You will be able to list the upfront costs of buying a flat or a private home.
When Mei and Daniel started looking at flats, they had one number in mind: the price on the HDB sales launch page. A friend who had collected her keys the year before told them the price was only the start. Before she moved in, she had paid an option fee, a downpayment in two parts, stamp duty, legal fees, insurance and a renovation contractor, plus the movers. Several of those had to be cash, and some came due within weeks of each other.
This lesson lists what you pay before and around the day you collect your keys, so that the home goal on your sheet covers all of it. The rules themselves, and the full buying process, are taught in Property & Mortgages. Here the aim is a complete list for the savings plan.
For an HDB flat bought from HDB, or a resale flat, or a private home, the purchase itself brings several costs.
The downpayment is the part of the price you pay yourself before the loan covers the rest. It is usually the largest upfront cost. How much it is, and when it is due, depends on the type of home and whether the loan comes from HDB or a bank. For a new flat it is often paid in stages, part at the signing of the lease agreement and the rest when you collect the keys.
Before the downpayment, there is usually a smaller payment to secure the home. For a new HDB flat, it is the option fee paid when you book. For a resale flat or a private property, there is an option fee to the seller and then an exercise fee when you take up the option. Both count towards the price.
Stamp duty is set by IRAS and charged on the price or the value of the property, whichever is higher. Use the stamp duty calculator on the IRAS website with your expected price. Extra duty applies to some purchases, such as a second property.
Legal fees pay for the conveyancing, the legal work of transferring the property and registering the loan. There may also be a valuation fee, especially for a resale flat or a bank loan, and insurance that the loan or CPF use requires, such as fire insurance and, for HDB flat owners paying with CPF, the Home Protection Scheme. Check the current requirements on the HDB and CPF Board websites.
For a resale flat, if the agreed price is above the valuation, the difference, called cash over valuation, has to be paid in cash. Neither the loan nor CPF covers it.
Renovation, furniture and moving are not part of the purchase. The home loan doesn't cover them, and CPF can't pay for them. They still need cash at about the same time as the final purchase payments, often within a month or two of collecting the keys.
For many buyers, renovation is the biggest cash cost of all, larger than the cash part of the downpayment. That is why lesson 1.2, Set targets for goals whose price keeps moving, used it as the example of a moving target.
Two things change the numbers more than anything else: the HDB loan you can get and the grants you qualify for. You don't have to guess either.
For an HDB flat, apply for an HDB Flat Eligibility letter, or HFE letter, through the HDB website. It tells you whether you can buy a flat, how much HDB would lend you, and which grants you may be eligible for. It is based on your actual income and household, so it is far more useful than an online estimate or a friend's experience.
Housing grants for eligible buyers are credited into your CPF Ordinary Account and go towards the purchase, which reduces how much you need to pay from your own savings and loan. Whether you qualify, and for how much, depends on factors such as citizenship, income, the type of flat and whether you're buying near your parents. Check the grants that may apply to you, and their current amounts, on the HDB website.
Here is Mei and Daniel's list for a new four-room flat, with every figure made up for the example rather than taken from any HDB rule or price list. They assume a price of S$380,000 after grants and a loan of S$300,000.
Option fee when they book, S$2,000, which counts towards the downpayment Rest of the downpayment, S$78,000, in two stages: S$19,000 at the lease signing and S$59,000 at key collection Stamp duty and legal and other fees, S$7,000, using the IRAS calculator for the duty Renovation, S$25,000, from two contractor quotes Furniture, appliances and moving, S$5,000
That adds up to S$117,000 of upfront costs, against a price of S$380,000. Without the list, they would have planned for S$80,000.
Every item has a source beside it in their sheet: the HFE letter for the loan and grants, the IRAS calculator for stamp duty, quotes for renovation, and their own estimate, marked as such, for the furniture.
Lesson 4.2, Which parts must be cash and which CPF can pay, sorts every line of this list into cash and CPF. Your own list, for the home you have in mind, is what that lesson will start from.
List every upfront cost for the type of home you are aiming for, with a source for each estimate.
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