Paying the downpayment for a condo is one of the first financial commitments you must make when buying a condo in Singapore.
It’s no secret that purchasing private property in the +65 is expensive and continues to be so. The latest URA Q4 2024 real estate statistics show that for the first three quarters of 2024, the overall private housing prices increased by 1.6%. But exactly how much of the bill do you have to foot upfront?
In this article, we’ll break down the initial costs of buying a condo in Singapore, including the downpayment for condo amount. This way, you’ll better understand how your citizenship status, your existing number of homes and property loans work hand-in-hand to affect the downpayment for a condo you wish to purchase.
Thinking of Buying a Condo in Singapore? Watch This Video
Here’s a quick video for those who intend to buy a condo in Singapore.
What Affects the Cost of Condo Downpayment in Singapore
1. Downpayment for Condo: Additional Buyer’s Stamp Duty (ABSD)
Your citizenship status and the number of existing properties you own have a bearing on your upfront costs because these have a direct correlation with whether you need to pay Additional Buyer’s Stamp Duty (ABSD).
ABSD was first implemented on 8 December 2011 by the government to dampen the robust property investment demand by Singapore citizens and foreign buyers. Another reason for its introduction is to maintain housing affordability for locals and to let home prices grow sustainably along with economic fundamentals. The last time the ABSD rates were adjusted was in April 2023.
Hence, aside from the downpayment for condo, you might have to pay for ABSD. Here are the current ABSD rates.
Referencing the ABSD rates above, a Singaporean who’s buying a condo in Singapore as their first property doesn’t need to pay any ABSD. But if you’re purchasing a second home, you face a 20% tax. Assuming you intend to buy a $1 million condo as your second house, you need to pay $220,000 worth of ABSD.
As for SPRs, they are required to fork out a 5% tax for their first home purchase. For their second property purchase, SPRs will have to pay a 30% ABSD tax; for third and subsequent home purchases, SPRs will have to pay a 35% ABSD tax.
On the other hand, foreigners must pay a 60% ABSD each time they purchase a residential property here. That means for a $1 million condo in Singapore, foreigners will need to pay $600,000 in ABSD.
There are, of course, exceptions to ABSD. For example, under the Free Trade Agreements (FTAs), citizens or permanent residents of Switzerland, Liechtenstein, Norway, Iceland or the United States don’t need to pay any ABSD for their first home purchase.
2. Downpayment for Condo: Buyer’s Stamp Duty
While the ABSD exempts some categories of home buyers, no one is exempt from paying the Buyer’s Stamp Duty (BSD), whether you’re a Singapore Citizen, SPR or foreigner. This is because the documents affecting the transfer of ownership over the property must be stamped to make it official.
The BSD will be calculated based on the purchase price stated in the instrument to be stamped or the property’s market value, whichever is higher.
If you received a monetary discount on the selling price, it will be taken into account when computing the tax, provided that the net price still reflects the property’s actual market value. Please note that cash discounts must be stated in the documents to be stamped, otherwise, it won’t be taken into consideration when computing the BSD.
3. Downpayment for Condo: Loan-to-Value (LTV) and Minimum Cash Downpayment
Apart from the unit selling price, another factor that will have the greatest bearing on how much condo downpayment you need to pay is the Loan-to-Value (LTV) limit. The number of outstanding home loans you have will affect your LTV limit when buying a condo in Singapore. This will also affect your minimum cash downpayment too.
*Take the lower LTV limit only if the loan tenure exceeds 30 years (25 years for HDB flats), or if the loan period extends beyond the borrower’s age of 65.
So for instance, if your LTV is 75% (loan tenure is up to 30 years and doesn’t extend past the borrower’s age of 65), this means you need to pay the 25% shortfall in cash and/or CPF Ordinary Account savings. If the condo you are buying is being sold for/valued at $2 million, this means your downpayment due is $500,000.
At least 5% of this 25% shortfall has to be paid in cash to fulfil the minimum cash downpayment. So out of the $500,000 due, you will have to pay at least $100,000 in cold, hard cash.
Case Study: A Breakdown of the Downpayment for Condo
The total initial cost takes into account downpayment (Cash/CPF), BSD, ABSD, mortgage stamp duty, cost of property valuation and legal fees. Property valuation fees can cost anywhere from $300 to $500, while legal fees are an estimated $3,000.
In the case studies below, it is assumed that the property you would like to purchase is a $2 million condo unit. Here is the cost breakdown with downpayment for condo amounts stated, excluding mortgage stamp duty, property valuation and legal fees
