Payment Procedure for New Projects

Payment Procedure

Payment Procedure for Buying a New Project

 

If you are deciding to purchase a new development, the payment procedure can be separated into two broad categories – down payment (including stamp duty), and progressive payment

The down payment is in cash and/or CPF (Central Provident Fund), and banks cannot grant a loan to cover the down payment portion.

The progressive payment starts in tandem with the progress of the construction of the development. For example, when the foundation is completed, buyers have to pay a certain amount to the developer.
The progressive payment can be paid by cash and/or CPF, but buyers can also take up a bank loan to cover the progressive payment.

 

Here is a table showing the entire payment procedure:

 

Time Frame1

Payment Stage

Payment Amount

Payment Type

 

Down Payment (20% + Stamp Duty)

 

Booking Day

Booking Fee

5%

Cash

~ 5 weeks

Stamp Duty

(3% – $5,400) + Applicable ABSD2

Cash, can be reimburse with CPF thereafter3

~ 8 weeks

Exercise Fee

15%

Cash and/or CPF4

Progressive Payment (80%)

 

~6 – 12 months

Completion of Foundation Works

10%

Cash/CPF/Loan5

~9 – 18 months

Completion of Structural Framework

10%

Cash/CPF/Loan5

~15 – 21 months

Completion of Brick Walls

5%

Cash/CPF/Loan

~18 – 24 months

Completion of Ceiling of Unit

5%

Cash/CPF/Loan

~21 – 27 months

Completion of Doors/Windows

5%

Cash/CPF/Loan

~24 – 30 months

Completion of Carpark

5%

Cash/CPF/Loan

~36 months

Temporary Occupation Period (T.O.P) (Keys collection)

25%

Cash/CPF/Loan

~48 months

Certificate of Statutory Completion (Development Fully Completed)

15%

Cash/CPF/Loan

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1 Assuming that the development takes 3 years to complete construction.

2 Singaporeans, Permanent Residents, and Foreigners pay differing amounts of Additional Buyer Stamp Duty (ABSD), depending on the number of properties already owned. Refer to Fig 1.

3 Subject to CPF minimum sum for 2nd property onwards.

4 If buyer has an existing mortgage loan, CPF cannot be used for the down payment; it has to be in cash. If the buyer does not have an existing mortgage loan, he/she can use cash or CPF for the 15% down payment.

5 Buyers with no existing mortgage can take up to 80% loan, covering all the progressive payment. Buyers with existing mortgage(s) can take varying amounts of loan. The portions which are not covered by loan have to be paid in cash or CPF. Refer to Fig 2.

 
 

How much Additional Buyer Stamp Duty (ABSD) do I pay?

 
Fig 1

Citizenship

Buying 1st Property

Buying 2nd Property

Buying 3rd Property onwards

Singaporean

0%

7%

10%

PR

5%

10%

10%

Foreigner

15%

15%

15%

 

  1. Nationals and PR of Liechtenstein, Iceland, Norway and Switzerland, and nationals of United States of America, are regarded as Singaporeans in the purchase of properties in Singapore.
  2.  

  3. In purchases with multiple purchasers, the higher ABSD shall prevail. For example, a Singaporean and a PR buying their first property shall pay 5% ABSD. A Singaporean buying his first property together with a Singaporean buying her second property shall pay 7% ABSD.
  4.  

  5. ABSD Remission: Application for ABSD Remission can be made to IRAS for the situation where a married couple involving a Singaporean and a PR are buying their first property together. The ABSD payment can be withheld whilst pending IRAS’ decision.
  6.  

  7. ABSD Refund: For the situation where a married couple involving a Singaporean and another Singaporean/or PR are buying their second property together, they can apply for refund of the ABSD amount paid on the second property if they meet the following conditions.
    a. They sell the first property within 6 months of the second property’s TOP.
    b. They do not buy a third or more property.

 
For more detailed information on how to apply for ABSD Remission and ABSD Refund, do visit IRAS website here.

 
 

What is the Maximum Bank Loan that I can take?

 
Fig 2

1st Housing Loan

2nd Housing Loan

3rd Housing Loan onwards

Loan Tenure less than 30 years;
 
Buyer less than 65 years old at end of tenure.

80%

50%

40%

Loan Tenure more than 30 years;
 
Buyer more than 65 years old at end of tenure.

60%

30%

20%

 
 

Contact Us!

 
If you are unsure how to calculate the payment procedure, do feel free to give us an email, a call, a text, or simply contact us below!

We will be glad to assist you to do your financial calculations correctly, so that you can make your purchase decision with a peace of mind.

 

Contact Us for Payment Procedure Advice

 

Do let us know if we can assist you to do a comprehensive financial calculation!
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Other resources that you may be interested in:
 
Current Bank Loan Rates