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Buying A Private Condo In Singapore? Know This First!

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A private condo can cost significantly more than a million dollars. While it requires you to invest large capital in comparison to public housing prices, simply having the capital is not enough to buy your choice of condo. In this article, we will discuss the eligibility requirements of different buyer groups looking to buy private condos in Singapore.

This handy guide has also broken down the different costs involved in your condo buying journey and important elements you need to consider when getting a loan from a bank for condo purchase.

What is a condo in Singapore?

Condos, or condominiums, are a form of private housing property in Singapore. These are unsubsidised, non-landed strata developments, where the buildings or blocks contain several residential units.

One of the key considerations when looking to buy a private condominium is knowing whether the property is a freehold or leasehold (99-year or 999-year) condo.

While freehold is more popular among homebuyers, the choice between freehold and leasehold should depend on your probable budget and period of stay. Freehold condos are ideal for HDB upgraders or homebuyers who expect to stay for a longer time. If budget is a limitation, leasehold condos may be a practical option in that case.

Homebuyers can either buy a condo in new launches or buy a resale condo unit in Singapore. While resale condos let you inspect the actual unit before making the final decision to purchase so that you can consider it from different aspects such as sunlight, noise level, past defects, etc., new launch condos come with everything brand new along with early bird discounts.

Let’s a look at the comparison between a new launch and a resale condo in Singapore.

Why Choose a New Condo?Why Choose a Resale Condo?
Brand new conditionReady to move in or rent out
Discounted (with early bird discounts)More predictable rental yield
More flexible payment schemesInspection before purchase
More unit options to cherry-pickTypically spacious than newer condos
Lower cost of maintenanceGreater scope for price negotiation

Compared to public housing, private condos in Singapore come with impressive amenities and unique facilities exclusively for their residents, which include swimming pools, clubhouse, tennis courts, function rooms, gymnasium, BBQ area, 24/7 security guards and many more to attract homebuyers.

What is the difference between condos and executive condos (EC)?

Structurally an EC and private condo are essentially the same with similar amenities and sold by private real estate developers or home builders. However, there are differences in rules & regulations that apply to buying and selling of different condo units in addition to their original selling price.

A private condo can be sold to Singaporean citizens, permanent residents (PR) and foreigners from the start without any restrictions. On the other hand, an Executive Condominium (EC) can only be sold to Singapore citizens (SCs) and permanent residents (PRs) after the mandatory 5-year Minimum Occupation Period (MOP).

When you buy a new EC, you are buying a condo that is subsidised by the government. As a general guideline, an executive condo is about 25% to 30% cheaper than an equivalent private condo.

Here’s a quick comparison between private condos and ECs:

Housing TypePrivate CondoExecutive Condo
PriceMore expensive than HDBs and ECsUp to 25-30% cheaper than private condos
Lease Period99 years or freehold99 years
Public or privatePrivatePublic for the first 10 years
Who can buy  AnyoneOnly SC + SC or SC + PR households
Can singles buy?Yes, as long as you are 21 years old and aboveYes, only if 35 years old & above; buying with another single
Minimum Occupancy Period (MOP)None5 Years
Monthly Household Income capNo income ceiling$16,000
Eligibility for using CPF?NoYes (first-timers only)
Restrictions on Selling/renting?NoYes

Can singles buy a condo?

Yes, singles can buy a new or resale private condominium without any restrictions. Although buying a property as a single Singaporean is challenging enough, single Singaporean PRs or citizens can still purchase a condo on their own or with someone else (friends, siblings, or parents as a co-buyer) as there is no restriction on the family nucleus.

Please note that the ability to buy private and public housing properties are limited by eligibility requirements, which many Singaporean singles are not able to meet at times. In order to own an HDB public housing in Singapore, singles have to wait till at least 35 years of age unless they are divorced, or 21 years if they are widowed or orphaned.

The only way to own a property before turning 35 is to buy private property, say a condo. The only restriction, however, is essentially the amount they can afford.

While affordability is one of the biggest concerns for singles when buying a condo, here’s what you can follow (the 3-3-5 rule):

  • Keep 30% of the property price as capital;
  • Monthly repayments should not exceed 30% of monthly income (including taxes & fees and excluding bonuses);
  • The property purchase price should not exceed 5 times your annual income.

Just like banks, we suggest singles who are self-employed, freelancers or have a variable income to consider their monthly income 30% less than what they anticipate to get a home loan.

Can a foreigner buy a condo in Singapore?

Unlike most Asian countries, Singapore allows foreign buyers to buy condos rather easily. Foreigners can purchase private condos without needing prior government approval and enjoy the same property rights as Singaporean citizens. The only major difference is in the property taxes the two types of condo owners pay. This we’ll discuss later in a section underneath.

When it comes to purchasing a condo in Singapore, there is no limit in the number of condos a foreigner can buy. However, the private condominium unit being bought by a foreign buyer must be in a building of less than six stories.

Additionally, a foreigner cannot purchase all private condo units within a building without taking government approval. Unlike HDB flats and new ECs, private condos are relatively easier to buy since there is no income capping.

Please note that foreigners can also buy executive condominiums (ECs) typically after they cross the 10-year mark. After the first 10 years, these properties count as fully privatised.

Can you buy a condo if you already own an HDB?

Are you an HDB flat owner who aspire to purchase a private condo? Then you must have searched the web with common questions like “Can I buy private property if I own an HDB flat?” or “Can an HDB owner buy a condo?”.

The short answer is – yes, you can own a private condo and an HDB flat at the same time (assuming you are a Singaporean Citizen).

The long answer is – you need to keep some key considerations in mind being an HDB owner looking to buy a private condo in addition to taxes and fees that you need to pay to finance your condo.

If you are owner of an HDB flat and looking to purchase a private condo, you need to complete the 5-year MOP before purchasing another property, either in Singapore or abroad.

Unlike Singapore Permanent Residents (PRs) and foreigners, all Singapore Citizens can take pride in buying another private property without having to dispose of their currently-owned HDB. Singapore PRs are required to dispose of their HDB flat within 6 months of purchasing a residential private property in Singapore.

Please note the MOP starts from the date you receive the keys to the BTO unit or resale HDB flat. Any period when you did not live in the BTO flat, like when it is rented out or when there has been a violation of the MOP will be excluded from the MOP. In case you flout the MOP rules, you could risk paying fines of up to $50,000 or getting your HDB flat forcibly acquired by the government.

However, note that buying private property while owning an HDB flat is not something many citizens can accomplish as it involves large expenses. Anyone looking to do this must be financially comfortable, as outstanding loans from the first property will affect loans for the loan property plus the buyer will be liable to pay ABSD on top of Buyer’s Stamp Duty (BSD). We’ll discuss ABSD in a section below.

Financing your condo

Once you have determined your eligibility, it is time to sort out your finances next. There are different elements that make up a condo’s cost. This section will give you a clear idea of how much money do you need to save for your condo purchase.

Purchase Price. The purchase price of the condo is stated in the document to be stamped. It also includes a non-refundable option fee of 1% of the purchase price placed in exchange for an Option to Purchase (OTP) – this is basically to ‘reserve’ the property.

Be sure about your buying decision before paying the option fee because if you back out, it will be forfeited to the seller. If you exercise the OTP legally, then you will need to sign the document and send it to the seller’s solicitor along with the additional 4% of the purchase price. Generally, you have a 14-day window to finalise your purchase.

This is why getting an AIP (Approval-in-Principal) from a bank beforehand is crucial. In a lot of cases, buyers place the option fee for their desired condo only to realise later that their condo loan can’t cover the remaining cost of condo.

Remember, buying a condo or any other private property isn’t just about the purchase price. Beyond your mortgage repayments, you will have to pay tax and other fees as well.

Buyer’s Stamp Duty (BSD). All buyers—whether a Singapore Citizen, Permanent Resident or foreigner—will have to pay BSD when buying a condo (or any property) in Singapore. It is calculated from the property’s market value or purchase price, whichever is higher.

Additional Buyer Stamp Duty (ABSD), if applicable. There’s an additional tax levied known as Additional Buyer Stamp Duty, which varies according to your citizenship status and the number of properties you have bought.

If you are a Singapore citizen, you don’t have to pay ABSD for your first residential property but only for all subsequent property purchases.

Legal Fees. You will need a conveyancing lawyer to help you with the legal bits such as paperwork, background checks, discharge of mortgage, transferring of ownership, etc. The estimated legal fees can range anywhere between $2500 and $3000.

You can also find a lawyer of your choice (should be present on the bank’s board) but they should be capable enough to represent you properly in front of the bank for all loan-related formalities.

Maintenance Fees (aka MCST). When you buy a condo unit, you need to pay the condo maintenance fees too. You will pay a service charge to the company managing and maintaining your housing estate every month.

The monthly maintenance fees given to the Management Corporation Strata Title (MCST) includes the cleaning and repairing costs of the condo’s shared facilities as well as other long-term, non-recurring expenses to keep the condo in good working order.

The amount of maintenance fee you will pay as a condo owner depends on the number of units in the building, facilities available and share value based on the floor area of the condo. This is why it is important to factor maintenance fees into your condo-buying decision.

Property Tax. Anyone who owns a property in Singapore is required to pay property tax – even if it is rented out. The amount of property tax a condo owner has to pay depends on two elements: 1) property’s annual value and 2) tax rate.

According to IRAS (Inland Revenue Authority of Singapore), your property’s annual value is an estimate of what your property can fetch as rental income in one year. The other factor i.e. your property tax rate suggests that the higher the property’s rental income, the more is the liability of tax rate for that property.

There are two types of property tax rates in Singapore: owner-occupied property (OOP) i.e. if you are staying in your property (Table 1 and Table 1.1) and non-owner-occupied property (NOOP) i.e. if you are not staying in your property (Table 2 and Table 2.1).

Owner-occupier tax rates (residential properties)

Residential properties that are owner-occupied include condominiums, HDB flats, and other residential properties in which the property’s owner resides. Such properties benefit from owner-occupier tax rates.

Annual Value ($)Effective 1 Jan 2023Property Tax Payable
First $8,000 Next $22,0000% 4%$0 $880
First $30,000 Next $10,000– 5%$880 $500
First $40,000 Next $15,000– 7%$1,380 $1,050
First $55,000 Next $15,000– 10%$2,430 $1,500
First $70,000 Next $15,000– 14%$3,930 $2,100
First $85,000 Next $15,000– 18%$6,030 $2,700
First $100,000 Above $100,000– 23%$8,730

 Table 1

Annual Value ($)Effective 1 Jan 2024Property Tax Payable
First $8,000 Next $22,0000% 4%$0 $880
First $30,000 Next $10,000– 6%$880 $600
First $40,000 Next $15,000– 10%$1,480 $1,500
First $55,000 Next $15,000– 14%$2,980 $2,100
First $70,000 Next $15,000– 20%$5,080 $3,000
First $85,000 Next $15,000– 26%$8,080 $3,900
First $100,000 Above $100,000– 32%$11,980

Table 1.1

Non-owner-occupier tax rates (residential properties)

Residential properties that are not occupied by their owners include condominiums, HDB flats, or other residential properties where the owner does not reside.

The following tax rates are applicable to non-owner occupied properties, with exceptions for those on the exclusion list.

Annual Value ($)Effective 1 Jan 2023Property Tax Payable
First 30,000 Next $15,00011% 16%$3,300 $2,400
First $45,000 Next $15,000– 21%$5,700 $3,150
First $60,000 Above $60,000– 27%$8,850

Table 2

Annual Value ($)Effective 1 Jan 2024Property Tax Payable
First 30,000 Next $15,00012% 20%$3,600 $3,000
First $45,000 Next $15,000– 28%$6,600 $4,200
First $60,000 Above $60,000– 36%$10,800

Table 2.1

Want to know if you can afford to buy private property in Singapore? This article ‘How much does it cost to buy private property in Singapore?’ explains the total costs and fees involved in purchasing a private property in Singapore.

Most likely, you will need to take a bank loan to finance your condo purchase. The section below discusses the main parameters that decide how much you can borrow.

Loan-to-Value (LTV)

All property transactions in Singapore are subject to a maximum LTV ratio. This refers to the maximum amount you can borrow as a loan based on the selling price of your desired condo unit.

As per the new rules from the Monetary Authority of Singapore (MAS), a condo buyer can borrow up to 75% (previously 80%) if the loan term is not more than 30 years and up to 55% (previously 60%) if the loan tenure extends 30 years or if the maturity happens when the borrower is past their 65th birthday.

Below table shows the LTV limits and minimum cash downpayment based on the number of home loans you have taken and currently paying:

Housing LoansLTV LimitMinimum Cash Downpayment
First75% or 55%*5% (for LTV of 75%); 10% (for LTV of 55%)
Second45% or 25%*25%
Third & onwards35% or 15%*25%

*Consider the lower LTV limit only if the loan tenure exceeds 30 or the loan period extends past the borrower’s age of 65.

As you can see the LTV is drastically reduced when it comes to the second housing loan. Therefore, it is always recommended to finish repaying your previous loan before applying for a new property loan.

Total Debt Servicing Ratio (TDSR)

Before you finalise buying your second property, it is wise to check your TDSR limit. This will help ensure that you don’t go over the top to finance the property purchase.

If you are upgrading to a condo while you already own an HDB flat, it is wise to check your TDSR. It prevents you from going over the top with your finances.

According to the TDSR framework by MAS, the TDSR limit is 55%, which means a borrower cannot surpass 55% of the gross monthly salary to service their total debts. This includes current condo mortgage, student loan, car loan and credit card loan.

For example, if your fixed monthly salary is $5,000, then you can use only up to $2,750 (55% of 5000) to repay your debts. In general, anything above 50% is a warning sign when taking a property loan.

If you don’t meet the TDSR limit now, consider paying off your outstanding debts before applying for a home loan.

Final Thoughts

Buying a condo in Singapore or any property for that matter is an exciting and nerve-wracking experience for buyers. When you are making such a large investment, it’s advisable to do your homework carefully.

Work out your finances and consider other factors such as the amount of bank loan you can borrow, the location, and upcoming government transformation plans. Be sure you meet the eligibility requirements when buying any property in Singapore and understand differences in regulations/eligibility across the different types of property.

Once you are sure of meeting the eligibility requirements and finding the type of condo (or any other property) you are looking to buy in the desired location, it is important to understand how much will it cost in total and how you can finance its purchase.

Get the best home loan in Singapore across all major banks and compare mortgage rates with the highest rewards.

Enjoy the lowest mortgage loan rates when you refinance a home loan or buy a new property!

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