Condo Downpayment in Singapore | Buying a Condo in Singapore

Property | Real Estate | Singapore

The path to owning a home in Singapore is difficult. You will either need to have a lot of money or a high-income job. If you are in Singapore and looking to buy a condo, then this article is for you.  We suggest you look into all of your housing options before settling on one that fits your needs. Here’s everything you need to know about the crucial condo downpayment in Singapore. So, you can decide what to do next as a first-time homebuyer.

Are you a first-time buyer looking for a Condo?

It was considered a rite of passage for Singaporean first-time homebuyers to purchase an HDB BTO flat and then later upgrade to a condo. But this ongoing pandemic has complicated a lot of things. According to the latest trends, HDB BTO flats will be delayed for another year or more due to the tighter Covid-19 restrictions. Not good news for those wanting to have a home of their own. Then there are the requirements for purchasing an HDB flat.

You must be a citizen, form a nuclear family (or be over 35), and earn within the income limit. Also, not to mention the ridiculous 7-figure resale flat prices. It’s no surprise that first-time homebuyers are considering purchasing a condo instead.

All About Condo Downpayment in Singapore

How Much is the Downpayment for Condo in Singapore?

If you’ve been wondering how much money you’ll need to buy a condo then read below:

In Singapore, your condo downpayment is affected by a number of factors. For instance, Loan-to-Value (LTV) Limit – the maximum amount you can borrow from a bank.
Your outstanding condo downpayment, which you can pay in part with your CPF. The minimum cash downpayment, which must come from your bank account. And Stamp Duty (BSD and/or ABSD), which must be paid first in cash. Then you can request a reimbursement from CPF.  These elements vary depending on the price of the condo. Let’s assume you’re looking for a small condo in a non-central neighbourhood and have found a unit for $800,000.

How Much Cash + CPF do I Need for my Condo Downpayment?

You can use your CPF funds to pay for your condo downpayment, if you didn’t already know. The funds must be drawn from your Ordinary Account (OA). In the above-mentioned scenario, the condo costs $800,000. You have a total downpayment of $200,000, or 25% of the condo’s purchase price. This hefty sum has been mandated by law since 2018. You must pay at least $40,000 in cash, or 5% of the purchase price, on this $200,000 purchase. The remaining amount can be paid from your CPF OA. And that amounts to $160,000, or 20% of the purchase price.

But what if you don’t have a CPF?  Do you have a CPF account with a balance of $160,000? If you are a regular salaried worker earning $4,000 per month, it will take you slightly more than 8 years to accumulate that much OA. If your CPF OA isn’t as large, you’ll need to pay more than $40,000 in cash for your condo downpayment.

Is it Necessary to Pay Stamp Duty (BSD or ABSD) in Cash?

Buyer’s Stamp Duty (BSD) is an additional cost to consider when saving for your condo downpayment. It applies to all residential property purchases, whether you are a first-time buyer or not. The Buyer’s Stamp Duty on an $800,000 condo unit is $18,600. If you are a Singaporean, that is “all” you have to pay.

However, if you are a permanent resident or a foreigner, you must account for Additional Buyer’s Stamp Duty. PRs must pay a 5% tax on their first property purchase. While foreigners must pay a 20% tax. Stamp Duty can be paid with CPF OA, but only on a reimbursement basis. This means you must still withdraw funds from your bank account.

And, of course, your CPF must have a sufficient balance to reimburse you in the first place. In total, PRs must pay BSD + ABSD of $58,600. While foreigners must pay BSD + ABSD of $58,600.

What Can the Monthly Payments Look Like for a Home Loan?

Is it difficult to come up with a sizable down payment? Wait until you hear about your condo’s monthly payments. Right now, typical home loan bank rates range from 1.25 percent to 1.6 percent per annum, with a 2- to 3-year lock-in period. So, before you buy a property make sure you have the capability to repay back your home loan. Most young people today want to build a space of their own and buying a condo can be the first choice. If you too are planning to buy a property then this condo downpayment in Singapore, the guide can be useful.


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