Buying a property in Singapore is a huge financial commitment. Once you have settled on a price with the home seller, you will be required to fork out some monies to complete the purchase. This article is to serve as a guide to home buyers with regards to the costs required when purchasing a private property in Singapore. The costs are listed in the chronological order of most transactions.


1) Option Fee

Typically this is 1% of the purchase price. This acts as a consideration for the property. You should issue this amount in the form of a cheque to the home seller. The name written on the cheque should tally with any title search which was done to confirm the identity of the seller. It is also good practice to write on the back of the cheque the purpose of the cheque and the offered price. The option fee typically gives the buyer a 14 day option period to exercise the option.


2) Option Exercise Fee

The option exercise fee is usually 4% of the purchase price. This together with the option fee forms the deposit. Once the option is exercised, the transaction is legal and binding on both the sellers and the buyers.


3) Buyer’s Stamp Duty

This stamp duty has to be paid in cash initially. Your lawyer will apply to CPF board to have the amount refunded to you in cash from your CPF Ordinary Account if there are sufficient funds. The formula to compute your Buyer’s Stamp Duty can be found here.


4) Additional Buyer’s Stamp Duty

This applies to Singaporeans buying their 2nd property, Permanent Residents, Foreigners and Companies. Similar to buyer’s stamp duty, you will need to fork out this amount in cash before applying for a refund from your CPF Ordinary Account. For a full breakdown of the rates for each type of buyer, please refer to my previous guide which can be found here: Property Stamp Duties in Singapore.


5) Legal Fees

Typically these fees range from about SGD$2,500 to $3,000. The fees vary among lawyers. It would be prudent to note that an expensive lawyer does not mean better service. Conveyancing is rather straightforward in most cases and I usually recommend clients to go with the layer which they find most comfortable with in terms of service as well as price.


6) Stamp Duty for Mortgage Documents

This fee is only required if a loan is obtained from a financial institution like a bank. The stamp duty rate is 0.4% up to a maximum of SGD$500. You can pay this amount either through cash or CPF.


7) Valuation Fee

The property would require a valuation if a loan was obtained. The valuation fee varies around SGD$500.


8) Any Additional Cash and CPF

If this is not your first property loan, there are loan restrictions as to the amount of loan you can take. The shortfall would have to be covered using cash. You should understand the home loan limits before making a purchase especially if you have a pre-existing mortgage.


This article is to serve as a guide. When in doubt, please contact an experienced property agent for advice.


Yours Sincerely,
Daryl Lum


p.s. you may also be interested in this article which I wrote previously. A guide to purchasing a resale private property in Singapore