Upgrading from a HDB flat to a condominium? The information to finish all guides

Congratulations! Should you’re studying this text, you’re most likely transferring up and out out of your starter house and upgrading to a condominium, or occupied with doing so.

Content material
Reasons for upgrading
Minimum Occupancy Period

To buy or sell first? 
Buy first, sell later: Pros and cons
Sell first, buy later: Pros and cons

New launch EC or resale condo?
New launch
Resale EC

Causes for upgrading to a condominium

Higher location. Upgrading may transfer you or your partner nearer to your workplaces, lowering the travelling distance and time.

Major faculty. Suppose you’re eyeing a selected major faculty. Transferring allows you to select properties inside a 1km radius of your alternative faculty to your youngster. 

Free from HDB’s guidelines. Some set HDB guidelines embrace having to attend out your Minimal Occupation Interval (MOP). You’re additionally free to maintain as many pets as you need, not like HDB’s ‘one-approved-dog’ per family rule. 

Additionally, the Ethnic Integration Coverage (EIP) isn’t imposed on non-public properties. Do you have to select to promote your condominium in future, your pool of patrons gained’t be restricted to patrons of a selected race.

Rental facilities. Possibly you’re a fitness center buff who likes swimming laps or hitting the weights a number of instances a day. With each the pool and the fitness center only a stone’s throw out of your doorstep, you are able to do simply that.

Condos are stepping up their amenity sport, with some that includes swanky services reminiscent of karaoke rooms, a bowling alley and even an ice remedy room

Asset development. Should you’re upgrading to an government condominium (EC) with a freshly accomplished MOP of 5 years, yow will discover your self in an instantly advantageous place. 

It’s because the EC is already midway to privatisation. In one other 5 years, you’ll have the ability to promote it to foreigners or firms. Having the ability to take action opens up a complete pool of potential patrons, and with condominium demand and costs rising through the years, you’re nearly all the time assured a revenue. 

In case you are in no rush to improve, you may additionally be contemplating new launch condos. Some new launches that is perhaps appropriate for HDB upgraders are:

Right here’s how one can improve out of your HDB flat to a condominium. 

You might want to MOP earlier than upgrading

The soonest you’ll be able to improve is after finishing your MOP, which is normally 5 years. Your MOP is determined by the kind of flat bought.

Throughout your MOP, you can not do these 4 issues :

• Promote your flat
• Purchase one other HDB flat
• Purchase one other non-public property
• Purchase property overseas

To verify your eligibility, you’ll be able to go to My HDBPage and log in along with your Singpass.

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To purchase or promote first?

Purchase first, promote later


1. No want for non permanent lodging

Promoting a HDB flat on the open market can take months and is determined by a variance of things.

• The present property market
• In case your property requires renovation
• Proximity to instructional institutes and facilities
• How far it’s to the closest MRT/LRT station
• If it’s on a excessive ground or low ground

You don’t want to fret about having a roof over your head when you’ve secured your condominium previous to promoting your HDB flat. 

Doing so saves you hundreds of {dollars} on potential rental prices. Plus, when you resolve to renovate your condominium earlier than transferring in, you’ll be able to proceed residing at your HDB whereas finishing your renovations.

SELLING YOUR PROPERTY? Would you prefer to understand how a lot your property is value? Or perhaps you’re contemplating itemizing your property on the market? Let us know, and we’ll have a consultant reach out to you!

2. Deferred Cost Scheme (DPS) 

An enormous concern HDB upgraders have when taking the “purchase first, promote later” strategy is having to service the mortgage of two housing loans concurrently till the condominium receives TOP standing. 

In actuality, this isn’t a priority as many EC builders supply the Deferred Cost Scheme (DPS). Beneath this scheme, you solely pay the preliminary 20% downpayment of the property buy worth, with 5% in money and 15% in both money or CPF.

The remainder of the 80% is paid after two to 3 years. Throughout these years, you’re free from having to make mortgage repayments, stamp duties and all different monetary obligations (regarding the property, in fact)

Having a decrease upfront money outlay plus an prolonged deferment interval will assist you to do these items:

• Transfer into your new home
• Repay remaining house loans
• Get additional time to boost money 

As for condos, solely those who have acquired TOP standing or the Certificates of Statutory Completion may be bought beneath DPS, so you’ll want to verify with the builders earlier than pulling the set off. 

Nevertheless, there’s a catch: the property’s worth may even be greater by about 10%, which is a good trade-off for deferring your mortgage compensation.   


1. A decrease LTV ratio

By shopping for a condominium earlier than promoting off your HDB flat, it means you’ll be servicing two house loans on the similar time.

As an alternative of the everyday 75% loan-to-value (LTV) ratio, you’ll be topic to an LTV ratio of 45% to your second mortgage. It’s even decrease at 25% if the mortgage tenure exceeds 30 years, or if it goes past your sixty fifth birthday.

Let’s say you’re shopping for a S$2 million condominium earlier than promoting your HDB flat. Assuming you’re taking a 30-year mortgage, and that is your second house mortgage, your LTV shall be 45%. This implies your mortgage quantity shall be S$900,000.

Your minimal money downpayment additionally jumps 5% to 25%. This implies it’s essential to be ready to develop an even bigger money downpayment when paying to your condominium.

Because the time period loan-to-value suggests, how a lot you’ll be able to borrow is determined by the valuation of the unit, and never the acquisition worth.

Which means that having a greater valuation will lead to you with the ability to borrow extra for your home. On the similar time, it should additionally lead to you paying greater stamp duties (because it is determined by the upper quantity of both the acquisition worth or valuation). Bear this in thoughts earlier than actively on the lookout for a better valuation.

2. TSDR restrictions – You won’t get your required mortgage quantity

At the moment, the Complete Debt Servicing Ratio (TDSR) threshold stands at 55%. It applies to loans the place the OTP of the property buy was granted on or after 16 December 2021. 

In case your month-to-month revenue is S$10,000, your excellent debt repayments can’t be greater than S$5,500 per 30 days.

No money in wallet
After paying for all my loans plus Spotify premium and Seize rides, I can’t afford to tackle one other property mortgage?

TDSR considers your month-to-month mortgage compensation, plus all of your excellent monetary obligations. These money owed embrace automotive loans, scholar loans, bank card money owed and many others. 

This limits the whole quantity you’ll be able to borrow, which in flip could have an effect on the property you’ll be able to afford.  

Use 99.co’s TDSR calculator to seek out out your most mortgage compensation restrict.

3. Your MSR is restricted (when you’re shopping for a brand new EC)

You may also be restricted by the Mortgage Servicing Ratio (MSR), the place you’re allowed to solely use as much as 30% of your month-to-month revenue to service your own home loans. 

In case your month-to-month revenue is S$10,000, your most month-to-month house mortgage is capped at S$3,000.

As if the TDSR cap wasn’t sufficient, the MSR may add one other layer of problem when securing the mortgage quantity required and affect your general affordability when you’re buying a brand new EC. 

*MSR doesn’t apply to privatised ECs

Should you’re unable to fulfill the MSR, you may have a few choices. You may make an even bigger downpayment, improve the mortgage tenure, purchase a resale EC or… merely earn more money

Use 99.co’s affordability calculator to verify the utmost mortgage you qualify for and the utmost property worth you’ll be able to afford based mostly on the present mortgage limits, TDSR and MSR.

4. You might want to pay ABSD

Should you’re shopping for your condominium earlier than promoting off your present HDB flat, it’s essential to pay Extra Purchaser’s Stamp Obligation (ABSD) of 17% whenever you buy your second property (when you’re a Singaporean).

Nevertheless, you’ll be able to apply for ABSD remission and get your a refund through the e-Stamping portal on IRAS’s web site. The necessities are: 

• You might want to be a married couple, and no less than one partner must be a Singapore Citizen (SC)

• You have to have purchased the property collectively as a married couple 

• You have to stay married on the time of utility
• You have to promote your first house inside six months of shopping for your condominium, or when your condominium has acquired its TOP
• You have to not have purchased extra properties since shopping for the second residential property 

ABSD is set by the vendor’s quoted worth or property valuation, whichever is greater. If the acquisition worth quoted by the vendor is S$2.3 million and the market worth of the property is S$2.2 million, the ABSD shall be calculated based mostly on S$2.3 million.

Listed below are the present charges for ABSD.

Forms of patrons Charges on or after 16 December 2021
Singapore Residents First residential property 0%
Second residential property 17%
Third and subsequent residential property 25%
Everlasting Residents First residential property 5%
Second residential property 25%
Third and subsequent residential property 30%
Foreigners Any residential property 30%

Instance: Shopping for a property valued at S$2.3 million
ABSD payable: 17% x $2.3 million = S$391,000

ABSD should be paid inside 14 days after signing the settlement (normally the Sale and Buy Settlement), and the remission utility should be made inside six months after the sale of your HDB flat. 

Use 99.co’s Stamp Obligation Calculator to learn how a lot BSD and/or ABSD you must pay.

To keep away from ABSD altogether, it’s essential to be legally contracted to promote your present HDB flat earlier than signing the Choice to Buy to your new condominium. 

5. Beneath strain to promote shortly 

To obtain ABSD remission, it’s essential to promote your property inside six months. This will throw a spanner within the works, particularly if the property market is stagnant or, worse, on the downtrend. 

Woman stressed while looking at laptop
It’s been 5 months, somebody, anybody, please purchase my home

ABSD is non-deferrable and should be paid in full and on time. Failure to take action means incurring a penalty of 4 instances the quantity of unpaid obligation beneath the Stamp Duties Act.

6. You’ve CPF restrictions

Your condominium is taken into account your second property if you buy it earlier than promoting off your HDB flat. This places sure restrictions on utilizing your CPF Peculiar Account (OA) to finance your condominium.

Should you’ve used your CPF to your first house and wish to use the surplus of your CPF OA to your second property, you’re required to put aside a Fundamental Retirement Sum (BRS).

These under the age of 55 should put aside the BRS of their OA and Particular Account (SA), whereas these above the age of 55 should put aside the BRS of their OA, SA and Retirement Account (RA).

There are two phrases to familiarise your self with: Valuation Restrict and Withdrawal Restrict

Valuation Restrict (VL): The market worth of your property on the level of buy or the acquisition worth of the property, whichever is decrease.

If the market worth of the second property is S$2 million and the acquisition worth is S$1.8 million, the VL shall be S$1.8 million. After setting apart the prevailing BRS, you should utilize your CPF OA financial savings to pay to your second house, as much as the VL.  

Withdrawal Restrict (WL): That is the utmost quantity of CPF financial savings that can be utilized for your home. It’s capped at 120% of the VL for the primary property, and 100% of VL for the second property. 

After tapping out your CPF WL, you’re not allowed to make use of your CPF to service your housing mortgage. The remaining mortgage will should be financed with money. 

You should utilize CPF’s Housing Usage Calculator to find out how a lot OA is out there to your property buy. 

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Promote first, purchase later


1. No ABSD

As said above, you’ll be able to keep away from paying ABSD when you signal the choice to buy of your second property after promoting your HDB flat.

This implies having one much less means of making use of for ABSD remission in your upgrading journey.

2. No LTV cap

To stop over-leveraging, your LTV ratio drops as you personal extra properties. As defined earlier, when you’re already servicing one housing mortgage, the financial institution can solely provide you with a forty five% LTV ratio in your second, for mortgage tenures as much as 30 years.

Quite the opposite, all this trouble may be prevented when you promote your HDB flat first earlier than upgrading. So the quantity of financing you may get shall be as much as 75% of the property worth.

3. More cash to your subsequent buy

Upgrading is a hefty monetary dedication that comes with a major downpayment, particularly when you’re taking a financial institution mortgage. Promoting your HDB first frees up cash to fund that downpayment so you’ll be able to keep away from tapping in your money reserves or CPF.

Right here’s why you shouldn’t use your CPF to pay for your home.


1. Discovering various lodging

Suppose you fail to safe your required condominium after promoting your HDB flat. In that case, you’ll end up caught within the headache-inducing place of getting to supply interim lodging for you and your loved ones. 

You possibly can all the time request an extension of as much as three months from the patrons of your HDB flat. Nevertheless, take into account that the patrons is probably not agreeable to this as it’d push again their transferring or renovation plans. 

A beneficiant buddy or relative may supply their place so that you can put up at whilst you seek for your second house, however this implies you’ll must incur storage fees to your belongings and furnishings. 

A couple moving their things
Transferring… once more?

Give it some thought. You might want to pay transferring prices of your possessions to both your rental or storage unit, after which it’s essential to pay to maneuver it once more to your condominium. There’s all the time the chance of issues getting broken within the means of transferring, to not point out the prices will begin to stack up.  


2. Purchaser’s Stamp Obligation (BSD)

No matter which route you resolve to take, you’ll must pay Purchaser’s Stamp Obligation (BSD) to the Inland Income Authority of Singapore (IRAS). 

BSD is set by your property’s buy worth or valuation, whichever is greater. If the acquisition worth said within the Sale & Buy Settlement is S$2 million and the property’s market worth is S$1.8 million, the BSD shall be calculated based mostly on S$2 million.

Listed below are the present BSD charges for properties purchased on or after twentieth February 2018.

Buy worth / Market worth Charges for residential properties
First S$180,000 1%
Subsequent S$180,000 2%
Subsequent $640,000 3%
Remaining quantity 4%
*BSD is rounded all the way down to the closest greenback

Instance: Calculating BSD for a S$2m condominium 

Proportion payable Calculation Complete
1% of the primary S$180,000 1% x S$180,000 S$1,800
2% of the following S$180,000 2% x S$180,000 S$3,600
3% of the following S$640,000 3% x $640,000 S$19,200
Remaining quantity of S$2m S$1m x 4% S$40,000
Complete BSD payable S$(1,800 + 3600 + 19,200 + 40,000) S$64,600

The BSD should be paid inside 14 days of signing the S&P settlement.

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EC or condominium?

In the case of selecting between upgrading to an EC versus a condominium, there are numerous execs and cons for every of them. Finally, it boils all the way down to your preferences and monetary standing.

New launch government condos (EC) are thought-about subsidised public housing for the primary ten years. The usual HDB guidelines nonetheless apply, reminiscent of promoting your present HDB flat inside six months of receiving the keys to your new EC. 

Govt condominium

What are Govt Condos? ECs are a public-private housing hybrid constructed and bought by non-public builders. They arrive with all of the bells and whistles of a personal condominium, however are subjected to some HDB restrictions once they’re first launched on the market. They’ve the usual MOP interval of 5 years, after which they are often bought on the resale market to Singaporeans and PRs.

This provides as much as a complete interval of 10 years, after which they are often bought to anybody (together with foreigners) on the open market.

Revenue ceiling. Your common gross month-to-month family revenue should not exceed S$16,000 when shopping for an EC. If it does, that’s downside to have, but it surely additionally means you’re priced out of latest launch ECs and must look to the EC resale market or condominium market.

(Resale ECs aren’t topic to revenue ceiling.) 

Extra reasonably priced. ECs, particularly new launch ECs, are extra reasonably priced than condos on the outset as a result of subsidies, making it a extra engaging choice for worth appreciation.

thinking buy home couple
Okay honey, it’s essential to cease shopping for new gaming tech if we wish to make our mortgage repayments in future

Use 99.co’s Progressive Cost calculator to verify your cost breakdown. 

Resale levy payable. Except you’re shopping for a personal condominium, you’re subjected to a resale levy whenever you promote your subsidised HDB flat to purchase an EC from a developer. In response to HDB, the resale levy is put in place to take care of “a good allocation of public housing subsidies between first-timers and second-timers by lowering the subsidy loved for the second HDB flat or EC”. 

Right here’s the resale levy quantities payable. 

First subsidised housing kind Resale levy quantity
Households Singles Grant recipients
2-room/ 2-room Flexi flat S$15,000 S$7,500
3-room flat  S$30,000 S$15,000
4-room flat S$40,000 S$20,000
5-room flat S$45,000 S$22,500
Govt flat S$50,000 S$25,000
Govt Rental S$55,000 NA


Govt Condos on the market


What are condos? Condos are constructed by non-public builders and aren’t topic to restrictions reminiscent of MOP and may be bought to anybody, together with foreigners. 

No revenue ceiling. Personal condos don’t have any ceiling on revenue, so in case your month-to-month family revenue is greater than S$16,000, you should buy condos with none downside.  

Extra choices. Location is essential when selecting a spot to dwell, and condos provide you with a wider vary of tasks to select from. In fact, the nearer to the Core Central Area (CCR), the upper the costs shall be. Right here’s the common worth psf for condos within the Core Central Area, Remainder of Central Area (RCR) and Exterior of Central Area (OCR).

Common worth (S$) psf
Location 2015 2016 2017 2018 2019 2020 2021 2022
CCR S$1,870 S$2,008 S$1,981 S$2,170 S$2,317 S$2,197 S$2,326 S$2,484
RCR S$1,387 S$1,391 S$1,465 S$1,589 S$1,708 S$1,663 S$1,788 S$1,855
OCR S$1,108 S$1,129 S$1,152 S$1,186 S$1,268 S$1,286 S$1,309 S$1,451

Varied condos additionally come in several lease choices of 99-year, 999-year and even freehold, not like ECs, which have a 99-year lease. 

ABSD payable. In contrast to an EC, there are upfront ABSD fees when upgrading to a condominium, setting you again no less than six figures. You possibly can apply for ABSD remission later, however this implies the added stress of promoting your HDB flat inside six months.

Should you’re selecting a condominium as a possible funding piece, this text talks in regards to the execs and cons of every property. We additionally cowl the worth gaps and developments between ECs and condos right here.  

You possibly can preserve your HDB. As new launch ECs are subsidised housing, you must eliminate your earlier flat inside six months of getting your keys to the EC. Whereas with condos (together with resale ECs), you can have your cake and eat it too. This implies with the ability to lease out your HDB flat for rental revenue whereas residing in your condominium. 

Are you able to say monopoly

monopoly Singapore version
Subsequent up – Sentosa Cove, perhaps?

Personal condos on the market

New launch or resale EC/ condominium?

Likewise, there are execs and cons to new launch versus resale models. Whether or not you wish to purchase your subsequent house from the developer or the resale market ought to rely in your preferences and monetary means.

New launch models

New facilities. Shopping for a brand new launch means having fun with spanking new services, such because the fitness center and the pool. It doesn’t simply finish there – the fittings and fixtures in your unit are additionally untouched and in pristine situation, with a one-year guarantee within the occasion any points pop up. 

You get to take pleasure in that new condominium setting for a few years earlier than put on and tear units in. 

Developer perks. One other upside of upgrading to a brand new launch condominium straight on the condominium showflat is having access to perks, reminiscent of early-bird reductions and different incentives. Some incentives embrace builders absorbing the stamp obligation payable. 

A wider alternative of models can be obtainable, reminiscent of selecting from totally different stacks or flooring versus selecting from no matter properties house owners are itemizing on the open market.

Progressive Funds Scheme (PPS). Solely obtainable to Buildings Beneath Development (BUCs)*, the Progressive Cost Scheme (PPS) is nice for patrons who don’t have a ton of upfront capital to spare. 

Beneath the PPS, patrons can area out their cost obligations over an extended interval of a number of instalments because the condominium isn’t constructed but. Funds are solely made when development milestones are achieved, which makes it extra manageable financially. 

*Till the condominium receives its Momentary Occupation Allow (TOP), it’s known as a Constructing Beneath Development (BUC).

Lengthy ready time. Development of a condominium can take anyplace from three to 4 years, throughout which they’re referred to as a BUC. The wait is even longer for brand new launch ECs, as they will solely be launched 15 months after the land acquisition, or after the completion of basis works, whichever is earlier. 

Construction in Singapore
Is it achieved but? Is there something I can do to assist velocity up the method?

With this in thoughts, it’s beneficial to purchase first and promote later for brand new launches to make sure you’ll have a spot to dwell whilst you wait to your condominium to be accomplished.

Resale models

Shorter ready time. Maybe the most effective factor about resale models is that after the transaction is accomplished, you’ll be able to transfer in as quickly because the renovation is accomplished.

This implies in case your renovation lasts for 3 months, and also you’re solely promoting your flat later, you don’t have to seek out an interim lodging within the meantime. This additionally saves you the trouble of transferring (because you’re solely going to maneuver as soon as).

Doable put on and tear. Whereas new launch ECs and condos are model new and include a one-year defect legal responsibility interval, resale models are older and thus uncovered to put on and tear. This implies having points reminiscent of water leakage, defective air-con models, cracked tiles and many others, that it’s essential to issue into your renovation funds. 

The facilities and condominium facade can also not be nicely maintained and look dated.  

Selecting between EC or condominium, whether or not it’s a brand new launch or resale unit, pares all the way down to you and your loved ones’s private housing wants and monetary standing. Hopefully, this text helps clear up any doubts you could have in regards to the nitty-gritty particulars of upgrading.

Which might you improve to, EC or condominium? Tell us within the feedback part under.

Should you discovered this text useful, take a look at 5 deadly errors Singaporeans make when upgrading to a condominium and 6 issues each lately MOPed / post-SSD vendor should keep away from when promoting their house.