How does HDB Resale Levy Impact Second-Time Property Buyers?
This article discusses what HDB resale levy is, the levy amount, and on what circumstances flat buyers have to pay, when and how to pay
Many Singaporeans who own an HDB Build-To-Order (BTO) flat eagerly anticipate the end of their 5-year Minimum Occupancy Period (MOP). Once their MOP ends, they are allowed to sell their flat. Some may want to buy an Executive Condominium (EC) to have all the amenities that come with living in a condo. Others need a larger flat for their expanding family. And some want to relocate to another estate to be closer to work, for personal reasons, or to satisfy family preferences.
If you are planning to sell your current HDB flat at the end of your MOP, you will want to know how the HDB Resale Levy will impact you financially. This could impact your decision about even selling your flat in the first place.
If you purchased your HDB flat new from a Design, Build and Sell Scheme (DBSS) or bought an Executive Condo (EC) from a property developer, or got a CPF Housing Grant, you need to determine whether you will owe an HDB Resale Levy when you buy your next home.
This article will explain the HDB Resale Levy in detail, when it’s owed, and how much it will be.
Table of Contents
Overview of Singapore’s HDB Resale Levy
How Can I Tell If I’m Required to Pay a Resale Levy?
How Much Will I be Charged for the HDB Resale Levy?
First Subsidised Flats That Were Sold Prior to 3 March 2006
How is Payment Made for the HDB Resale Levy?
When and How to Make Your Resale Levy Payment
Overview of Singapore’s HDB Resale Levy
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What is the HDB resale levy? |
The bill that you'll have to pay when selling your existing subsidised HDB flat to buy another subsidised flat from HDB. |
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How is the resale levy paid? |
The resale levy comes out of the proceeds from your sale, and any shortfall must be paid in cash. If you first sell your flat, then you must pay cash for the resale levy before you will be allowed to assume possession of your second flat. |
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How much is the resale levy? |
It depends on the type of your first subsidised housing and whether you received the grant as a household or as single. The levy can vary from $15,000 up to $55,000. |
What is the HDB Resale Levy?
The HDB Resale Levy is essentially a bill that you'll have to pay when selling your existing subsidised HDB flat to buy another subsidised flat from HDB.
If you are planning to sell your existing HDB flat, so that you can purchase another resale flat that’s being offered on the open market, you will not need to pay a resale levy. If you are planning to buy an HDB resale flat, you will not be eligible to receive a CPF Housing Grant because you have already previously got a subsidised flat directly from HDB. But you may still be eligible for a Proximity Housing Grant (PHG) if you never received one in the past.
The reason HDB gives for the levy being charged is to make sure the allocation of subsidies for public housing is fair when it comes to first-time buyers as opposed to second-time buyers. The levy reduces the subsidy for your second HDB flat or EC.
The levy ensures that public housing subsidies are fairly allocated among first-time buyers and buyers who have already purchased a subsidised flat.
How Can I Tell If I’m Required to Pay a Resale Levy?
If you purchased a subsidised flat directly from HDB in the past, either an HDB Build-To-Order (BTO) or Sales of Balance (SBF) flat or an executive condominium (EC) from a property developer, or got a CPF Housing Grant, you will need to pay a resale levy when you purchase another subsidised flat.
You will owe a resale levy in the following cases:
- When selling your subsidised flat before buying another subsidised flat from HDB
- When selling your subsidised flat before buying an Executive Condo from a property developer
You will not have to pay a resale levy when purchasing any of the following:
- A flat using the Design, Build and Sell Scheme (DBSS) from a property developer
- An HDB resale flat being sold on the open market
- A private residential home
How Much Will I be Charged for the HDB Resale Levy?
The resale levy amount is fixed depending on the type of flat you’re selling, whether you are a household or single and whether your reason for selling is to move to a larger flat, or to downsize to a smaller flat.
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First Subsidised Housing Type |
Resale Levy Amount |
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Households |
Single Grant recipients |
|
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2-room flat |
$15,000 |
$7,500 |
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3-room flat |
$30,000 |
$15,000 |
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4-room flat |
$40,000 |
$20,000 |
|
5-room flat |
$45,000 |
$22,500 |
|
Executive flat |
$50,000 |
$25,000 |
|
Executive Condominium |
$55,000 |
Not applicable |
Singles Grant Recipients Pay Half of What Households Pay
If you received a Singles Grant, you will be charged half the amount of the resale levy when you later form a family household and buy a second subsidised flat.
Elderly Get Interest Waived
If you and your spouse are each 55 years of age or older, sold the first subsidised flat you bought prior to 3 March 2006 and right-sized to a new 3-room flat or smaller during the sales launch in November 2015 onwards, you will only owe the resale levy of the percentage graded, with the interest being waived.
The resale levy owed will also be subject to a minimum of $15,000 for a 2-room flat, $30,000 for a 3-room flat, $40,000 for a 4-room flat, $45,000 for a 5-room flat, and $50,000 for selling an Executive flat. These amounts are the same resale levies owed by second-time buyers who completed the sale of their first publicly subsidised flat on or after the date of 3 March 2006.
First Subsidised Flats That Were Sold Prior to 3 March 2006
For cases in which someone sold their first subsidised flat prior to 3 March 2006, their resale levy is based on a graded percentage (see chart for further details). If you choose to delay paying the resale levy until you purchase your next flat from HDB, you will be charged the prevailing interest rate of 5% per annum.
|
First Subsidised Housing Type |
Resale Levy Amount Based on resale price of the sold flat, or 90% of its market valuation, whichever was higher |
|
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Household |
Single Grant recipients |
|
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2-room flat |
10%* or 15% |
5%* or 7.50^ |
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3-room flat |
20% |
10% |
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4-room flat |
22.50% |
11.25% |
|
5-room and Executive flat |
25% |
12.50% |
* Only applicable to 2-room flat sellers who upgrade to a larger flat type
How is Payment Made for the HDB Resale Levy?
The amount of the resale levy is determined when you reserve your second publicly subsidised flat. The levy applies no matter which type of ownership you choose (joint-tenancy or tenancy-in-common) or if the flat has a shared ownership. Payment is made from the proceeds from the sale of your flat and/or in cash. Funds from your HDB mortgage financing cannot be extended to cover payment of the resale levy.
When and How to Make Your Resale Levy Payment
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Flat Sale Timeline |
Resale Levy Payment |
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First subsidised flat was sold after taking possession of the second subsidised flat |
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First subsidised flat was sold before taking possession of the second subsidised flat |
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Monies from your CPF OA account cannot be used to pay for your resale levy. You must make the payment in cash or out of the proceeds from the sale of your flat.
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