NEW LAUNCH PURCHASE ESSENTIALS
1. FINANCING
1A. HOUSING LOAN
When it comes to purchasing a private property, many buyers often require financing in the form of a housing loan. In Singapore, there are various banks and financial institutions that offer housing loans to help buyers purchase a property.
The maximum loan that can be obtained depends on a number of factors not limited to: 1. the number of existing housing loans 2. Age of borrowers 3. Income 4. credit history etc. Before embarking on the property hunting journey, buyers are strongly encouraged to apply for an In-Principle Approver (IPA) to determine how much loan they can secure to obtain the maximum purchase price. Do reach out to us should you require any advice.
1B. PROGRESSIVE PAYMENT SCHEME
When purchasing a new launch condominium, buyers have the option to pay for the property progressively in stages, instead of paying the full amount upfront. This payment scheme is known as the Progressive Payment Schedule (PPS).
The Progressive Payment Scheme allows buyers to pay a fraction of the total purchase price at the time of booking, and the remaining balance will be paid in stages as the construction progresses. What this means for the buyer is a lower monthly payment during the construction phase.
Using a $1.5M purchase with 75% LTV for example, a 20% downpayment will be required upon the purchase of the unit (5% for the granting of OTP, 15% upon exercising of S&P agreement). Once the foundation work has been completed, the developer will call for another 10% payment, of which 5% will have to be in cash and/or CPF and the remaining 5% ($75000) being financed by a bank loan. Once the 5% ($75000) loan is disbursed by the bank, the buyer will have to start servicing the monthly instalment based on the amount disbursed. As the construction progresses, the bank will disburse the remaining loan accordingly until it is fully disbursed when the certificate of statutory completion is issued. In contrast with the purchase of a resale property where the full loan is disbursed at the onset, buyers of a new launch property will have significantly lower monthly payment during the initial 3-4years of construction phase.
1C. STAMP DUTY
There are three types of duties payable on the sale, purchase, acquisition or disposal of properties in Singapore:
Buyer's Stamp Duty (BSD) - applicable for all property buyers
Additional Buyer's Stamp Duty (ABSD) - applicable for selected property buyers
Seller's Stamp Duty (SSD) - applicable to buyers who sell a property within 3 years from acquiring it
2. PURCHASE PROCEDURES
