Downpayment for a Condo in Singapore: How Much Do I Have to Pay?

how much downpayment do you need to buy a condo in singapore

Making a downpayment for a condo is one of the first financial commitments you have to make when purchasing this type of private property in Singapore. It's no secret that purchasing property in the +65 is particularly expensive, but exactly how much of the bill do you have to foot upfront?

In this article, we'll break down the initial costs of buying a condo, including the downpayment you have to make. This way, you'll better understand how your citizenship status, your existing number of homes and loans work hand-in-hand to affect the downpayment for a condo you wish to purchase.

Recommended article: HDB Flat to Private Property: How Much Must You Save To Upgrade Right After MOP?

What Affects the Cost of a Downpayment for a Condo in Singapore

1. Additional Buyer's Stamp Duty (ABSD)

Your citizenship and number of existing homes have a bearing on your upfront cost because these have a direct correlation on whether you need to pay ABSD and your corresponding tax rate.

This tax was first implemented on 8 December 2011 by the government to dampen the robust property investment demand by Singapore citizens and foreign buyers. Another reason for its introductions is to maintain housing affordability for locals and to let home prices grow sustainably along with economic fundamentals. The latest ABSD rates are displayed below:

Current ABSD Rates 

Type of Buyer

ABSD Rates

Singapore Citizens buying 1st residential property

-

Singapore Citizens buying 2nd residential property

12%

Singapore Citizens buying 3rd and subsequent home

15%

Permanent residents buying 1st residential property

5%

Permanent residents buying 2nd and subsequent residential property

15%

Foreigners buying any residential property

20%

Entities buying any residential property

25%

Source: Inland Revenue Authority of Singapore

With the ABSD rates above, a first-time Singaporean that's buying a condo in Singapore (the first property) doesn’t need to pay anything. But if you’re purchasing a second home, you face a 12% tax. Assuming you intend to buy a $1 million condo as your second house, you need to pay $120,000 worth of ABSD. 

As for permanent residents (PR), they are required to fork out a 5% tax for their first home purchase, and 15% tax for the second and subsequent home purchases.

On the other hand, foreigners must pay a 20% ABSD each time they purchase a residential property here. That means for a $1 million condo in Singapore, foreigners will need to pay $200,000 ABSD.

Therefore, it's easy to see why most foreign property investors prefer buying commercial properties as the ABSD doesn’t apply to such assets. If you are seeking commercial properties, please check CommercialGuru or read our commercial property buying guide

There are, of course, exceptions to ABSD. For example, under the Free Trade Agreements (FTAs), citizens or permanent residents of Switzerland, Liechtenstein, Norway, Iceland or United States don’t need to pay any ABSD for their first home purchase. 

Other methods include decoupling, buying under a child's name, and as mentioned above, buying a commercial property. 

2. Buyer’s Stamp Duty (BSD)

While the ABSD exempts some categories of home buyers, no one is exempt from paying the BSD - whether you’re a Singapore Citizen, PR or foreigner. This is because the documents affecting the transfer of ownership over the property must be stamped to make it official.

The BSD will be calculated based on the purchase price stated in the instrument to be stamped or the property’s market value, whichever is higher.

If you received a monetary discount on the selling price, it will be taken into account when computing the tax, provided that the net price still reflects the property’s actual market value.

Please note that cash discounts must be stated in the documents to be stamped, otherwise it won’t be taken into consideration when computing the BSD. Below are the current BSD rates:

First $180,000
1%
1%
Next $180,000
2%
2%
Next $640,000
3%
3%
Remaining Amount
4%

Source: Inland Revenue Authority of Singapore

Assuming you purchased a private condo that is being sold for/valued at $1 million, you need to fork out a BSD of $24,600. Here's the breakdown for calculating the BSD for this particular example:

($180,000 x 1%) + ($180,000 x 2%) + ($640,000 x 3%) = $24,600

Alternatively, you can use an online BSD calculator to check how much you would have to pay.

*note, if the property that you're buying is below $1 million, here's a shortcut method:

(3% x purchase price or market value) – $5,400

3. Loan-to-Value (LTV) and Minimum Cash Downpayment

Apart from the unit selling price, another factor that will have the greatest bearing on how much downpayment for a condo you need to pay is the LTV, which is based on the number of outstanding home loans you have. This will also affect your minimum cash downpayment.

The particulars are indicated below:

0

75% or 55%*

5% (for LTV of 75%); 10% (for LTV of 55%)

1

45% or 25%*

25%

2 or more

35% or 15%*

25%

*Take the lower LTV limit only if the loan tenure exceeds 30 years (25 years for HDB flats), or the loan period extends beyond the borrower’s age of 65.

Source: Monetary Authority of Singapore

So for instance, if your LTV is 75% (loan tenure is up to 30 years and doesn't extend past the borrower's age of 65), this means you need to pay the 25% shortfall in cash and/or CPF Ordinary Account savings. If the condo you are buying is being sold for/valued at $1 million, this means your downpayment due is $250,000.

At least 5% of this 25% shortfall has to be paid in cash to fulfil the minimum cash downpayment. So out of the $250,000 due, you will have to pay at least $50,000 in cold, hard cash.

 

Case Study: Breakdown of a Condo Downpayment

The total initial cost takes into account downpayment (cash/CPF), BSD, ABSD, Mortgage Stamp Duty, mortgage stamp duty, cost of property valuation and legal fees. Property valuation fees can cost anywhere from $300 to $500, while legal fees are an estimated $3,000.

In the below case studies, it is assumed that the property you would like to purchase a $1 million condo unit. Here is the cost breakdown, excluding mortgage stamp duty, property valuation and legal fees.  

Upfront Cost for Singapore Citizens (SC)

BSD amount

$24,600

$24,600

$24,600

$24,600

ABSD %

-

-

12%

12%

ABSD amount

-

-

$120,000

120,000

1st Loan Paid?

-

-

Yes

No

LTV

75%

55%

45%

25%

Condo Downpayment

$250,000

$450,000

$550,000

$750,000

Min Cash Downpayment %

5%

10%

25%

25%

Total Upfront Cost

$274,600

$474,600

$694,000

$894,600

*Take the lower LTV limit only if the loan tenure exceeds 30 years (25 years for HDB flats), or the loan period extends beyond the borrower’s age of 65.

 

Upfront Cost for Singapore Permanent Residents (PR)

BSD amount

$24,600

$24,600

$24,600

$24,600

ABSD %

5%

5%

15%

15%

ABSD amount

$50,000

$50,000

$150,000

$150,000

1st Loan Paid?

-

-

Yes

No

LTV

75%

55%*

45%

25%

Condo Downpayment

$250,000

$450,000

$550,000

$750,000

Min Cash Downpayment %

5% 

10%

25%

25%

Total Upfront Cost

$324,600

$524,600

$724,600

$924,600


*Take the lower LTV limit only if the loan tenure exceeds 30 years (25 years for HDB flats), or the loan period extends beyond the borrower’s age of 65.

 

Upfront Cost for Foreigners

BSD amount

$24,600

$24,600

$24,600

$24,600

ABSD %

20%

20%

20%

20%

ABSD amount

$200,000

$200,000

$200,000

$200,000

1st Loan Paid?

-

-

Yes

No

LTV

75%

55%*

45%

25%*

Condo Downpayment

$250,000

$450,000

$550,000

$750,000

Min Cash Downpayment %

N.A.

N.A.

N.A.

N.A.

Total Upfront Cost

$474,600

$674,600

$774,600

$974,600


*Take the lower LTV limit only if the loan tenure exceeds 30 years (25 years for HDB flats), or the loan period extends beyond the borrower’s age of 65.

As foreigners do not pay CPF, they do not have the option of using OA savings to pay for their condo downpayment. This means the downpayment has to be paid for fully in cash.

 

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Making Downpayment for a Condo in Singapore

As you can see from the different total upfront costs, Singapore citizens have the lowest expenditure, including downpayment for a condo, followed by permanent residents. On the other hand, foreigners face the highest cost given the 20% ABSD; compared to the 5% ABSD Singapore PRs have to pay. 

Another thing that has a substantial impact on your upfront cost is your LTV, which is mostly based on whether you have an existing home loan, so we strongly advise condo buyers to settle first their existing home loan before buying another property.

DISCLAIMER: This article should not be construed as financial advice. If you need assistance, kindly consult our experts on PropertyGuru Finance. PropertyGuru disclaims any damages or claims arising from your use of this article.

 

Other FAQ on Downpayment for a Condo in Singapore

How Much is a Downpayment on a Condo in Singapore

This is dependent on your LTV ratio and minimum cash downpayment required.

Can I Use CPF to Pay Condo Downpayment?

Yes, you can but only in part. You have to fulfil the minimum cash downpayment which is dependent on your LTV ratio.

Can Single PRs Buy a Condo in Singapore?

Yes, single Singapore PRs can buy condominiums in Singapore.

Can I Buy a Condo If I Own an HDB Flat?

Yes you can if you are a Singapore citizen. Check out our article on owning an HDB flat and a condo at the same time.

 

For more property news, resources and useful content like this article, check out PropertyGuru’s guides section

Are you looking to buy a new home? Head to PropertyGuru to browse the top properties for sale in Singapore.  

Already found a new home? Let PropertyGuru Finance's home finance advisors help you with financing it.

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