Key factors to consider before your private residential property purchase

Image credit: harry b/Flickr

Private residential property purchase is the dream of many Singaporeans, But what are the key considerations you have to be mindful of before you buy one? In this article, we explore what are the factors you would have to consider before a private residential property purchase.

private residential property purchase
Image credit: harry b/Flickr

For example, if you own a HDB flat, a DBSS flat or an Executive Condominium, you have to fulfil the minimum occupation period set by HDB before your private residential property purchase.

Also, if you are not a Singapore citizen, you have to obtain approval from the Controller of Residential Property in Singapore Land Authority (SLA), before you can buy landed houses including but not limited to strata landed houses.

Before buying a property, you should check the property prices in the areas of interest and compute your finances and fees payable. Most importantly, you should buy within your financial means. Before you buy your private residential property, you should do your own research as to the general condition of the residential property market, and also of the prices of the units in the development you wish to make your purchase in.

You may use your CPF Ordinary Account (OA) savings for your private residential property purchase under the Private Properties Scheme. But there are limits on the amount of CPF savings you can use to buy a property.

You should enquire with your bank on your eligibility for bank financing as early as possible, preferably before you pay the upfront deposit or commit yourself to the purchase. Before you proceed to check with a bank on the size of your loan, read up on housing loans and other important information related to your purchase.

Stamp duty

Stamp duty is a tax on dutiable documents relating to any immovable property in Singapore and any stocks or shares. Here are some stamp duty types related to property purchase:

  • Buyer’s Stamp Duty. You are required to pay Buyers’ Stamp Duty (BSD) after signing the agreement.
  • Additional Buyer’s Stamp Duty. You may also need to pay Additional Buyer’s Stamp Duty after signing the agreement depending on your profile:
  • Whether you are buying as an individual or as an entity
  • Your residency status (e.g. are you a Singaporean or foreigner)
  • Number of residential properties owned
  • Seller’s Stamp Duty. You may need to pay a Seller’s Stamp Duty (SSD) if you sell or dispose of the property within 4 years of acquisition (for property purchased between 14 Jan 2011 and 10 Mar 2017, both dates inclusive) or within 3 years of acquisition (for property purchase on or after 11 Mar 2017).

If you engage a lawyer, you should clarify the scope of services to be provided and the legal fees payable. For more information on the role of a lawyer in a property purchase, you may refer to the Law Society of Singapore’s ‘Know the Law NOW!’  – see Chapter 33, Buying and Selling a House.

If you engage a property agent to represent you, you should check that property agency and agent are licensed and registered with the Council for Estate Agencies (CEA). Note that property agents are not allowed to offer you any benefit, in cash or kind, to induce you to engage their services.

If you have set your eyes on a private residential property purchase which is uncompleted, there are other factors you need to consider before committing to a purchase.

When considering an uncompleted private residential property purchase, you need to consider certain other factors before committing to a purchase.

Before committing to a purchase, you should do some basic checks on the developer of the housing project and consider the costs involved in purchasing a private residential property.

If you are visiting a showroom, review the information on the housing project and specific unit(s) carefully before committing to a purchase. Developers have to ensure that the plans and models displayed, and show units erected are accurate and in accordance with the approved building plans as required under the Housing Developers (Show Unit) Rules.

The developer is required to provide you with a set of mandatory information on the housing project and unit before accepting the booking fee from you. If you decide to proceed with the purchase of the unit after reviewing the information, you will then pay a booking fee for the issue of an Option to Purchase (OTP).

Before you sign the Sale and Purchase Agreement (S&PA), know that the S&PA is a private contract between the developer and the purchaser for the sale and purchase of a unit. Licensed housing developers are required to use the standard form of S&PA in the sale of the units in a housing project. No amendment to the S&PA can be made except with the prior approval of the Controller of Housing. You should review the terms in the S&PA before signing it.

Once Temporary Occupation Permit (TOP) is issued and you have paid the progress payment due upon TOP, the developer will inform you of the procedure to collect the key to your unit. After collecting the key, you can inspect your unit and report any defects in your unit and housing project to the developer to carry out rectification works within the 1 year defects liability period.

How to Secure a Home Loan Quickly

Are you concerned about 99 year leasehold HDB flats and want to buy a private property, but ensure of funds availability for purchase? Don’t worry because iCompareLoan mortgage broker can set you up on a path that can get you a home loan in a quick and seamless manner.

Our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs, regardless of if it is a 99 year leasehold property or not. Find out money saving tips here.

Whether you are looking for a new home loan or to refinance, the Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.

For advice on a new home loan.

For refinancing advice.

Written by Ravi Chandran

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