great thing about the CPF is that returns are absolute. If the SA interest rate is 5%, then you get 5%, regardless of how well or how badly Singapore is doing. Coupled with the fact that it's guaranteed by the Singapore government, this is one of the safest investments available to you.
What is the difference between T-bills and CPF? ›The latest 6-month T-bill is at 3.88% p.a., a 1.38% p.a. difference when we compare that to the interest rate of 2.5% that we get in our CPF Ordinary Account (CPF-OA). However, there are a few key differences aside from just the interest rates that investors must know of before locking up their money in T-bills.
What is better than T-bills? ›Treasury bonds tend to pay higher interest than the shorter T-bills and notes to compensate investors for the interest rate risks they take with their purchase. Keep in mind the opposite can also happen when interest rates fall and the price of your bond increases.
What happens to my CPF account when I turn 55? ›When you turn 55, we will transfer your CPF savings, up to your Full Retirement Sum (FRS), to create your Retirement Account (RA). The savings in your RA is meant to provide you with payouts in retirement. Your Special Account (SA) savings will be transferred first, followed by your Ordinary Account (OA) savings.
Can I do CPF housing refund after 55? ›If you're 55 years old and above, the amount refunded to your CPF savings will be used to meet your Full Retirement Sum in your Retirement Account. Any balance amount will be paid to you in cash within a week after refunds are credited into your CPF account.
How much downpayment for HDB with CPF? ›If you are taking an HDB loan, the LTV is 90% of the flat's value. The remaining 10% is the required down payment which you can use your CPF Ordinary Account (OA) savings to pay for in full. The LTV for a bank loan is 75% of the flat's value. You are required to pay at least 5% in cash.
How much CPF should I have at 30? ›
'Your age' play: The traditional 'balanced portfolio' play. If you are 30, you can have 30% of your net worth in CPF. 40, 40%. 60, 60%.
Can I transfer CPF to my spouse? ›You can write to CPF Board to specify the CPF accounts from which to transfer to your spouse, parents and/or grandparents. Please note that if you use your RA savings6 for the transfer, the sum of your RA savings and property5 may be less than your FRS.
How much will I get if I pledge my property in Singapore? ›Anyone who owns a property can pledge up to his share of the residual value of the property. The property needs to have more than 30 years of remaining lease and must not be a 2-room flexi or lease buyback scheme flat. A maximum of $83,000 can be pledged out of the minimum sum of $166,000 (Basic Retirement Sum).
What is the minimum sum for CPF 2023? ›Starting in June 2023, the minimum monthly payout for non-CPF LIFE members (i.e. those enrolled in the Retirement Sum Scheme) will increase from $250 to $350. There is no change for members already receiving monthly payouts of $350 or more.
What happens to my CPF when I turn 65? ›Your savings from your SA and OA, up to the current FRS of $198,800 (as of 2023), will be transferred to your RA to form your retirement sum. These funds are then set aside, and compounded, for the next 10 years, for the purpose of contributing into the CPF LIFE scheme when you turn age 65 (or latest, by age 70).
How to get 1 million in CPF? ›As a result, CPF members aged 55 and above will earn up to 6% interest per year on their retirement balance. In order to accumulate a million dollars in your CPF, the key is to move the lower interest OA money into your SA. Then, the compounding effect of 5% per annum builds up your cash reserves faster.
How long can I keep money in CPF? ›Withdraw your CPF later
* The property you own must have remaining lease that can last you till age 95. However, it is not a must to take out your CPF savings when you reach 55 — you can do so at any time after that. You can also make a partial withdrawal, leaving some funds in your account for future use.
There is a maximum for CPF LIFE: It's pegged to the Enhanced Retirement Sum ($288,000 this year). So for those who are 55 this year, the highest CPF LIFE payout is $2,120 to $2,280 a month. And that's for the Standard plan. If you opt for the Escalating plan, it will be even lower.
Is option pricing difficult? ›Option pricing is a difficult aspect of derivative trading. Due to the number of factors influencing the price of an asset and the difficulty of predicting the final price of an asset, the price of an option is very hard to determine.
How do I know if my option contract is expensive? ›When it comes to the price of an option, the amount of time that the option has until expiration and the level of its implied volatility are two of the main factors that play into whether the option's price is actually cheap or expensive.
How do you know if options are expensive? ›
An option is only "cheap" or "under priced" if you expect implied volatility to increase.? Conversely, an option is only "expensive" or "over priced" if you expect implied volatility to fall.
Can I use CPF to pay for hip? ›HDB homeowners will only need to pay HDB HIP upgrading costs upon completion of the upgrade. Payment can be made via cash, cash or a combination of both cash and CPF.
What is the maximum loss for option seller? ›What is the Maximum Loss Possible When Selling a Put? The maximum loss possible when selling or writing a put is equal to the strike price less the premium received.
What can be the maximum loss to an option buyer? ›The maximum loss of the call option buyer is the maximum profit of the call option seller. Likewise, the call option buyer has unlimited profit potential, mirroring this the call option seller has maximum loss potential.
What happens after paying option fee? ›Exercising The Option To Purchase (OTP)
For HDB flats, the balance deposit cannot exceed $5,000. This includes the option fee that has been paid ($1,000). Once the option has been exercised, the buyer has legally agreed to purchase the property and cannot back out from the property transaction.
The buyer must deliver the option fee to the title company within three days after the effective date of the contract.
Is it better to pay off HDB loan early? ›By paying your home loan early, you would reduce your outstanding loan balance and hence, eliminate interest payments. It will reduce the amount of cash required to meet your monthly expenses, thus helping you save significant money every month.
Can I pay housing loan using CPF? ›CPF. You must be the flat owner in order to use CPF savings for housing loan payments. To authorise the monthly deductions from your CPF account to pay for your housing loan instalments, you will need to submit a CPF withdrawal application.
How much CPF can I deposit? ›Top-up limit
The maximum amount you can top up is the difference between the CPF Annual Limit of $37,740 and the mandatory CPF contributions made for the calendar year. Do remember to consider your mandatory CPF contributions which you will be receiving for the calendar year, before making top-ups.
Besides receiving monthly payouts in your retirement, you can also make withdrawals of your CPF savings from 55, for both planned and unplanned, or emergency expenses. You may need extra funds from time to time. Ad hoc withdrawals give you extra flexibility to access funds when you need them.
How much CPF can I use for condo? ›
This 20% downpayment can be paid with monies from your CPF OA account. If the lease does not cover the youngest owner using CPF till the age of 95, the maximum amount of CPF OA savings that can be used will be pro-rated. You can check the amount available to you by using the CPF housing usage calculator.
What happens when CPF SA is full? ›Your savings from your CPF Special Account (SA) and then Ordinary Account (OA) will be transferred to your RA up to the Full Retirement Sum (FRS) You can top-up your RA to the Enhanced Retirement Sum (ERS) from age 55.
What is the interest rate for CPF in 2023? ›The SMA interest rate will be maintained at 4% per annum from 1 April 2023 to 30 June 2023. The RA interest rate will be maintained at 4% per annum from 1 January 2023 to 31 December 2023, as announced on 29 November 2022. CPF members can visit cpf.gov.sg or contact CPF Board through cpf.gov.sg/writetous for enquiries.
What are the three accounts of CPF? ›Your CPF accounts
As you work and make CPF contributions, you accumulate savings in these three accounts: your Ordinary Account (OA), MediSave Account (MA), and Special Account (SA). At age 55, a Retirement Account (RA) is created for you.
Make an appointment to visit the CPF Service Centre to submit your form in person. Bring along your completed form and all required supporting documents.
Can I keep my CPF after leaving Singapore? ›You can also withdraw your CPF in full if you are about to leave or have left Singapore and West Malaysia permanently with no intention to either country for employment or residence.
What happens if I can't meet my CPF minimum sum? ›What if I can't meet the Basic Retirement Sum? If you can't even meet the Basic Retirement Sum, your situation will be a little different when you turn 55. $5,000 or less: For those who have $5,000 or less in their entire Retirement Account, you can withdraw the entire amount when you turn 55.