The Hidden Costs of Buying a residential property in Singapore for first time buyers



Before you sign the dotted line for your property, read this first.



You are ready for your first property purchase. Regardless if you are targetting for HDB or Private Property, there are other costs to consider than just the selling price.



Property Selling Price 
The property selling price would be the main determinate in price. That would set the ball rolling for other 'hidden' fees in a property transaction. The property selling price would determine the option fee and the loan that you can take (downpayment). Since Option Fee and Downpayment are not hidden costs, we will not go in full details for them.

Option Fee
The option fee is payable for you to reserve the property. The fee would dependant on if you are purchasing an HDB or a private property. For private property and EC, the fee would be 5% or 10%. For HDB, the breakdown would be dependant on the type of HDB bought, this is not a hidden cost and will contribute to the final payment made for the property.
HDB Cost and fee can be found here.

During Purchase



Buyer's Stamp Duty
You are required to pay buyer's stamp duty ( BSD) for documents executed for the sale and purchase of property in Singapore. This is on top of the purchase price you paid.

The rates for BSD from Feb 2018 are as follows

Purchase Price                                BSD Rates 
First $180 000                                         1%
Next $180 000                                         2%
Next $640 000                                         3 %
Remaining amount                                  4%

A 1 Million property would incur an additional $24600. Stamp Duties have to be paid in cash or CPF

Additional Buyer's Stamp Duty (ADSD)
If you already own one property and intend to purchase another, you would need to pay ADSD on top of existing BSD. Rates as follows

Buyer's profileABSD
Singaporean buying first residential property0%
Singaporean buying second residential property12%
Singaporean buying third residential property15%
Permanent Residents buying first residential property5%
Permanent Residents buying second residential property15%
Foreigners buying a residential property in Singapore20%


Updated rates can be found here


Legal costs 
You would need to engage a lawyer to process the mortgage over the property and to ensure that the sales proceed as it should.

Cost: For private property, it averages $2000-$3000 when you use bank's lawyers. If you engage your own lawyers, it may cost more. For HDB , the amount varies, Check the HDB website for more information

Stamp Fee 
Paperwork required for securing a standard mortgage. This is on top of legal fee

Cost: Capped at $500

Valuation Fee
For a bank to provide the loan, the property would need to be appraised by a professional. Some banks may absorb the cost while others would charge you for it.

Cost: $140-200 for HDB and $300-$500 for the private property depending on the property type


Insurance Premium
Fire Insurance is compulsory for HDB and private property loan.

Cost: Cost varies depending on the type of property.

Administrative Fees
HDB has additional administrative fees for submitting an application, temporary extension of stay. etc.

Cost: For full HDB cost and fee, refer here 


Buyers agent fee
This is applicable for HDB. If you use an agent to help you find a resale flat, you would need to pay a commission of 1 per cent to the agent. For private property, buyers do not need to pay as the commission is split between seller's agent and buyer's agent.

Cost: 1% for HDB purchase using agent.

Housing Loan Interest
On top of the purchase price, you would need to service your loan. Housing loan interest is added on top of the principle for repayment. Since housing loans are on a longer-term, interest can be substantial over a period of 10 years or more. You might want to factor that in when you resell your house in the future.

Cost: Dependant on housing loan quantum and individual bank's rate.

Use of CPF (Opportunity Cost)
If you choose to use CPF, you will be forgoing the interest earned from CPF used for your house. As CPF is meant for retirement, you would also need to repay the CPF with interest once you sold your property. With interest rates currently at 2.5%, the amount to repay CPF could ballon over 10 years due to the compounding effect of interest. It may be prudent to not rely 100% of your loan repayment in CPF.

Cost : 2.5% of the amount used compounded over the period use

After Purchase


Renovation Cost
You would need to set aside funds for renovation.  Depending on your needs, you may spend as little as $10000 or as much as a million.

Cost : Average renovation cost for HDB is around $50 000 to $60 000 per year base on Qanvast

Furnishing Cost
If you purchasing a new house or even a resale, you would probably need to purchase items such as Beds, Sofa, Dining Set, TVs, etc. These big-ticket items do not come cheap.

Cost : A minimum of $10 000 to furnish the house.

Recurring charges

Maintenance Cost
After purchasing the property, you would also need to consider the recurring fees. These include Service and Conservancy Charges from HDB and Management Fee for Condos. For condos, there is normally an additional sinking fund on top of maintenance for future upgrading.  For buyers of landed property, there is usually no maintenance fees (unless townhouses). However, owners of landed property are responsible for house maintenance. Repair bills are usually heftier for landed properties.

HDB-Service and Conservancy Charges
Condo / Apartment/ Townhouses-Management Fee / Sinking Fund
Landed -Maintenance Cost

Cost - Depends on type of residence

Recurring charges : Electricity / Water Bill / Internet / Cable
Another recurring fee would be electricity, water bills, cable and internet. It could easily rake up to a few hundred dollars every month

Cost - Depending on usage and plan. Average $200 per month.


Future Cost


Future commission when selling property
If you were to sell your property in the future, you would probably need to foot commission base on the selling price

Cost: Current market practise is 2% of the property price.

Replacement cost
You have to take into account replacement cost if you are selling your property. Should you wish to upgrade, you would have to start saving the moment you purchase your first property.

Cost: Depending on your needs

CPF Refund
As mentioned earlier, should you use CPF to pay for the house, you would need to return it to your account if you sell the house,

Cost : 2.5 % accumulative interest

As you can see, buying a property solely based on the purchase price would be a big mistake. It would be safer to add an additional 20% to the price to cover immediate expenses such as stamp duties and lawyer fees. In addition, that amount could be used to budget for home renovation and furnishing. Thereafter, do budget for monthly maintenance as well as recurring charges such as a loan.
Cover all your bases before you purchase if you want to make a 'safe' buy.

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