Buying a property is a significant event, given the quantum of money involved.
Are you 100% clear of the cashflows and key dates when you buy a unit at a new private residential unit ? This article is dedicated to all the buyers of new launches out there.
Example: Purchase of a $2million unit on 21 Sep 2024. Assume no Additional Buyer Stamp Duty applies
Step 1
21 Sep 2024: Pay 5% ($100,000) to the developer. In return, you will receive an Option to Purchase from the Developer. This 5% must be in cash. CPF and Loan cannot be used for this 5%.
5 Oct 2024: Within 2 weeks from receiving the OTP, you need to confirm the law firm which is representing you and forward the OTP to the Law Firm and Bank (if you are taking a mortgage loan, make sure the law firm is on the bank's panel of law firms). The developer will send the Sale & Purchase Agreement to the appointed Law Firm. The lawyer will vet and advise you if there is anything untoward. You will receive the S&P by 5 Oct 2024
26 Oct 2024: You have 3 weeks to exercise the OTP and sign the Sale and Purchase Agreement (by 26 Oct 2024). If you want to use CPF to pay for the Stamp Duty $69,600, ensure the law firm apply CPF usage for stamp duty to IRAS. Ensure the law firm is on the CPF panel otherwise extra fees may be incurred. If you choose not to exercise the option, the developer will retain 1.25% of the Option fee ($25,000) as Penalty and you will get back 3.75% ($75,000).
16 Nov 2024: Pay the balance down payment (15% or $300,000). This can be from CPF.
Total payable for the Sale and Purchase of the unit during this new launch: $469,600
a) $400,000 (20% of the unit purchase price, also known as Downpayment)
b) Buyer Stamp Duty $46,600
Stay tuned for the article on Progressive Payment Estimates----timelines after you have completed the Sale and Purchase.
Comments