HDB lawyer fees, conveyancing fees, stamp duty, and fees for registration and microfilming for transfer of ownership are part of the costs when you buy a resale flat. If you appoint HDB to act for you regarding the purchase or mortgage of your new home, you have to pay HDB legal fees on top of registration fees. And that’s not the only fee you’ll have to pay when you purchase an HDB resale flat!
When you buy an HDB resale flat, there are more fees to pay than just the agreed selling price. In this guide, we’ll walk you through the entire HDB resale flat process and delve into the HDB legal fees for HDB resale flats, the down payment amount for resale HDB flats, and other HDB flat resale fees and processes you may not know about.
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Cost Breakdown Guide to Buying an HDB Resale Flat
Let’s use newlywed Singaporean couple James and Lily who are purchasing their first residential property as an example.
- Combined income: $6,500 per month
- Combined CPF savings: $35,000
- Property type: 3-room HDB resale flat
- HDB resale flat price: $450,000
Based on their household income of $6,500 a month, James and Lily are eligible for the following grant amounts: $30,000 under the Enhanced CPF Housing Grant (EHG) and $80,000 under the CPF Housing Grants for Resale Flats (Families) grant.
They plan on staying within 4km of their family, so they’ll also be eligible to apply for the Proximity Housing Grant (PHG), which will qualify them for up to an additional $20,000 in grant monies. This brings their total grant amount to $130,000.
HDB Resale Fees For HDB Loans: A Breakdown
After assessing their finances and eligibility, James and Lily intend to primarily fund their new HDB resale flat with a 25-year HDB loan (assuming an LTV of 80%). They’ve decided to repay their mortgage instalments utilising their CPF monies. Here is how much they’ll need to pay.
Option fee (for granting of OTP)
Not exceeding $1,000
Cash
Option Exercise fee (for exercising of OTP)
An amount, which when including the Option Fee, does not exceed $5,000
Cash
Valuation fee
$150
Credit card
Conveyancing fee
$235.62
Cash
Stamp duty on mortgage
$500
Cash/CPF
Stamp duty (based on the $450,000 HDB resale flat price)
$8,100
Cash/CPF
HDB legal fees for acting in mortgage (conveyancing fee for the HDB loan amount of $360,000)
$561
Cash/CPF
HDB legal fees for acting in purchase (conveyancing fee for the HDB flat)
$463
Cash/CPF
Registration and microfilming for transfer of ownership
$38.30
Cash/CPF
Registration and microfilming for housing loan
$38.30
Cash/CPF
HDB Caveat Registration fee
$128.90
Cash
Title search fees
$32
Cash
CPF Home Protection Scheme (HPS) mortgage insurance
$220.70
CPF
Fire insurance (for a five-year premium)
$4.91
Cheque
Total
$15,552.73
As shown above, the buyers will need to pay about $15,553 in cash for the ‘hidden’ fees required to own an HDB resale flat. The good news is their grant monies of $130,000 will make the flat much more affordable.
If the couple had decided to go for a bank loan (assuming an LTV of 75%) and hire an external lawyer to assist them. Unlike HDB lawyer fees, a private lawyer will cost more. They would have to pay an additional $2,800 in legal fees on top of the required HDB legal fees. They would also have to come up with an extra $52,500 in cash (5% required cash amount for the downpayment).
If you’re ever unsure how much HDB legal fees you have to pay, you can make use of the HDB legal fees calculator. With the HDB legal fees calculator, you’ll get an estimate of how much you’ll have to pay for the HDB legal services provided when you buy or sell an HDB flat, or refinance your HDB loan. You can use the HDB legal fees calculator if you appoint HDB to act for you.
Note: The above table is only intended to give buyers an idea of how much they need to pay for an HDB resale flat. To get a more accurate financial breakdown, please visit the HDB Flat Portal.
Please also note that the grant money will be disbursed to their OA accounts, and then the HDB loan will be first deducted from CPF Savings, before paying for the rest.
Resale HDB Process Via the HDB Flat Portal
Now that we’ve gone through the ‘hidden’ fees you have to pay when you buy a resale flat, we’ll walk you through the process of buying an HDB resale flat:
1. Search for HDB Resale Flats on PropertyGuru
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2. Apply for the HFE letter
Applying for the HDB Flat Eligibility (HFE) letter and securing a valid one is required if you want to buy any HDB flat. The HFE letter shows you your HDB flat eligibility, CPF Housing Grant eligibility (and amount), and HDB loan eligibility (and amount) in one step. It is valid for nine months.
HFE letter involves two steps. The first is called the HFE preliminary check, whereby the HDB Flat Portal will give you a broad assessment of your various HDB home-buying eligibility statuses.
3. Apply for an HDB Loan or Loan From a Participating Financial Institution (FI)
If you’re eligible and keen on applying for an HDB loan, you can simply proceed to apply for it via the HDB Flat Portal.
Alternatively, you can request an In-Principal Approval (IPA) and Letter of Offer (LO) from six participating FIs, including all major banks in Singapore, via the portal.
4. Obtain the Option to Purchase (OTP)
An OTP is an agreement between a buyer and seller of an HDB resale flat on the sale of said HDB flat, inclusive of the price the HDB flat will be sold at.
5. Check the HDB Valuation of Your HDB Resale Flat
Only after you and the seller agree on the purchase price of an HDB resale flat can you review HDB’s official valuation of that flat. If the price you agreed to is higher than HDB’s valuation, you are said to have incurred cash over valuation (COV).
Note: COV can only be paid for in cash, is not considered as part of the Loan-to-Value (LTV) limit for HDB or bank loans, and yet it is considered for Buyer’s Stamp Duty (BSD) and Seller’s Stamp Duty (SSD).
6. If You’re Taking an FI Loan
This would be the time to request an LO to confirm that the FI you want to obtain a loan from is willing to lend you the money you need to finance your HDB resale flat.
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7. Exercise Your OTP and Submit Your HDB Resale Flat Application
Finally, you’re ready to formalise your HDB resale flat transaction. Do ensure you have all the following documents before submitting your HDB resale flat application on the HDB Flat Portal:
- OTP details
- Full address of the resale unit
- Particulars of: Sellers, Buyers, Occupiers
- Intention to apply for any grants
- Intention to finance with a loan (HDB loan or bank loan)
- Manner of Holding of HDB unit
- Any declarations regarding the purchase
When Must I Submit My HDB Resale Application?
After you have exercised the OTP, the buyer and seller will need to submit the resale application within seven days of each other’s application.
That is to say, you will have to communicate with your buyer/seller to agree on a timeframe for your respective submission of the application. If not done properly and the application period lapsed, you will have to restart the entire process again.
Completion of Resale Transaction
Once the transaction is completed, the buyer will get a confirmation letter of ownership permitting him to apply for water and electrical connections. A renovation permit will also be issued.
The refunding of the seller’s CPF monies will also be credited back into his CPF account within seven working days from the date of completion of the resale transaction.
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