Disclaimer (Block 1): This article is for educational purposes only and is intended to assist CEA-registered property agents in understanding regulatory frameworks. It does not constitute financial, tax, or legal advice. LEVR's calculations are indicative only. Always verify rates and eligibility with your bank, HDB, CPF Board, or a licensed financial advisor before advising clients.
How New Launch Sales Work
New launch condominium units are sold by developers under the Housing Developers (Control and Licensing) Act. The developer must hold a Housing Developer's Licence and a Sale and Purchase Agreement (S&P) that conforms to the Controller of Housing's prescribed form. Unlike resale transactions, new launch purchases are governed by a developer's price list and a tightly structured booking process.
For popular launches, demand often exceeds supply. Developers use a ballot and appointment system to allocate booking slots. Understanding this process helps agents prepare clients well before they arrive at the sales gallery.
Before Booking Day: Preparation Checklist
Agents should ensure their clients arrive ready to book. The key preparation items:
- In-Principle Approval (IPA): The client must have a current IPA from a bank confirming the loan quantum and their TDSR compliance. Without an IPA, the client may commit to a unit they cannot finance.
- ABSD calculation confirmed: Confirm the client's ABSD status based on their current property holdings and citizenship. For upgraders, confirm whether ABSD remission applies and the timeline for the concurrent sale.
- Total acquisition cost: Purchase price + BSD + ABSD (if applicable) + stamp duty on mortgage + legal fees + GST on agent commission. Clients should not be surprised by figures they first see at the sales gallery.
- Preferred unit shortlist: Review the floor plan, stack, and orientation preferences. Have a ranked list of 3–5 units in case the first choice is taken.
- Identification documents: NRIC (Singapore Citizens and PRs) or passport plus relevant pass (foreigners). All co-purchasers must be present or provide a valid Power of Attorney.
The Ballot System
For launches attracting more interest than units available, developers typically run an e-ballot prior to the official launch date. Interested buyers (via their agents) register during a preview or expression-of-interest period. The ballot determines the appointment sequence — earlier slots get first pick from the available units.
Some launches do not ballot — they operate on a first-come-first-served appointment queue. Agents must confirm the process with the developer's marketing team before booking day so clients know what to expect.
Booking Day: What Happens at the Sales Gallery
On booking day, buyers attend their allocated appointment slot at the sales gallery. The sequence is typically:
- Unit selection: The buyer confirms their chosen unit from the available inventory at their appointment time. Once a unit is reserved, it is no longer available to later appointments.
- Issuance of Option to Purchase (OTP): The developer issues a prescribed OTP for the selected unit. The OTP sets out the purchase price, the payment schedule, and the option exercise deadline.
- Booking fee payment: The buyer pays the booking fee — typically 5% of the purchase price — to exercise the booking and secure the unit. This amount is payable by cheque or cashier's order. Most developers do not accept cash.
- OTP issued: The developer hands the buyer the signed OTP and a floor plan of the specific unit.
Exercising the OTP
The buyer has a prescribed period (typically 3 weeks from OTP issuance) to exercise the OTP by signing the S&P and paying the next instalment. At exercise, the buyer pays an additional amount so that the total paid to date equals 20% of the purchase price (5% booking fee + 15% exercise instalment), unless the buyer is taking an HDB loan (not applicable for private condos) or a different payment scheme applies.
BSD and ABSD are due within 14 days of S&P execution. The agent should remind the client that these are separate cash obligations in addition to the exercise payment — they cannot be paid from the mortgage.
Progressive Payment Schedule (PPS)
For new launches under construction, the remainder of the purchase price is paid progressively as construction milestones are certified by the architect. The standard Progressive Payment Schedule is prescribed by the Controller of Housing:
- Foundation work: next tranche due.
- Reinforced concrete framework: next tranche due.
- Partition walls: next tranche due.
- Roofing / ceiling: next tranche due.
- Doors, windows, electrical wiring: next tranche due.
- Car park: next tranche due.
- Temporary Occupation Permit (TOP) issued: a further tranche, and the buyer takes possession.
- Certificate of Statutory Completion (CSC) / Legal Completion: final balance payable.
Each progressive payment notice triggers a payment obligation within a prescribed period (typically 14 days). Buyers using a bank loan will have the bank drawdown loan amounts progressively as each stage is reached. Buyers using CPF should have the relevant CPF withdrawal authorised in advance to avoid payment delays.
Developer Discounts and Deferred Payment Schemes
Developers may offer early bird discounts, loyalty rebates, or furniture vouchers as incentives. These do not reduce the legal purchase price for BSD/ABSD assessment — stamp duties are assessed on the full contractual purchase price. Agents must clarify this distinction when explaining developer promotions to clients.
Some launches offer a Deferred Payment Scheme (DPS) — the buyer pays a larger upfront deposit (typically 20%) but defers the remaining 80% until TOP. DPS units typically carry a price premium. Agents must check whether DPS is available for specific units before representing it as an option.
FAQs
Q: Can my client change their mind after paying the booking fee but before exercising the OTP?
A: Yes, but the booking fee (typically 5%) is forfeited. If the client decides not to proceed after the OTP is issued, they notify the developer and lose the booking fee. There is no further financial obligation at that point — the S&P has not been signed.
Q: When does BSD and ABSD need to be paid for a new launch?
A: BSD and ABSD are payable within 14 days of S&P execution (i.e., OTP exercise). They cannot be paid from the mortgage — the buyer must have cash available for stamp duties at the time of exercise.
Q: Can a foreign buyer purchase a new launch condominium?
A: Yes. Foreign nationals (non-SC, non-SPR) may purchase private condominium units. They pay ABSD at the prevailing rate for foreigners (60% as of 2024). Foreigners cannot purchase HDB flats, executive condominiums within their first 10 years, or most strata landed property.
Q: What is the difference between TOP and CSC for payment purposes?
A: Temporary Occupation Permit (TOP) means the building has been inspected and is safe to occupy — buyers can take possession. Certificate of Statutory Completion (CSC) is the final legal completion where all construction requirements are met and full legal title transfers. The final balance payment is due at CSC, not TOP.
Q: Is the agent's commission paid by the developer or the buyer?
A: For new launch transactions, the developer pays the agent's commission — the buyer does not pay a separate buyer's commission. The commission rate varies by developer and project, typically 3–5% of the purchase price. Agents must disclose commission arrangements to their clients.
Disclaimer (Block 3): LEVR's calculator outputs are estimates based on inputs provided and current regulatory parameters as known at time of publication. They are not a guarantee of borrowing capacity, stamp duty liability, or CPF eligibility. Regulatory thresholds and rates may change. Always verify with IRAS, your bank, or a licensed financial advisor before making financial decisions.