If you are looking to purchase your first home this year, chances are that you've planned your budget. However, have you also factored in other expenses that come with a new HDB flat?
Here's an overview:
1. Application Fee
Upon submission of your online application, you will need to pay a non-refundable $10 fee via credit card.
2. Option Fee
This is paid when you book your flat and the amount depends on the flat type, ranging from $500 to $2,000.
It forms part of your downpayment. If you are taking a HDB loan and have enough Ordinary Account (OA) savings for your downpayment, it will be reimbursed in cash. Otherwise, it goes towards the cash portion of your downpayment.
3. Stamp Duty & Legal Fees
Stamp duty pays for a stamped certificate documenting your ownership of the flat. It is based on the flat's selling price and is calculated as such: 1% on the first $180,000, 2% on the next $180,000 and 3% on the remainder. You may use the IRAS Stamp Duty Calculator to work it out: https://mytax.iras.gov.sg/ESVWeb/default.aspx?target=MSDCalculatorIntro
Legal fees include Conveyancing Fees and Caveat Registration Fees for the preparation of documents in processing your purchase. The former is based on your flat's selling price while the latter is $64.45.
If you're taking a HDB loan, this amount is 10% of the flat's selling price. If you're taking a bank loan, it varies according to the loan ceiling.
5. Home Protection Scheme
The HPS is an insurance scheme to protect you and your family from losing the flat in the event of permanent disability or death. If you are using your OA savings for monthly instalments, this is mandatory.
6. Fire Insurance
If you're taking a HDB loan, you are required to buy basic fire insurance. Premiums range between $1.50 to $7.50 every five years, depending on your flat type.
You can read more on the costs and fees of buying a new HDB flat at: http://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/new/finance/costs-and-fees
Information accurate as at 15/1/2018.