If you are planning to ameliorate your property, from HDB to a condominium, it is a must for you to be acquainted with its complete details. This is what you need to do, depending if you want to buy -then -sell or sell-then -buy:
If the condominium is acquired ahead of the selling of HDB flat, ABSD or Additional Buyer’s Stamp should be paid initially and if the flat is being sold inside the six months period the buyer must be reimbursed.
You need to spare a minimum down payment of at least five percent of the total amount of the property or valuation (whatever is lower)
While waiting for the in-principle confirmation from the bank, be reminded not to put down the Options to Purchase Deposit (OTP).
Before disposing of your HDB flat, and you want to buy a condo
First, make sure that you are able to observe the five years which is the so-called, Minimum Occupancy Period (MOP), not unless you are able to move it for some valid reason such as some fines for an offense. A big No to dispose of your flat if still covered under MOP.
Secure In-Principle Approval from the bank, a legal document from a bank and valid for two weeks. The document comprises the amount to be released in order for you to buy a house.
- Pay the OTP with a non-refundable deposit which is only one percent of the property amount. Be sure not to drop the deposit before acquiring In- Principle, if you drop a deposit and loan is aborted, automatically the deposit would be forfeited.
- Within the validity time, 14 days of the OTP, an Option must be exercised. You’ll be asked to pay for another four percent of the property amount and sign the purchase agreement and the sale. Be reminded that being a depositor the Option along with the price of exercising it is not covered by a loan but should be paid by cash.
- After two weeks of exercising the said Option, you are obliged to pay the ABSD and Buyer’s Stamp Duty (BSD).The BSD takes one percent of the initial $180,000 of the property amount, two percent of the succeeding $180,000 and for the remaining amount is three percent.The ABSD for Singaporean citizens has to pay seven percent of the property amount and 10 percent for those Singapore Permanent Residents.
- During the two months of observing the Option, you are required to pay the amount left unpaid of the property. Remember that 80 percent is the highest ratio for the Loan-to-Value (LTV) For instance, a bank can release you a loan as high as 80 percent of the property value or amount, whichever is lesser.
- Apart from a bank loan, you must have paid the five percent of the whole property amount prior to the purchase and exercise of the OTP, for the left 15 percent, sources are from the merging of cash from your CPF Ordinary Account (CPF OA) and CPF Ordinary Account (CPF OA).
- If around six months you decided to sell your flat, ask an ABSD refund from the IRAS right away when a sale has successfully transacted. Reminder, you will have a zero reimbursement if you sell your flat only after six months.
If you decide to sell your HDB flat first and later buy a condo
This procedure is same as the above, but except for one
Secure in-principle approval
Drop the deposit for OTP
OTP is effective only within two weeks, exercise it during the period of two weeks
Pay in the span of two weeks the BSD but remember there is no more ABSD since you have already disposed your flat and this considered not a second unit or property.
Upon exercising over the OTP, you need to settle the left property price.