Upgrading From HDB to Condo — What To Look Out For

Despite the increasing property prices including condominiums in Singapore, the demand for private property is growing steadily, “especially in non-central areas, outstripping household income growth” according to a recent Channel NewsAsia article.

Some homeowners may choose to sell their HDB first before buying a condo while others may buy a condo first before selling their HDB. Whichever decision you make, upgrading from a HDB to a condo will make a significant impact on your financial situation. Here’s our quick guide on the key factors to consider and what steps to take when upgrading to your ideal condo.

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Key Factors To Consider When Upgrading To Condo

Overall cost and fees involved

Condominiums, whether it is Executive Condominiums (ECs) or private condominiums, are generally more expensive than HDB flats, so you’ve got to assess your budget and financial readiness for the increased cost, which includes the purchase price, stamp duties, maintenance fees, and potential renovation costs.

You’ll need to do up a financial roadmap and assess your ability to secure a housing loan and any changes in your financial situation that might affect your capability to afford a condominium. Moreover, you’ll need to take into account the monthly maintenance fees to cover the upkeep of common areas and facilities. 

Size and space

Condominium units tend to be smaller than HDB flats, so consider whether the available space in a condo meets your requirements. Remember to evaluate the layout and design of the condo unit to ensure it suits your living needs and preferences.

Resale Potential and Market Conditions

Research the resale potential of the condominium, as market conditions can impact your ability to sell the property in the future, and consider consulting with real estate professionals or studying market trends to make informed decisions.

Legal and Regulatory Aspects

Condos might have restrictions on renovations or require approval from the management for changes to the unit, so make sure to understand the condo's rules and regulations regarding customization and renovations, the legal and regulatory aspects of purchasing a condominium, including the terms of the lease, ownership structure, and any restrictions on foreign ownership if applicable.

Future plans and research

Consider your long-term plans, such as family expansion, potential job changes, or retirement and ensure that the chosen condominium can accommodate your evolving needs. If you need more help, you can reach out to real estate professionals such as MoneySmart’s team of mortgage specialists who can offer suitable advice to you and make helpful recommendations while providing insights.

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Upgrading To A New Condo vs. Resale Condo

New CondoResale Condo
Purchase price
  • May be higher than resale condos, depending on the location
  • Early launch discounts are often available in the form of stamp duty reimbursements (i.e. Additional Buyer's Stamp Duty, also known as ABSD in short, subject to terms and conditions by the Singapore government such as marital status, purchasing the condo as a married couple, first property or second or subsequent property purchase, etc.)
May be above or below property value, depending on sellers’ urgency to sell off their property, number of interested buyers, location, etc.
Valuation of propertyThe developer’s asking price for the new condominium is taken as the valuation (this only applies if you’re taking a bank loan).
  • The valuation will be conducted by third-party professional valuers for private condominiums (this only applies if you’re taking a bank loan).
  • If the selling price of the condo that you’re purchasing is above the valuation, you’ll need to fork out the difference in cash, which is cash over valuation (COV), in order to purchase that condo or forfeit your option fee.
Temporary Occupation Permit (TOP) / Renovations limitations and regulations May face delays in Temporary Occupation Permit (TOP)Fixing any defects will add on to your renovation costs and affect potential resale and rental value. You may also ask the seller if there are any persistent issues with the unit e.g. water leakage / clogged drains, challenging location of aircon ledges, etc. If you need help with evaluation guidelines, you may refer to the Building and Construction Authority of Singapore’s website for their checklists on condominium ownership.
Facilities and featuresUp-to-date furnishings, architectural features and facilitiesThe condo’s “communal facilities” like the swimming pool, BBQ pits, gym or fitness areas, etc., may need upgrading and the range of facilities may most likely be fewer than a completely new condo.

Pros & Cons Of Buying First, Selling Later

Valuation LimitUp to 100% of Valuation Limit (lower market value/purchase price of condominium)Decrease in CPF Savings
Minimum Downpayment-55%
Maximum Loan-to-Value ratio (if taking a bank loan) 45%-
Monthly loan repaymentThe minimum loan amount per month could be lower than if you were to sell your HDB flat first then buy the condo as you may have outstanding mortgages-
Additional Buyer's Stamp Duty (ABSD)-Required to pay about 5% to 35% of the entire value of the condo purchased, the percentage will vary as per your citizenship type (SC or PR) and whether it is your 1st, 2nd, 3rd or subsequent property purchase in Singapore
Home Protection Scheme (HPS)Still covered -

Pros & Cons Of Selling First, Buying Later

Valuation Limit-
  • Up to 120% of Valuation Limit (lower market value/purchase price of condominium), which is higher
  • Decrease in CPF Savings
Minimum Downpayment25%-
Maximum Loan-to-Value ratio (if taking a bank loan) -75%
Monthly loan repayment-The minimum loan amount per month could be higher than if you were to buy the condo first, then sell your HDB flat as you may not have lower or no outstanding mortgages
Additional Buyer's Stamp Duty (ABSD)-May not succeed in your ABSD remission
Home Protection Scheme (HPS)May be able to get a “refund” for the ABSD fee that you’ve paid, provided that your HDB (which is your first property) is sold within 6 months from the date of purchase of your second property which is the condo in this case (if it is a completed property) or TOP (whichever is earlier) of the condo (if it is an uncompleted property). No longer valid as once you’ve sold your HDB to upgrade to a private condo, you will no longer be covered under HPS

Steps To Take When Upgrading To Condo

Step 1

Buy condo first before selling your HDB / Sell HDB first before buying condo

Before you make a decision, you’ve got to consider several factors such as the valuation limit, minimum downpayment, maximum Loan-to-Value (LTV) ratio (if taking a bank loan), monthly loan repayments, Additional Buyer's Stamp Duty (ABSD) and Home Protection Scheme (HPS). Compare the pros and cons of each option and see which one suits your financial capability and situation better.

Step 2

Option To Purchase (OTP)

Once you’ve negotiated the price and terms of the purchase with the seller of the condo unit that you’re keen on purchasing, you'll sign a Letter of Intent (LOI) or Option to Purchase (OTP) with the seller.

Thereafter, you’ll have around 14 days to pay the Option To Purchase (OTP) fee (usually about 1% of the purchase price) to your seller, for your condo unit before your IPA (in-principle approval) expires. The IPA only applies if you’re taking a home loan from a bank to help pay off the cost of purchasing your condo.

Step 3

Buyer's Stamp Duty (BSD) and Additional Buyer's Stamp Duty (ABSD)

Pay the necessary stamp duties, including Buyer's Stamp Duty (BSD) and Additional Buyer's Stamp Duty (ABSD) if applicable. These fees are calculated based on the purchase price and your residency status. 

If it is your second property purchase, which most likely is as you’re upgrading from HDB to a condo, your BSD range from 1% to 6%, and ABSD will be 20% to 60% as per the Ministry of Finance latest update in February 2023, thus for ABSD, you will be charged 20% for the second property purchase and 30% for the third & subsequent property purchase. If you need help on the calculation of these stamp duties, you may tap on our Stamp Duty Calculator.

Step 4

Purchase completion

On the completion date specified in the OTP, you'll be required to pay the remaining balance of the purchase price of the condo, before the seller hands over the property and the keys to you.

The property's ownership, which is the ownership of the condo, will be transferred to your name at the Land Titles Registry, which you and the seller have to remember to make an appointment for, after engaging a lawyer or a conveyancing firm to handle the legal aspects of the transfer.

Step 5

Renovation before moving in

Depending on whether you’re purchasing a brand new condo or a resale condo unit, the extent of renovation required will differ, and so will the cost of the renovation.

Frequently Asked Questions

Will I be able to use my CPF savings to buy a condo?

Yes, you are only able to use your CPF Ordinary Account (OA) for partial payments of your condo, i.e. downpayment of your EC or any other private condo, depending on your loan to value ratio (LTV).

Are singles eligible to purchase a condo?

Yes, but they must meet the necessary income ceiling requirements. As for private condos, there are no income ceiling requirements to fulfil.

At which age can singles buy a condo in Singapore?

Singles need to be at least 35 years old to purchase a HDB flat. As for EC, singles need to be at least 21 years old and at least 35 years old if applying under the Joint Singles Scheme.

What is the Buyer's stamp duties (BSD) fee?

Note that if it is your second property purchase, your BSD will be 20% instead of 3%-4% as per the Ministry of Finance latest update, thus you will be charged 20% for the second property purchase and 30% for the third & subsequent property purchase.

Where can I find the best EC or private property home loans?

If you’re looking to compare popular home loans all in one place, online mortgage brokers’ platforms like MoneySmart’s Home Loans page is a great place to start finding the best home loan rates, whether it is for an EC or private condo.

Are foreigners able to buy condos in Singapore?

Yes, foreigners are able to buy private condos in Singapore and do not require approval under the Residential Property Act to buy private condominium units, strata landed houses in approved condominium developments, or a leasehold estate in a landed residential property for a term not exceeding 7 years.