Editor’s Note, May 2022: We’ve updated the article to ensure links are still relevant.


With an average property price of US$874,372, Singapore was ranked the second-most expensive city in which to buy private property in 2019. (Source: TODAYonline)

Yet even with the sky-high prices of property here, private property remains highly coveted by would-be homeowners, who believe that “property prices always rise in Singapore.”

But given that a condo or landed property represents such a sizable investment in your portfolio, you’ll definitely want to do your homework beforehand.

That’s why from helping you calculate whether your salary is enough to buy a condo to going through the downpayment required, we’ll lay down the entire procedure (and costs) of buying private property in Singapore.


Buying a Condo / Landed Property in Singapore: The Full Procedure


Step 1: Check Your Eligibility

There aren’t many eligibility requirements to buying private property in Singapore – if you’re looking at condos, that is. Even PRs and foreigners are eligible as long as they’re above the age of 21.

If you’re looking at landed property, things get a little trickier. PRs need to have been PRs for at least 5 years. It’s even worse if you’re an expat, since you’ll need to get special approval from the Singapore Land Authority.

The other catch is that if you’re a PR or foreigner, you may have to pay an extra tax (the Additional Buyer Stamp Duty) even if this is your first property purchase. Certain nationalities do get exemptions under the Free Trade Agreement though.


Step 2: Calculate Your Finances

Condominiums can easily be double the price of government-subsidised HDB flats – let alone landed property. You’ll definitely want to make sure you can afford the price tag.

First, dig up these numbers:

  • Your CPF OA savings (if any)
  • Your average monthly CPF contributions (if applicable)
  • The % of your take-home salary that you save
  • Your bank account balance
  • Any existing debt (car loans, outstanding credit card balances)

You’ll need at least 25% of the property’s purchase price saved in cash or CPF, since a bank loan will only give you 75% of the property’s valuation limit.

Plus, 5% of the purchase price must be in cash (not CPF). This will form part of the downpayment.

(Read also: 10+ Traps to Avoid When Upgrading from HDB to Condo)

And that’s just for starters. You’ll also need a healthy cash buffer to cover costs like legal fees, stamp duty, mortgage insurance, and so on. You can find out all the costs you’ll encounter here.

You’ll need to calculate three figures:

  1. How much in cash/CPF you’ll need upfront (until the closing of the sale)
  2. What’s the maximum price you can afford to pay on the property
  3. Given your current household income, how much you can afford to pay in recurring costs (property taxes, utilities, maintenance fees, etc.)

Bonus tip: Make sure your retirement plans won’t be derailed by the cost of the private property. Many people pump the entirety of their CPF into it, thinking they can downsize later on. But this is a dangerous assumption to make, particularly with leasehold and the strict property laws in Singapore – you don’t know what it’ll be worth later on.


Step 3: Obtain Your Approval in Principle (AIP)

The next step is to find out exactly how big of a loan you can get. This is where all the numbers from the previous step will come in handy.

You can skip this and opt instead to use a home loan calculator like this one. But that’s assuming your calculations are 100% correct. If not, you’re taking a huge risk.

One of the most common mistakes that buyers make is to pay the seller the non-refundable 1% Option Fee, and then forfeit it when they find out later on that they can’t get a big enough loan. If your budget is tight, losing that Option Fee means you may not be able to afford the downpayment on your next home!

The best way to go about doing this is to submit applications to various banks to see which one will give you the best rate. It’s free, non-binding, and takes maybe 15 minutes if you’ve got all your documents ready.

Heck, you can even get the AIP with no real intention to buy a property.

Just don’t randomly select a bank for the AIP, thinking that you’ll be able to borrow the same amount from any bank. Banks typically have a quota they need to meet and they’ll increase their rates as they near that quota. You’ll want to find one with favourable rates and good loan features for you.


Step 4: Check Out Your Preferred Areas

Now that you’ve got the numbers from Step 3 figured out, it’s time to go house hunting.

But before you actually go for any house viewings, you’ll want to be well-armed with pricing information about those developments.

We elaborate on how to find out a property’s valuation in this article, but to recap:

  1. Head over to URA to check out the prices and details of recently sold units in your target area(s)
    1. Note the approximate price range based on these past transactions. A number far away from the median price tells you that you’ll have to look deeper for any costly defects (or recent renovations that mark up the price)
  2. Use property price estimate tools like MyHomeValue™ to get confirmation on the expected price range
  3. Check out prices on current listings on marketplaces like SRX – but be aware that these prices are usually marked up to account for negotiation

(Read also: Freehold vs Leasehold – 5 Reasons Why Freehold Private Property is a Better Buy)


Step 5: Decide Whether to DIY or Hire an Agent

As a buyer, there are zero agent commissions to buy private property in Singapore. All those costs are typically borne by the seller (yay)!

You might get a rare agent or two who’ll ask for commissions, but generally, buyer agents will co-broke with seller agents for their agent fees.

(Read also: Is It Worth It to Engage a Property Agent?)

You can still choose to forgo the agent, of course. But an agent can help with things like:

  • Calculating your finances and helping you obtain a home loan
  • Settling the mountain of paperwork and making sure you don’t miss anything
  • Negotiating to get you the best possible price
  • Conducting background checks on the property/seller
  • Adding an inspection clause to the OTP before the handover, so you’re not stuck with leaky plumbing or termite-infested flooring

Regardless of whether you’re getting an agent, you’ll still need to hire a conveyancing lawyer. Expect to pay around $2,500 – $3,000 all in, though premium law firms can charge up to $5,000 for private property transactions.

That said, certain law firms will quote you a low figure just to get you to sign with them. They then slap you with other costs later on. To avoid being overcharged, make sure the figure you’re quoted includes:

  • Mortgage Stamp Duty (for bank loans) – paid to IRAS and capped at $500
  • CPF paperwork so you can access your CPF funds
  • Caveat lodgment charges

It’s best to find a lawyer before you get the Option to Purchase so you won’t be in a mad rush later on.


Step 6: Go for House Viewings

It’s finally time to look at potential homes!

Shortlist a few potentials and arrange for viewings – preferably in the daytime so you can also check how hot or noisy the place gets.

But bring along a fine-toothed comb for this (not literally), because this is when you’ll really have to look beyond the high-res photos and into the actual maintenance and structural integrity of the property.

With older condominiums, pipes can start to crack and leak after 12-15 years – so be sure to ask about when the last renovations were done. Landed property requires you to check even more thoroughly, since Singapore’s climate tends to be very unforgiving on houses.

You’ll also want to check for the following, as they’ll cost you a small fortune in renovation expenses:

  • Built-in furniture that may need to be torn out
  • Damaged/cracked tiles, flooring, or walls
  • Peeling paint (may indicate water seepage)
  • Wet patches of flooring (may indicate leaky pipes)
  • Rotten or termite-ridden wood (furniture, flooring, doorframes, etc.)
  • Poor toilet flushing power (may indicate clogged drains)
  • Rust-colored or “bloodstained” streaks on the walls (may indicate bedbugs)
  • Faulty electrical circuitry

We’ve heard horror stories of buyers taking over termite-infested properties and wrestling with the problem for months, so you definitely don’t want to skip this step.


Step 7: Get Option to Purchase (OTP)

Once you’ve found your dream home, it’s time to chope that property (by way of an OTP).

You’ll have to:

  • Review the terms of the OTP (or have your lawyer/agent do it)
  • Pay the seller 1% of the purchase price (cash) as the Option Fee

You now have 14 days to sort out your home loan and decide whether to proceed. During this time, the seller isn’t allowed to issue an OTP to anyone else.

But just a reminder: if you back out after the OTP, you won’t get your Option Fee back!


Step 8: Finalize Your Home Loan

Before exercising your OTP, you’ll need to obtain all the necessary documents and settle your home loan. (Read also: The Ultimate Home Loans Glossary)

The documents required vary from bank to bank, but they’ll typically ask for:

  • Completed loan application form
  • NRIC / Passport for all applicants
  • OTP or Sales & Purchase Agreement
  • Valuation Report*
  • Latest Notice of Assessment or 12 months’ CPF contribution history
  • Latest CPF Statement of Account
  • Payslips from last 3 months (or latest payslip + employment contract if you’ve been working for less than 3 months)**
  • Salary crediting account statements for last 3 months
  • Latest credit facilities statements (e.g., credit card statements, car loan, personal loan facilities, etc.)

If you don’t already have a valuation report, no worries. The bank will typically give you an indicative valuation first. Once you’ve got the OTP, they’ll send a professional valuer down to the property to formally assess it.

If you’re a freelancer or paid in commissions, you can give the bank your tax returns or commission statements from the past few years.

How long it takes to process your application all depends on how efficient you are in obtaining all the necessary financial documents. It typically only takes 2-3 days for the bank to approve the loan.

Then again, we’ve also encountered the rare scenario in which applications are rejected or the loan amounts are far lower than expected. In these cases, it’s usually because the buyer has bad credit – or they put themselves up as a guarantor for another loan.

The bank will also engage a lawyer for the mortgage process. You don’t HAVE to go with theirs though, so shop around for the best rates as you’ll need to pay for those legal fees.


Step 9: Exercise Option

Once you’ve got the Letter of Offer from the bank, it’s time to exercise the option!

This time, you’ll need to pay another 4% of the sale price in cash as the Option Exercise Fee.

Once you do, your lawyer will help you lodge a caveat on the property. This is basically an official declaration to the world that says you’re purchasing it – it protects your interest in the property until the transaction is complete.


Step 10: Pay Buyer’s Stamp Duty

With the exercised Option in hand, you now have 14 days to pay the Buyer Stamp Duty (and Additional Buyer Stamp Duty if applicable).

You can check out the most updated rates at the IRAS website, or use their calculator to figure out the exact amount due.

Head over to the IRAS e-Stamping Portal to make your payment.


Step 11: Conduct the Final Inspection

Now it’s up to the seller to move out of the property entirely. They’ll have to do this in the 8-10 weeks after the option is exercised.

If you’ve got a smart agent who included an inspection clause in the OTP, make full use of it! You may even want to consider hiring a professional inspector for this portion.

Defects can be extremely expensive to fix – particularly with landed property – so you want the seller to take care of all the necessary repairs before the official handover.

After the seller moves out, you’ll need to inspect the property to confirm that it’s vacant. This is also when you’ll check that everything cited in the valuation report is intact and in good working order.


Step 12: Complete the Sale at the Lawyer’s Office

Confirmed vacant possession? Secured all the funds needed for the purchase?

It’s time to head on down to the lawyer’s office to settle things. Bring your chequebook along with you, as you’ll have multiple to write for:

  • Legal fees to your lawyer
  • Fees payable to Singapore Land Authority
  • Mortgage Stamp Duty to IRAS (if you took out a loan)

If you engaged an agent, the seller’s agent will split his commission with your agent.

After that, you’ll collect the keys to your new private property!

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