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.
Step 1 — Select Unit and Pay the Booking Fee
At the developer's sales gallery, buyers select a unit from the available stack and pay a booking fee of 5% of the purchase price. This fee is paid directly to the developer and is non-refundable except in limited circumstances (e.g., developer unable to deliver title). The booking fee is counted toward the purchase price at completion.
Upon booking, the developer issues the Option to Purchase (OTP). This is a standard form prescribed by the Controller of Housing under the Housing Developers (Control and Licensing) Act (HDA) — not a privately negotiated document.
Step 2 — Exercise the S&P Agreement
The buyer has up to 3 weeks from the OTP date to instruct a solicitor and exercise the Sale and Purchase (S&P) Agreement. The buyer's solicitor lodges a caveat against the property upon exercise to protect the buyer's interest on title.
Under the HDA, the developer must provide the S&P Agreement on a prescribed form. Key protections include a defects liability period (typically 12 months from possession), liquidated damages for late delivery, and a developer warranty on title.
Step 3 — BSD and ABSD Payment
Buyer's Stamp Duty (BSD) is payable within 14 days of signing the S&P Agreement. BSD applies on the purchase price at progressive marginal rates (1% to 6%). Additional Buyer's Stamp Duty (ABSD) must be paid within 21 days of the OTP grant date — not from S&P exercise. This means for buyers who delay exercising the S&P, BSD and ABSD due dates may fall close together.
Step 4 — Progressive Payment Schedule
New launch payments follow a prescribed Progressive Payment Scheme (PPS) tied to construction milestones, unless the developer offers the Deferred Payment Scheme (DPS):
- Upon foundation works completion: 10%
- Upon reinforced concrete framework: 10%
- Upon partition walls completion: 5%
- Upon roofing/ceiling completion: 5%
- Upon doors/windows/electrical: 5%
- Upon car parks/roads/drainage: 5%
- Upon TOP issued: 25%
- On completion/legal delivery: 15%
Each payment is triggered by the developer's architect issuing a stage certificate. Developers are not permitted to deviate from this schedule under the HDA without Controller approval.
Step 5 — Temporary Occupation Permit (TOP)
When the Building and Construction Authority (BCA) issues the TOP, the development is cleared for occupation. The developer then invites buyers to the key collection exercise. The final 25% progressive payment is triggered at this stage.
TOP does not mean the Certificate of Statutory Completion (CSC) has been issued. The CSC typically follows 1–3 years later. Legal completion (transfer of title) occurs within 3–12 weeks after TOP, depending on whether buyers use HDB or CPF funds and the conveyancing timeline.
Step 6 — Legal Completion and Title Transfer
At legal completion, the remaining 15% balance is paid, the developer transfers the strata title to the buyer, and the bank registers the mortgage. CPF funds are released at this point (not at TOP). The buyer's solicitor lodges the transfer instrument at SLA.
Agent Obligations at Each Stage
Property agents co-broking new launch units must ensure buyers receive the HDA-prescribed documents: the developer's brochure, floor plan, and the copy of the S&P Agreement before booking. CEA rules prohibit agents from pressuring buyers to commit without reasonable opportunity to review. Agents earning referral fees from developers must declare this to buyers in writing.
Key Timelines Summary
- Booking fee paid → OTP granted: same day
- OTP granted → ABSD due: 21 days
- OTP granted → S&P must be exercised: 3 weeks
- S&P signed → BSD due: 14 days
- Construction period → progressive payments at milestones
- TOP → legal completion: typically 3–12 weeks
- ABSD remission (SC couple): sell first property within 6 months of TOP
Q: Can a buyer withdraw after paying the 5% booking fee?
A: Generally no — the booking fee is non-refundable once the developer has granted the OTP. The buyer would lose the 5% if they choose not to exercise the S&P. Exceptions exist if the developer cannot deliver clear title or if there is a material misrepresentation, but these are rare and contested.
Q: Does ABSD apply on the purchase price or valuation?
A: ABSD (and BSD) applies on the higher of the purchase price or the market value at OTP date. For new launches, the purchase price is typically accepted as market value — but IRAS may query below-market transactions such as bulk purchases from related parties.
Q: Can CPF be used to pay the booking fee?
A: No. The 5% booking fee must be paid in cash. CPF funds can only be used from the S&P exercise stage onward, subject to CPF Board limits (Valuation Limit, accrued interest rules, and the buyer's CPF OA balance).
Q: What if the developer misses the TOP deadline?
A: The HDA prescribes liquidated damages (LD) for late delivery, typically calculated as a daily rate on the purchase price. The developer's solicitors will pay LD from the Project Account. Agents should inform buyers of the estimated TOP date and the LD provision so they can plan interim housing accordingly.
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.