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.
The New Launch Purchase Process
Buying a new launch condominium in Singapore involves a defined sequence of steps from initial booking to the signing of the Sales & Purchase Agreement (SPA). Understanding this process helps agents advise buyers on deadlines, costs, and rights at each stage.
| Stage | Timeline | Action / Payment |
|---|---|---|
| Booking fee | Day 0 (launch day) | 5% of purchase price paid in cash; OTP issued |
| OTP exercise period | 14 days from OTP date | Buyer must exercise OTP or forfeit booking fee |
| BSD & ABSD payment | Within 14 days of OTP exercise | Paid in cash; cannot use CPF for stamp duty at this stage |
| SPA signing | Within 8 weeks of OTP exercise | Remaining 15% of purchase price (to reach 20% down payment total including booking fee); SPA executed |
| Progressive payment | Construction milestones (24–48 months) | Loan disbursed in tranches as construction progresses; interest-only payments during this phase |
| Vacant possession (TOP) | At Temporary Occupation Permit (TOP) | Keys collected; defects inspection period begins; full P&I loan repayment begins |
| Legal completion (CSC) | After Certificate of Statutory Completion (CSC) | Final 5% released to developer; strata title issued |
The Option to Purchase (OTP)
The new launch OTP is issued by the developer on the day the unit is booked. It grants the buyer the right — but not yet the obligation — to purchase the unit at the stated price and terms. Key features:
- The OTP is valid for 14 days. If the buyer does not exercise within 14 days, the OTP lapses and the 5% booking fee is forfeited
- Exercising the OTP means signing the SPA within the subsequent period (typically 8 weeks from the OTP exercise date)
- The OTP specifies the unit number, floor, strata area (as disclosed by the developer), purchase price, and payment terms
- Buyers should have their solicitor review the OTP before the 14-day deadline — the OTP locks in the purchase price and key commercial terms
Key SPA Clauses Buyers Should Understand
The Sales & Purchase Agreement is a standard-form contract prescribed by URA under the Housing Developers Rules. Key clauses:
- Purchase price and payment schedule — the SPA sets out the full progressive payment schedule tied to construction milestones. Buyers should understand the total cash outflow at each stage
- Completion date and extension — the SPA specifies the expected TOP date. Developers can request extensions (typically up to 6 months with Controller of Housing approval). Extended delays beyond the permitted period trigger late completion interest payable to the buyer
- Defects liability period (DLP) — typically 12 months from the date of vacant possession (TOP). During the DLP, the developer is obliged to rectify defects reported by the buyer. Buyers should conduct a thorough defects inspection at TOP and within the DLP window
- Final 5% retention — 5% of the purchase price is held back by the buyer's solicitor until the Certificate of Statutory Completion (CSC) is issued. This retention provides recourse if the developer does not rectify defects
- Forfeiture on default — if the buyer defaults after exercising the OTP, the developer can forfeit up to 25% of the purchase price. Buyers who cannot complete must engage their solicitor promptly to explore options (assignment of OTP, if permitted)
Defects Inspection at TOP
At Temporary Occupation Permit, buyers are invited to collect their keys and conduct an inspection of the unit. The defects inspection is the buyer's opportunity to identify and formally report defects before the 12-month DLP begins.
Common defects to check at TOP:
- Hollow tiles (tap tiles with a coin — hollow sound indicates inadequate adhesion)
- Water seepage in bathrooms and kitchen wet areas
- Window and door alignment, sealing, and operation
- Electrical socket and switch function
- Air-conditioning system commissioning
- Paintwork — drips, missed patches, colour consistency
- Plumbing — water pressure, drainage, no visible leaks
CPF and Financing for New Launches
CPF OA funds can be used for new launch purchases, but the timing of CPF disbursement differs from resale:
- BSD and ABSD must be paid in cash — CPF cannot be used for stamp duties
- The 5% booking fee must be paid in cash on booking day
- The remaining 15% to reach the 20% minimum down payment can be funded by cash or CPF OA (subject to CPF eligibility), payable when the SPA is signed
- During the progressive payment (construction) phase, the bank disburses loan tranches and the buyer services only the interest on disbursed amounts — CPF can be used for these interest-only payments
Frequently Asked Questions
Q: Can I sell my new launch unit before it is completed?
A: Yes — a new launch unit can be sold before completion through a sub-sale. The buyer purchases the seller's rights and obligations under the SPA. Sub-sales are subject to Seller's Stamp Duty (SSD) if sold within 3 years of purchase. Sub-sales require the developer's consent and involve additional legal documentation to assign the SPA.
Q: What is the difference between TOP and CSC?
A: TOP (Temporary Occupation Permit) is issued by the Building and Construction Authority (BCA) when the building is safe for occupation. Buyers collect keys and can move in at TOP. CSC (Certificate of Statutory Completion) is issued later — typically 1–2 years after TOP — when all construction works including landscaping and external finishes are certified complete. The final 5% of the purchase price is released to the developer at CSC.
Q: What if the developer delays completion beyond the SPA date?
A: The SPA provides for extension of time by the developer (subject to Controller of Housing approval) and specifies late completion interest payable to the buyer for delays beyond the permitted extension period. The current rate of late completion interest is typically 10% per annum on all payments made, calculated from the extended completion date. Buyers should check the specific SPA terms.
Q: Can the developer change the unit specifications after the SPA is signed?
A: Minor variations are permitted under the Housing Developers Rules if the developer can demonstrate they are necessary and the specifications are equivalent or superior. Material changes require buyer consent. The SPA specifies the approved plans and specifications — any deviation that reduces the unit quality or area is a breach. Buyers should note that small strata area variances (within a tolerance) are permitted.
Q: Is ABSD payable immediately on new launch purchase?
A: Yes — ABSD is payable within 14 days of the OTP exercise date, together with BSD. ABSD must be paid in cash and cannot be funded by CPF OA. For buyers purchasing a second or subsequent property, the full ABSD must be available in cash on or within 14 days of OTP exercise. This is a cash flow consideration agents should raise with clients before they book.
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.