You will be able to plan the order of selling and buying when you move from one home to another.
Farah and Hakim found the condo before they had sold the flat. It was a completed three-bedroom unit near the children's future school, priced at S$1.2 million in this example, and the owner's agent made it sound as if the only decision left was the colour of the kitchen. Hakim wanted to book it that weekend. Farah wanted to know what would happen if the Bedok flat took six months to sell.
Every move from one home to another has the same puzzle: you need to live somewhere, and you can't spend the money from the old home until it is sold. There are two ways to solve it, and each one moves the risk somewhere different.
Selling first gives you certainty about money. Once the sale completes, you know exactly what came back to your CPF and what cash you received, from the sum in lesson 8.3, Selling: proceeds, the CPF refund and the timing. You buy the next home knowing your budget, with one loan at a time and no Additional Buyer's Stamp Duty for a second property.
The cost is somewhere to stay. Sale and purchase rarely line up to the day, so many people who sell first rent for a few months, move in with family, or negotiate to stay on in the old home for a short time after completion. HDB has an arrangement for sellers to stay on for a limited period if the buyer agrees, and private sales can include a similar clause. The rent, the storage and moving twice are real costs, but they are known ones.
There is also a market risk. If prices rise while you are between homes, the next home costs more. Some sellers accept that in exchange for certainty, and others find it the hardest part.
Buying first means you move once, straight from the old home to the new. It also brings three costs of its own, all of them while you own two homes.
The first is ABSD. Lesson 3.2, ABSD: who pays it and when it comes back, explained that a citizen couple buying a second home pays it upfront. At the rate invented for that lesson, 15%, it would be S$180,000 on the condo, due within weeks of signing. A married couple can claim it back if they sell the first home within the remission period and meet the other conditions, but the money has to be found first, and it comes back only after the sale.
The second is the loan. While the Bedok loan is still outstanding, a loan for the condo counts as a second housing loan, which comes with a lower LTV limit and a larger minimum cash downpayment, as lesson 4.1, LTV limits and the cash you must put in, showed. The TDSR counts both instalments, from lesson 4.3, which can shrink the second loan further.
The third is time pressure. Once you have committed to the new home, the old one has to sell by a deadline, and a buyer who knows you are in a hurry pays less.
Every buy-first plan has a clock, and you should know what it is before you sign.
For a private purchase by an HDB owner, the clock is the ABSD remission period. Miss it and the S$180,000 in the example stays with IRAS. For a move from one HDB flat to another, HDB generally requires you to sell the old flat within a set period after you take the new one, and you cannot own both indefinitely. For a new launch, the clock runs from completion of the new home, which may be years away, giving you more time but leaving you exposed to the market in between. IRAS and HDB publish the current periods and conditions. Check them for your exact purchase.
For a sell-first plan, the clock is softer: how long you can afford, or bear, to live somewhere temporary.
They worked out both versions. Buying first meant finding S$180,000 for ABSD on top of the condo's downpayment and stamp duty, with the Bedok flat needing to sell inside the remission period. Their savings couldn't cover that without a bridging loan, which would add interest and another lender's conditions. Selling first meant about four months in a rented flat near Farah's parents, and S$12,000 or so of rent and moving costs in this example.
They chose to sell first. The deciding line, written in their plan, was simple: "We are not willing to owe S$180,000 to IRAS on the hope that our flat sells in time."
A couple with more cash, a flat in strong demand or a new launch years from completion might reasonably decide the other way.
The same puzzle comes back later in life, often in reverse: selling a larger home to buy a smaller one. That move can release cash and CPF, and there are HDB and CPF schemes for older owners that affect how. How the released money becomes retirement income is covered in Retirement & Estate: income for life and a plan for what you leave, lesson 6.1, Your home as a retirement asset. The order of selling and buying still matters in the same way.
In the activity below, write whether you would sell first or buy first for your next move, and the deadline that drives the choice.
Write whether you would sell first or buy first for your next move, with the deadline that drives the choice.
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