How to Buy a New Launch Condo in Singapore: The Ultimate 2020 Guide

building under construction during sunset

Are you looking to upgrade from an HDB to a condo?

Or are you buying your first new launch condo in Singapore?

Whether it is your first or second purchase, buying a property in Singapore is an important decision.

With the ever-changing government regulations and loan restrictions, it can be overwhelming, especially for a first-time property buyer.

In this post, the complete ultimate guide on how to buy a new launch condo in Singapore,  I’ll share tips and things to look out for from the start until after you have collected your keys.

You’ll also learn why some property developers are giving huge incentives and discounts.

These are information many buyers wished they knew before buying their first new launch condo. It won’t cost you a thing — other than a few minutes of your time.

Let’s dive in.

Step 1: Check your finance capability

  • Loan to Value Limit(LTV) for Private Residential Property

loan to value limit for private residential property

If this is your 1st housing loan, you are eligible to loan up to a maximum of 75% of the purchase price. You are required to pay a minimum of 5% cash downpayment. The remaining 20% can be paid using your Central Provident Fund(CPF) or Cash.

If you are currently paying a mortgage for an existing housing loan, and this is going to be your 2nd housing loan, you are eligible to loan up to a maximum of 45% of the purchase price. You are required to pay a minimum of 25% cash downpayment.

The remaining 30% can be paid using your CPF only if you have set aside the current Basic Retirement Sum(BRS) of $90,500* before you can use your excess Ordinary Account savings for the purchase.

*Basic Retirement Sum(BRS) for the current year 2020 is $90,500. It will increase every year on 1st January.


James, age 36 wants to buy a new launch condo in Singapore using a bank loan. He is buying his 1st property. What are his choices?

Scenario 1: 36(Age) + 25(Loan tenure) = 61

He will finish repaying the loan before 65 years old and it is within a 30-year loan tenure, which means that he can borrow up to 75% and 5% cash downpayment.

Scenario 2: 36(Age) + 30(Loan tenure) = 66

He will only finish repaying the loan past 65 years old, which means that he can only borrow up to 55% and 10% cash downpayment.

Mr & Mrs Tan, age 42 wants to buy a new launch condo in Singapore. This will be their 2nd property and 2nd loan. What are their choices?

Scenario 1: 42(Age) + 20(Loan tenure) = 62

They will finish repaying the loan before 65 years old, and it is within a 30-year loan tenure, which means that they can borrow up to 45% and 25% cash downpayment.

Scenario 2: 42(Age) + 25(Loan tenure) = 67

They will only finish repaying the loan past 65 years old, which means they can only borrow up to 25% and 25% cash downpayment.

*From June 2013, Monetary Authority of Singapore(MAS) introduced the use of the income-weighted average age(IWAA) for the calculation of loan tenure. IWAA only affects joint applicants of a property and it serves to provide a better gauge of their combined ability to repay the loan.

*Please note of the lower loan amount and higher cash downpayment for loan tenure above 30 years and/or repayment age after 65 years old.

From October 2012, MAS regulations restrict the maximum tenure of all new residential property loans to be capped at 35 years.

  • Total Debt Servicing Ratio(TDSR)

total debt servicing ratio for property loans

TDSR is a framework implemented by MAS in June 2013 for all property loans granted by financial institutions to individuals.

It is used to access your debt servicing ability, taking into consideration your other outstanding debt obligations.

Before any bank can approve your loan, they will first have to take a look at your TDSR. Under the TDSR framework, any property loan cannot exceed the 60% threshold of your gross monthly income.

You will also need to take into account other existing debt obligations such as your monthly car loan, credit card bill, student loan, personal loan and guarantor for other loans. All of these will reduce the maximum amount of loan you can borrow.

There is also a 30% hair-cut off variable income on individuals who are self-employed, such as insurance agents and freelancers.

Take note that fixed bonus and commission are counted as variable incomes and subjected to 30% hair-cut.

Housing loans are subject to changing interest rates. When you take a housing loan, the bank doesn’t just use the current rate; they’ll implement a “stress test”, to see if you can handle sudden spikes in interest rates.

This “stress test” is now standardized at 3.5% for residential properties. In other words, you must maintain a TDSR of 60% or under, even if interest rates were to rise to 3.5%.


Scenario 1: James is an employee drawing a fixed monthly income of $10,000. He is servicing a monthly car loan of $1000 and a monthly credit card payment of $1000. How much mortgage can he borrow?

TDSR 60%: $10,000 x 60% = $6,000

Amount eligible for monthly installment: $6,000 – $1,000(car loan) – $1,000(credit card) = $4,000

Scenario 2: James is an employee drawing a fixed monthly income of $7,000 and a monthly bonus of $3,000. He is servicing a monthly car loan of $1000 and a monthly credit card payment of $1000. How much mortgage can he borrow?

30% hair-cut off variable income: $3,000 x 70% = $2,100

TDSR 60%: ($7,000 + $2,100) x 60% = $5,460

Amount eligible for monthly installment: $5,460 – $1,000(car loan) – $1,000(credit card) = $3,460

Scenario 3: James is self-employed, drawing a monthly commission income of $10,000. He is servicing a monthly car loan of $1000 and a monthly credit card payment of $1000. How much mortgage can he borrow?

30% hair-cut off variable income: $10,000 x 70% = $7,000

TDSR 60%: $7,000 x 60% = $4,200

Amount eligible for monthly installment: $4,200 – $1,000(car loan) – $1,000(credit card) = $2,200


Step 2: Get an In-Principle Approval(IPA) from a bank

IPA is a guarantee agreement with a bank, stating the promise to grant you a housing loan when you need it during the validity period. The validity period is usually 7 to 30 days depending on different banks.

The bank will grant an IPA based on your credit history as well as adhering to MAS’s LTV and TDSR regulations.

It is recommended to choose the bank that offers the most competitive rates. You can compare the latest housing loan rates from MoneySmart.

One major mistake to avoid when buying a new launch condo in Singapore is paying for the Option to Purchase, only to realise afterwards that you cannot get a loan, therefore losing your 1% deposit fee.

  • Mortgage Duty

The stamp duty for mortgage document is 0.4% of the loan amount granted, up to a maximum amount of $500.


Scenario 1: Assume a loan amount of $300,000 is granted on the mortgage

Mortgage Duty = $300,000 x 0.4%

= $1,200

= $500.00(maximum amount)

Scenario 2: Assume a loan amount of $80,000 is granted on the mortgage

Mortgage Duty = $80,000 x 0.4%

= $320

  • Conveyancing Fees

You will need to engage a solicitor from a law firm to act for you and handle the legal matters.

The bank that you choose to take a mortgage loan from will usually recommend a law firm from its panel.

However, you are not obliged to use them, so look around for a law firm that offers the most competitive rates.

A typical conveyancing fee will cost around $2,500 to $3,000. The fees consist of mortgage stamp duty, CPF legal fee, conveyancing account fee, professional legal fee and GST.


Step 3: Stamp Duties

Stamp duty is a tax on dutiable specified documents relating to any immovable property in Singapore. The amount of tax payable is calculated based on the purchase price or market value of the property(whichever is the higher amount).

Stamp duty in Singapore is implemented as a cooling measure to ensure a stable and sustainable property market.

There are three types of stamp duties:

  • Buyer’s Stamp Duty(BSD)

You are required to pay BSD for the sale and purchase of a new launch condo in Singapore. BSD will be computed on the purchase price of your condo unit.

buyer stamp duty for residential property

  • Additional Buyer’s Stamp Duty(ABSD)

You are required to pay ABSD on top of the BSD if you fall under the following categories:

  1. If you are a Singapore Citizen buying your 2nd residential property
  2. If you are a Singapore Permanent Resident
  3. If you are a Foreigner
  4. If you are an Entity

ABSD will only take into account the number of residential properties owned by you.

If you are jointly purchasing the new launch condo with another buyer of different profile, the profile with the highest ABSD rate will apply on the purchase price.

You can calculate the amount of BSD and ABSD payable from MoneySmart.

additional buyer stamp duty for residential property

*Please note that ABSD remission is available for a married couple with at least one Singapore Citizen spouse jointly purchasing the property, where both the spouses do not own any residential property at the time of purchase.

*Under the respective Free Trade Agreements(FTAs), Nationals or Permanent Residents of the following countries will be accorded the same Stamp Duty treatment as Singapore Citizens:

  1. Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland
  2. Nationals of the United States of America
  • Seller’s Stamp Duty(SSD)

You do not have to worry about SSD unless you sell off your condo unit within the holding period of three years.

The holding period is calculated from the date when you sign the Sale and Purchase Agreement(S&P).

seller stamp duty for residential property


Step 4: Sale Process of New Launch Condo

  • Option To Purchase(OTP)

After you have shopped around and visited the show flat of your ideal condo, now it’s time to decide whether or not to go ahead and make a deposit.

The option fee to get OTP for a new launch condo in Singapore must be a minimum of 5%, but it cannot exceed 10% of the purchase price. The standard practice is 5%, and the payment must be in cash only.

*Please note that the OTP is not assignable, there is no ‘and/or Nominee clause’. This is to prevent buyers from speculating and ‘flipping’ the OTP by selling it to others.

  • Sale and Purchase Agreement(S&P)

The developers will deliver the S&P to you within 14 days. You must exercise the S&P agreement within three weeks by signing it. At this stage, a contract is formed.

You will proceed to pay 20%(including the option fee) to the developer. You have up to 8 weeks from the option date to pay.

*Please note if you fail to exercise the Option to Purchase(OTP), the developer will only refund 75% of your option fee within four weeks of expiry of the OTP.

*Please note if you change your mind after signing the S&P, the developer will forfeit 20% of the purchase price and take back the unit.

  • Paying Stamp Duties

You will need to pay Buyer’s Stamp Duty(BSD) and Additional Buyer’s Stamp Duty(ABSD)(if applicable) within 14 days of the date of execution of the Sale and Purchase Agreement(S&P).

Inland Revenue Authority of Singapore(IRAS) takes a severe view on non-payment of stamp duty. Penalties of up to 4 times the stamp duty owed will be imposed on you if the stamp duty is not fully paid or not paid on time.

sale process summary of buying a new launch condo

payment schedule for new launch condo project in singapore

Step 5:  Progress Payment Schedule

  • Stages of building and progress payments

There are ten stages of building and progress payments. At this point, you would have cleared the first two stages. The table below shows all ten different stages:

10 stages of progress payment schedule

*Please note that you will be charged 7% Goods and Services Tax(GST) at every payment stage.

During the progress payment period, if payment is unpaid for more than 14 days after the due date, the developer may treat it that you have repudiated the contract. You shall pay interest on the overdue amount, 14 days interest at 2% above base rate.

The developer will then serve you a 21-days notice in writing to complete payment before they can annul the contract and exercise their rights.

If you still do not make the payment, the developer shall forfeit 20% of the purchase price and repossess your unit to resell it.


late payment flow for progress payment

  • Temporary Occupation Permit(TOP)/Certificate of Statutory Completion(CSC)

When the developer has finished construction, they will apply to the Commissioner of Building Control for a TOP and CSC. Your condo can only be occupied when a TOP or CSC is granted.

Once your unit is ready to hand over, the Notice of Vacant Possession will be served to you through your solicitor. Your solicitor, upon receipt of the notice, will notify you to make the necessary 25% payment.

Your condo unit’s keys will be delivered within three weeks after receipt of the payment due.

  • What is the difference between Temporary Occupation Permit(TOP) and Certificate of Statutory Completion(CSC)?

TOP is issued when the building is finished and ready for vacant possession.

However, it does not mean that the whole project is completed such as the common areas.

CSC will only be issued when the whole condominium project is completed according to the approved building plans. CSC must be obtained within one year from the date of TOP.


Step 6: Defects Liability Period

After you have collected your keys, it is not over yet!

You will have 12 months of defects liability period to check for all kinds of defects in your condo unit.

The developer is obligated to rectify any defect in your unit, the common property or the condominium project within 12 months from:

  • The date the developer delivers vacant possession of the unit to you; or
  • The 15th day after you receive notice that the Temporary Occupation Permit(TOP) has been issued and that the roads, drainage and sewerage works serving the condominium project have been completed, whichever is earlier

Defects can range from poor quality or materials to building not constructed following specifications and plans.

If this is the first time you are buying a new launch condo in Singapore, it is recommended that you seek help from an experienced friend or an independent contractor specialising in defects inspection.


#Transfer of Property Title

Have you seen the term “Expected Date of Legal Completion” when you visited a property developer’s website and wondered what it means?

It is the completion of the conveyancing of strata title to you. The completion of the sale and purchase of a new launch condo in Singapore only takes place when the developer conveys the legal title of the unit to you.

You can now view for free the titles and plan information of your private properties with digitised records registered in your name from SLA MyProperty portal.


#Remedies for Breach By Developer

  • Shortfall in area

What happens if your unit size is smaller than what you have paid for?

Under the Housing Developers(Control and Licensing) Act, an error margin of 3% has been set.

If the error or shortfall is less or equal to 3%, there shall be no reduction in selling price.

However, if the error or shortfall is more than 3%, there shall be a reduction in the purchase price for every square metre of deficiency that is more than 3%.

  • Cannot deliver vacant possession

In the event whereby the property developer fails to deliver vacant possession of the condo unit to you, liquidated damages are to be calculated daily at the rate of 10% per annum on the total sum of all the instalments paid by you.

Although this is very uncommon in Singapore, it does not mean that it won’t happen. You can read more about such cases here.


#Developer’s Incentives and Discounts

Property developers are getting creative to stand out from the crowd, especially those with unsold units.

Mont Botanik Residence in the Hillview area was giving out $50,000 vouchers for Jaguar car with every unit purchased. The promotion was later replaced by a 3% discount for the units.

Kingsford Waterbay organised a lucky draw, and the prize was a BMW car worth more than $100,000.

However, such incentives and discounts are not typical, and there is a reason for such a move.

Property developers are subjected to Additional Buyer’s Stamp Duty(ABSD) as well to prevent them from hogging residential units during a bear market.

Imagine if every developer were to hold on to their units and only release it for sale during a market uptrend. That would certainly be unfair to buyers and disrupt the property market in Singapore.

Under ABSD rules, property developers need to sell all units of housing accommodation in the development within five years of acquiring the land site.

If a developer fails to so, it will have to pay up 25% remissible ABSD plus 5% per annum interest on the land purchase price. Comparing this to the incentives and discounts they are offering is insignificant.

Therefore, if you can spot a project that is nearing its ABSD dateline, you might find yourself a bargain!


#Buying Process Summary of New Launch Condo

9 stages of a new condo buying process summary



With about 60 new launch condos in 2019 and 37 new launch condos in 2020, you are certainly spoiled for choices.

There are no further cooling measures expected this year, but please be aware of the rising mortgage interest rate, also known as Singapore Interbank Offered Rate(SIBOR).

As buying a property in Singapore is one of your most important and expensive decisions in life, please do take the time to plan and decide carefully.

Often it is easy to get overwhelmed by emotions and suffer from buyer’s remorse later on.

Everyone’s needs are different. There is no one perfect condo project.

If you are buying for your own stay, your needs can be very different from someone buying for investment.

Therefore, make a list of your priorities and do your research.

After buying your new launch condo, check out this guide for information on how to calculate and pay your property tax.

Are you looking to find out about the latest new launch projects? Contact me @ 9762 1726 or email to

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