Admin Crawfort
The property market in Singapore poses significant challenges for prospective homeowners. What was once a straightforward journey has become more complex and requires careful consideration.
The conventional route of securing a Build-To-Order (BTO) flat now involves extended waiting periods. Previously, these flats required a 5-year wait, but current timeframes have increased to 6-7 years. For couples in their late twenties, they may need to wait until their mid-thirties to move into their new home.
This extended waiting period has prompted many young couples to seek alternatives, especially resale flats and condominiums. The prospect of moving in immediately has become increasingly appealing, even though these options typically come with a higher price tag than BTOs.
This guide provides comprehensive information about purchasing condominiums in Singapore, including downpayment requirements and essential considerations for first-time buyers.
Factors Influencing Your Condominium Downpayment
Several factors influence the downpayment required for a condominium purchase in Singapore:
- Loan-to-Value (LTV) Limit: This limit determines the maximum amount you can borrow from a financial institution and is contingent on your existing home loans. For those with no outstanding home loans and a loan tenure of 30 years or less (not extending beyond the age of 65), the LTV limit is 75%.
- Outstanding Condominium Downpayment: This refers to the portion of the purchase price not covered by the loan, which can be partially financed through your Central Provident Fund (CPF) savings.
- Minimum Cash Downpayment: This is a mandatory cash payment sourced from your bank account.
- Stamp Duty (BSD/ABSD): This includes Buyer’s Stamp Duty (BSD) and, if applicable, Additional Buyer’s Stamp Duty (ABSD), which must be paid in cash initially, with the possibility of reimbursement from your CPF account.
These factors are interconnected and vary depending on the purchase price of the condominium.
Calculating Your Cash Downpayment: How Much Cash Do You Need?
In most cases, a minimum cash downpayment of 5% of the condominium’s purchase price is required. However, there are instances where no cash payment is necessary, while in others, it can reach 25%.
The required cash advance is determined by several interrelated elements:
- Number of Outstanding Mortgages: The LTV limit decreases with each existing mortgage.
- Loan-to-Value (LTV) Limit: As mentioned previously, this dictates the maximum loan amount.
- Minimum Condominium Downpayment: This is the remaining sum after deducting the loan amount from the purchase price.
Standard downpayment structure for tenures below 30 years or for buyers under 65 years of age at loan maturity:
- No Existing Mortgages: With a 75% LTV limit, the minimum downpayment is 25% of the purchase price, with 5% payable in cash and the remaining 20% potentially sourced from your CPF Ordinary Account (OA).
- One Existing Mortgage: The LTV limit reduces to 45%, resulting in a minimum downpayment of 55%, with 25% payable in cash.
- Two or More Existing Mortgages: The LTV limit further decreases to 35%, requiring a minimum downpayment of 65%, with 25% payable in cash.
| Scenario | LTV Limit | Minimum Downpayment | Cash Downpayment | CPF Downpayment |
| No existing mortgages | 75% | 25% | 5% | 20% |
| One existing mortgage | 45% | 55% | 25% | 30% |
| Two or more existing mortgages | 35% | 65% | 25% | 40% |
Here’s an example for S$1,000,000 Condominium Purchase:
Let us examine the condominium downpayment process in Singapore using a scenario where you are 40 years old, have no prior home loans, and are looking to purchase a S$1,000,000 condo with a 25-year loan tenure.
Since you’re under 65 and have no outstanding mortgages, the standard LTV limit is 75%. This means you can borrow up to S$750,000.
With a 75% LTV, the remaining 25% of the condo price forms your minimum downpayment, which in this case is S$250,000.
Understanding Stamp Duty (BSD/ABSD): How Much Do You Need To Pay?
Stamp duty is a tax levied on certain property transactions in Singapore. It can be a significant cost for buyers, so it’s essential to understand how it is calculated.
Buyer’s Stamp Duty (BSD)
Buyer’s Stamp Duty (BSD) is payable on all new and resale condominium purchases. The BSD amount is calculated based on the higher of the purchase price or market value.
A deduction may be applicable if the seller provides a cash discount and explicitly states it in the contract, provided the purchase price aligns with the market value. However, additional incentives such as furniture or appliances do not qualify for this deduction.
Current BSD Rates:
- First S$180,000: 1%
- Next S$180,000: 2%
- Next S$640,000: 3%
- Remaining sum: 4%
Let’s say you’re buying a condo for S$1,000,000. Here’s how your BSD would be calculated:
| Market Value | BSD Rate | BSD Calculation | BSD Amount |
| First S$180,000 | 1% | S$180,000 x 1% | S$1,800 |
| Next S$180,000 | 2% | S$180,000 x 2% | S$3,600 |
| Next S$640,000 | 3% | S$640,000 x 3% | S$19,200 |
| Remaining S$0 | 4% | S$0 x 4% | S$0 |
| Total BSD Payable | S$24,600 |
In this example, the BSD for the S$1,000,000 condo would be S$24,600.
Additional Buyer’s Stamp Duty (ABSD)\
First-time Singaporean citizen buyers are exempt from Additional Buyer’s Stamp Duty (ABSD). However, ABSD rates apply to subsequent property purchases. Permanent residents and foreign buyers are also subject to ABSD, varying rates depending on citizenship status and the number of properties owned.
ABSD Rates
Singapore Citizens:
- 17% for the second residential property
- 25% for the third and subsequent properties
Permanent Residents:
- 5% for the first property
- 25% for the second property
- 30% for the third and subsequent properties
ABSD Exemptions
There are specific circumstances under which individuals may qualify for exemptions from paying Additional Buyer’s Stamp Duty (ABSD). These include:
- You are a citizen or permanent resident of Iceland, Liechtenstein, Norway, Switzerland, or the United States of America
- If your spouse is the sole owner of your first property, you are the sole owner of a second property.
- You may purchase a condominium under a child’s name, provided the child is at least 21.
When planning your budget for a property acquisition, it is essential to consider both buyer’s stamp duty (BSD) and ABSD.
ABSD regulations can be complex. It’s always advisable to seek professional advice from a tax consultant or real estate expert to understand how ABSD applies to your situation.
CPF and Your Condo Downpayment
In Singapore, you can tap into your Central Provident Fund (CPF) savings to help fund your condo purchase. However, you cannot pay entirely with CPF. You need a mix of CPF and cash for your downpayment.
The CPF-Cash Breakdown
5% Cash: A minimum of 5% of the purchase price must be paid in cash.
20% CPF: The remaining 20% of the downpayment can be covered using funds from your Ordinary Account (OA), assuming you have sufficient savings.
Example:
Let’s imagine you’ve set your sights on a lovely S$1,000,000 condo. Here’s how the downpayment breaks down:
- Total Downpayment: 25% of S$1,000,000 = S$250,000
- Cash Portion: 5% of S$1,000,000 = S$50,000
- CPF Portion: 20% of S$1,000,000 = S$200,000
| Factor | Calculation | Amount (S$) |
| Purchase Price | S$1,000,000 | |
| LTV Limit (no existing loans) | 75% of S$1,000,000 = S$750,000 | S$180,000 x 2% |
| Minimum Downpayment | 25% of S$1,000,000 = S$250,000 | S$250,000 |
| Cash Downpayment | 5% of S$1,000,000 = S$50,000 | S$50,000 |
| CPF Downpayment | 20% of S$1,000,000 = S$200,000 | S$200,000 |
Also read: CPF Personal Loan: What Is It? Eligibility and Requirements
The Bottom Line
Accumulating the necessary funds for a condominium downpayment in Singapore requires diligent financial planning. In addition to a full-time income, consider exploring investment opportunities and supplementary income streams to achieve your property ownership goals.
This guide provides a foundational understanding of the financial commitments of purchasing a Singapore condominium. For personalised advice, consult with a qualified financial advisor or mortgage specialist.
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