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Resale Levy 101: HDB, EC and Private Properties - 2021 Guide

Source: Freepik

HDB flats were introduced in the early 1960s as affordable public housing and to improve the quality of the living environment for Singaporeans. As these flats are heavily subsidised by the government, there is a need to ensure that no one is profiteering from the buying and selling of such flats. Therefore, the resale levy was introduced by the HDB to ensure that housing subsidies are allocated fairly for first-time and second-time homebuyers.

The implementation of the resale levy has the effect of reducing subsidies for the purchase of a second flat direct from HDB or a new launch EC.

Home owners will need to pay the HDB Resale Levy in the following scenarios:

  1. When you sell a subsidised flat, and then proceeding to buy a second subsidised flat direct from HDB;

  2. When you sell off a subsidised flat, and then proceeding to buy an EC at the developer launch where the land sale occurred on or after 9 December 2013.

For those who are wondering if their flats are subsidised, as per the HDB definition, subsidised flats are:

  • A Build to Order (BTO) flat from HDB;

  • Sale of Balance flat from HDB;

  • EC from a developer launch;

  • Design, Build and Sell Scheme (DBSS) Flat from a developer; or

  • Resale flat purchase with CPF Housing Grants.

So if your current home falls into any of the above categories, you will have to pay a resale levy when selling your home.

Types of Housing Grants

For many of us, buying a new flat or EC is a long-term financial commitment. Unless you have been in the workforce for a long period, you are unlikely to have sufficient cash and CPF monies to finance the purchase. As such, HDB have the below schemes and grants to help with your cash flow, or reduce your cash outlay.

  • First-timer Applicant Grant;

  • Proximity Housing Grant;

  • Single Singapore Citizens Applicants Grant;

  • Half Housing Grant or Top-Up Grant;

  • Non-Citizen Spouse Scheme Grant;

  • Joint Singles Scheme or Orphans Scheme Grant

So if you have received any of the above grants when you purchased your first HDB flat, you will be liable to pay the HDB Resale Levy.

Example 1 - If you have purchased a HDB resale flat from the open market, but applied successfully for any of the CPF Housing Grant, it will also be considered as subsidised, and you will be liable for the resale levy.

Example 2 - If you are a single home applicant (must be over 35 years old) and a recipient of the Singles Grant, you will need to pay half the resale levy, if and when you subsequently form a family and buy a second subsidised flat.

A homeowner is not required to pay the resale levy in the following scenarios:

  • If you bought a DBSS flat from a developer;

  • Your EC is bought from a developer launch, where the land sale occurred before 9th December 2013;

  • If you have bought a HDB resale flat from the open market;

  • Your home is a private residential property.

If you are still unsure as to whether you need to pay the resale levy, you can check the information using the HDB Resale Portal.

How Much Is The Resale Levy

In the below chart, you can see the resale levy payable for each property type.

Waiver of Interest For Elderly

For home owners above the age of 55 years old, and have sold your first subsidised flat before 3 March 2006 and right-sized to a new 3-room or smaller flat from the November 2015 sales launch onwards, you will only need to pay the percentage graded resale levy, with the interest waived.

The resale levy payable is subject to a minimum amount of $15,000 for 2-room, $30,000 for 3-room, $40,000 for 4-room, $45,000 for 5-room, and $50,000 for Executive flat. These are the same resale levy amounts payable by second-timers who sold their first subsidised flat on or after 3 March 2006.

Payment of Levy

The resale levy payable is determined at the point you book your second subsidised flat. It applies regardless of ownership type (joint-tenancy or tenancy-in-common) or shared interest in the flat. Payment can only be made by way of your flat sale proceeds and/or cash.

If you sell your first flat before buying a second flat, you will need to pay the resale levy in cash before you’re allowed to take possession of your second flat.

However, if you sell your first subsidised flat only after you received the keys to your second flat, then, you can use proceeds from the sale to pay for the resale levy. However, if the proceeds are insufficient to pay for the resale levy, you will have to be pay in cash.

Please take note that you are not allowed to use the HDB mortgage financing for the payment of the resale levy.

Refund To CPF Account

According to CPF regulations, any monies withdrawn from your CPF account for housing financing will have to be return when the flat is sold. The amount to be put back is the principal amount withdrawn plus any accrued interest. The accrued interest is the amount of interest that the money withdrawn would have earned if it remained in the CPF Ordinary Account (OA). Note that this accrued interest continues to compound even after your flat has been paid off fully. This means the longer you stay in your HDB flat, the higher the interest you’ll have to return to your CPF account.

So if you are thinking of upgrading or right sizing your current HDB flat, just be aware of the resale levy you may have to pay.


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