8 Fees to Pay When Buying a HDB Flat

Purchasing your first HDB flat in Singapore is a rite of passage for many, but navigating the financial maze can be daunting. From option fees to loans, grants, and the often-overlooked costs of renovation, this guide breaks down the essentials every first-time homeowner needs to know to make confident financial decisions.

Homeownership is a monumental step, especially in Singapore, where limited land means that securing an HDB flat is one of the most accessible ways to own a home. But with complex financing options, the journey from selection to key collection can be overwhelming. Here’s a step-by-step guide to understanding the financial commitments you’ll encounter.

1. HDB Option Fee

Securing an HDB flat during HDB’s sales launches begins with the option fee, the first of many costs. This fee counts toward your down payment, and the amount varies based on the HDB flat type.

• 2-room Flexi / Community Care Apartments: $500
• 3-room: $1,000
• 4-, 5-room, and Executive flat: $2,000

Once paid, you’ll be invited to schedule a flat booking appointment with HDB.

2. Buyer’s Stamp Duty (BSD)

Buyer’s Stamp Duty, or BSD, is levied on property purchases in Singapore, calculated based on the higher of the purchase price or market value

• First $180,000: 1%
• Next $180,000: 2%
• Next $640,000: 3%
• Remaining amount: 4% - 6%

For example, a 4-room HDB BTO flat in Tampines GreenTopaz valued at $500,000, the BSD comes to 3% or about $15,000.

3. HDB Conveyancing Fee

The legal fees for transferring ownership are scaled based on valuation.

• First $30,000: $0.90 per $1,000
• Next $30,000: $0.72 per $1,000
• Remaining Amount: $0.60 per $1,000

Using a $500,000 flat as an example, the conveyancing fee would be $313 before GST.

4. Mortgage

Your down payment will vary depending on whether you take an HDB loan or a bank loan.

HDB Loan

Fixed at 2.6% per annum, the HDB loan rate is pegged to the CPF Ordinary Account rate plus 0.1%, offering stability that has held since 1999. The HDB loan allows for a loan-tov alue (LTV) ratio of up to 75%, which means a down payment of 25%.

Bank Loan

Bank loans are pegged to the market rate (often the Singapore Overnight Rate Average, or SORA), which fluctuates and is currently between 3.7% and 5.5%. These loans require a downpayment of 25%, with 5% paid in cash and the remaining 20% through CPF OA savings or cash. Remember: You can switch from an HDB to a bank loan but not the other way around, so think carefully about which loan suits your long-term financial plans.

5. HDB Grants & Subsidies

For those eligible, HDB grants can help offset some of the financial load. Here’s a breakdown of key subsidies.

Enhanced CPF Housing Grant (EHG): This grant provides up to $120,000 for first-timer families with a combined income below $9,000 monthly. For families with one second-timer, the grant amount is $60,000. This grant is credited into the CPF Ordinary Account (OA) of eligible applicants.

Family Grant: Designed for married couples or families purchasing an HDB resale flat, this grant can provide up to $80,000, depending on the flat’s location and applicants’ eligibility.

6. Renovation Costs

Often overlooked, renovation costs can be substantial, especially if you’re looking to customise your new home. For new Build-To-Order (BTO) flats, renovation can range from $50,000 to $90,000, with a significant portion going towards carpentry and tiling. This cost only increases with the size of the flat. In addition, expect to budget another $10,000 to $30,000 for furniture and fixtures.

Planning to shop from budget friendly sources like Taobao? Make sure to factor in shipping, assembly, and possible replacement costs for items that may not be up to quality expectations.

7. HDB Lease In Escrow Registration Fee ($38.30)

The Lease in Escrow Registration Fee applies to buyers of resale HDB flats in certain cases, such as:

• When the full registration of ownership is delayed.
• When interim legal arrangements (like a lease in escrow) are needed to formalise temporary occupancy.

A “Lease In Escrow” agreement is typically used in cases where a buyer of an HDB flat requires more time to complete the formal registration of the flat’s ownership, such as when finalizing the full payment or resolving financing arrangements.

New HDB BTO (Build-To-Order) flat owners do not need to pay the HDB Lease in Escrow Registration Fee. For BTO flats, the lease is granted directly to the buyer upon completion of the flat. The process involves signing the lease agreement with HDB, and ownership is officially registered in the buyer’s name once all conditions (e.g., payment of required fees, fulfilment of loan obligations) are met. There’s no interim “lease in escrow” arrangement required.

8. HDB Mortgage In Escrow Registration Fee ($38.30)

New HDB BTO buyers and HDB resale flat buyers who are taking an HDB loan for their flat purchase are required to pay the HDB Mortgage in Escrow Registration Fee. If they are using a bank loan, the fee may still apply depending on how the mortgage is structured and registered with HDB.

The HDB Mortgage in Escrow Registration Fee is a fee charged by the Housing & Development Board (HDB) when a mortgage is registered in escrow as part of the process for securing financing for an HDB flat purchase. This typically applies when a buyer takes out a loan (either a bank loan or an HDB loan) to finance the purchase of an HDB flat, and the mortgage is registered with HDB.

The fee covers the administrative costs associated with registering the mortgage agreement in escrow, which ensures that the loan repayment is secured and that HDB’s interests are protected in case of default.

The fee is usually paid during the process of securing the loan and completing the necessary formalities for the flat purchase. It is typically part of the overall cost that the buyer needs to settle before the purchase is finalised.

The path to homeownership can be demanding, but with careful budgeting and planning, it’s achievable. Track your spending early, set realistic savings goals, and create a buffer for unexpected expenses. Keep in mind that costs like repairs and regular maintenance will inevitably arise, so having an emergency fund is always wise. Owning a home is a significant financial commitment, but with the right preparation, it’s an investment that will pay off in both value and the comfort of a space you can truly call your own.