Can’t Wait for Your BTO Flat to Be Built? Here’s How to Cancel Your BTO Flat Application (Without Incurring Any Penalties)

In May 2021, the government announced that you could appeal to cancel your BTO application without incurring any BTO cancellation penalty if you had an urgent need for a home. This procedure was designed for those whose flats faced construction delays as a result of COVID-19.

There hasn’t been news around extending this possibility after the pandemic, so it is safe to say that for now, they are likely to only consider waiving the penalty for flats that that are still facing delays due to the pandemic.

So, if you balloted for a flat prior to or during the pandemic, it is still under construction and your key collection date has been pushed back, technically you might be able to cancel your flat penalty-free.

However, note that citing a construction delay will not be not enough. You’ll have to prove extenuating circumstances in order to have your appeal considered.

In addition, remember that many of the affected flats received notice that construction would be delayed. You’ll thus have to have a convincing reason for needing to cancel now despite knowing about the delay a long time ago.

So, how can you cancel your BTO application without penalties? And if you can’t do so penalty-free, what are the penalties involved? Read on to find out.

As mentioned above, if your BTO flat project is delayed and you want to cancel your application without incurring any penalty charges, you can make an appeal on HDB’s site via MyRequest@HDB. The HDB will evaluate your case based on your circumstances.

Want to cancel your application for other reasons instead? Depending on which stage of the BTO application you’re at, you may need to forfeit the option fee and/or downpayment for the flat.

From August 2023 onwards, first-time homebuyers who register one non-selection will be relegated to second-timer status for a year.

Cancelling a BTO flat application can be costly and could amount to thousands of dollars forfeited, so before signing on the dotted line, make sure you are clear about what you want, and weigh all your options carefully before you decide to cancel if it comes to that.

If you’re cancelling your application before you’ve selected your flat (i.e., before you’ve paid the option fee), then you don’t have to pay any penalty (bar the $10 administrative fee).

However, if you cancel your flat application for the second time, you will have your first-timer priority suspended for a year. In other words, you won’t get 2X the ballot chances for a year.

You will need to forfeit the option fee. How much your option fee (and hence penalty) is depends on your flat type.

Additionally, you have to wait a year before you can apply for a new HDB flat, DBSS flat or executive condominium (EC) from a developer, a resale flat with CPF Housing Grant, or a resale flat that’s been selected for SERS, or take over a subsidised flat via outright transfer.

If you want to back out of your BTO flat application after signing the Agreement for Lease form (but before key collection), you would need to submit a request via MyRequest@HDB.

On top of that, you will also need to forfeit 5% of the purchase price and any legal fees already incurred. However, you can try to appeal to IRAS to refund the stamp duty paid by engaging the help of the HDB or your lawyer.

Similarly, you have to wait a year before you can apply for a new HDB flat, a DBSS flat or EC from a developer, a resale flat with CPF Housing Grant, or a resale flat that has been announced for SERS, or take over a subsidised flat via outright transfer.

On top of the penalties mentioned above, if you have taken any grants, you would also need to refund them (with interest).

If you’re waiting for the completion of your BTO flat or Sale of Balance Flat (SBF) and do not wish to rent a home, you can apply for a flat under the PPHS.

Under this scheme, married couples or families can rent an interim flat at a subsidised price from the HDB. Rents start from $400 a month for a 2-room flat in Marsiling, up to $1,328 for a flat (comparable to a 5-room flat) at Singapore Polytechnic in Clementi or Temasek Polytechnic in Tampines. You can view the full rental rates and eligibility conditions here.

Aside from the monthly rent, you would also need to pay a 1-month deposit and stamp duties.

PPHS exercises happen once every two months, from the first to the 14th of the month. You can submit your application via the MyHDBPage. If successful, you’ll be invited for a flat selection the following month.

Take note, however, that demand for PPHS flats is high—there were 2,350 applications in 2020 but just 160 flats available. The government recently announced that they will double the number of available flats from 2,000 to 4,000 by 2025.

On 1 July 2024, the government launched the Parenthood Provisional Housing Scheme (Open Market) Voucher Scheme, also known as the PPHS (Open Market) Voucher Scheme.

The scheme offers financial help for eligible families renting HDB flats or bedrooms on the open market while waiting for their BTO flats to be built.

The vouchers will be effective for one year from July 2024, and eligible families will receive $300 per month as reimbursement for each month of their rent.

To be eligible, you must have booked an uncompleted HDB flat as a married couple (with at least one first-timer), fiancé/fiancée (with at least one first-timer) or divorced/widow with children.

Only Singapore citizens living with another Singapore citizen or PR are eligible, and the monthly household income on your BTO flat application must not exceed $7,000. None of the members of your household must own any residential property other than co-ownership of an HDB flat with parents or siblings.

There is another condition for those applying as a fiancé/fiancée—you must get married within 3 months of the qualifying tenancy period—that is, the rental period during which you wish to receive the PPHS (Open Market) Vouchers. So, if you had planned to get married only when collecting the keys to your BTO flat, those wedding bells will have to be pushed forward.

To apply, you can submit an application here once your NRIC address has been updated with ICA and stamp duty on your tenancy agreement has been paid.

If you need an interim place to stay while waiting for the completion of your BTO flat, or after cancelling your BTO flat application, you can choose to rent a home.

Renting is a good short-term solution if you need a place to stay immediately; there’s less financial burden compared to buying a home and you also don’t have to worry about renovation or buying new furniture since most homes are in move-in ready condition.

From HDB flats to private condos, there’s also a wide range of properties to rent, and you can choose to rent anywhere across the country. Furthermore, renting is more flexible than buying as you’re not tied down by a mortgage and can move into another home when your contract ends.

However, rent isn’t cheap in Singapore; expect to pay at least $1,500 for a 2-room flat, $2,000 for a 3-room flat, and $2,700 for a 4-room flat and above. For private condos, a studio apartment starts from $1,200 per month and prices go higher the bigger the condo.

If you’re considering renting, check out available homes for rent on PropertyGuru now.

HDB resale prices rose 1.8% in the first quarter of 2024, showing signs of stabilising after larger price increases earlier in the year, with prices rising by 8% in the first quarter of 2024 compared to the previous quarter. As demand slows on the resale market, this could be a good time to buy a flat.

The good thing about buying a resale flat is that you can pretty much buy in any location and pick the type of flat you want, provided that you meet the HDB’s eligibility conditions. You’re also eligible for higher CPF Housing Grants compared to BTO flats, and don’t have to wait for your flat to be completed if you need to move into a home urgently.

However, resale flats tend to be more expensive than BTO flats, and with cash over valuation (COV) on the rise, expect to pay a higher premium for a choice flat, especially if it’s a bigger flat or one that’s located in a good area.

Also, if the flat’s remaining lease is less than 20 years and isn’t enough to cover the youngest buyer until the age of 95 years old, the amount of CPF and loan you can use or receive will be limited. Last but not least, a higher price means you’ll also have to fork out a higher downpayment and since there’s no Staggered Downpayment Scheme like for BTO flats, you’ll need to fork out more funds in one go when you sign the lease.

Looking for a resale HDB flat? Find one for sale on PropertyGuru.

SBFs are unsold flats from previous BTO exercises that are subsidised by the Government, so they’re more affordable than resale flats (though slightly more expensive than BTO flats). SBFs are launched along with BTO flat exercises, typically in May and November, and they come with fresh 99-year leases.

As they’re ‘leftover’ flats from previous BTO sale exercises, either construction has already started, or the flats have already been built, which means the waiting time is also shorter. SBF launches are spread across mature and non-mature estates, so it helps if you have in mind a particular estate that you want to live in. You’ll also be eligible for CPF Housing Grants including the Enhanced CPF Housing Grant (EHG).

While the wait time is much shorter than that for BTO flats (you can move in within three months, depending on the flat’s construction stage), the process is still slower than the purchase of a resale flat, which can be completed in as little as two months. Also, there are fewer flats up for selection during launches, which means it’s harder to secure a flat.

However, you can’t apply for an SBF and BTO flat at the same time, which means that you can only apply for an SBF after cancelling your BTO flat application.

If you need a home urgently and plan to buy one rather than rent, go for a resale flat. You won’t have to worry about delaying your plans to start a family and there’s also a wider pool of flats available in different locations. Furthermore, resale flat buyers are eligible for more grants, which helps to soften the blow. Alternatively, you may also consider applying for SBF if you want a newer flat in a particular estate, but know that you can only apply for one after canceling your BTO flat application.

If you’re on a tight budget and decide to wait for the completion of your BTO flat, you may consider applying for a flat under the PPHS. Renting a PPHS flat is more affordable than renting on the open market, but the flats are not easy to secure. Alternatively, you can rent an HDB flat on the open market and have a portion of your rent reimbursed through the PPHS (Open Market) Voucher Scheme.

If you’re in urgent need of a home, not on a tight budget, and need a place to stay in the interim, consider renting a property. Renting provides more flexibility and convenience, enabling you to choose a home that’s closer to your workplace, parents’ home, schools, etc. The drawback, though, is that it’s more expensive in the long run.

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