Over the past week, some readers have texted me and asked me about the extra costs (hidden costs in their terms) to be paid when you purchase a HDB house. In today’s A Little Property Education, we will cover on The Costs Involved In Purchasing A Flat.

On top of the purchase price of the house, there are certain other costs involved. These are not exactly hidden costs, but should always be in your consideration when you purchase any property, be it HDB or a Private House.

This entry will be written in such a way that you have finally found your dream home and decided to purchase the property. We will be moving along a timeline in which the events are happening in order.

For simplicity sake, your dream home is a Resale 4 room-flat priced at $400,000.
This is going to be your first home and you will be taking HDB Loan, and will not be taking any Housing Grants.
(All values are approximate and may vary. Costs mentioned here are applicable for this particular case study only. It does not apply for any other property transaction)

Let’s Go!



After viewing some properties on the market, you and your partner have finally found your dream home and decide to purchase a certain property.

You will be required to pay the sellers an amount of $1 to a maximum of $1000 in exchange for the Option to Purchase (OTP), and you be will entitled to an Option Period before exercising the Option.
(Option Period: a maximum of 21 calendar days, including Saturdays and Sundays and it expires at 4pm of the 21st calendar day)

Option Fee: $1000 (assume you paid the maximum amount)


Screen Shot 2015-05-18 at 11.10.00 pm

After the sellers have granted you the Option To Purchase (OTP),  you are required to submit a Valuation Request by the next working day. All valuation reports must be submitted online.

You can submit the request via  e-Resale (Online Submission of Resale Application and Valuation Request) only after the sellers have granted you an Option to Purchase. The request MUST be submitted by the next working day.

Valuation Costs: $199.25 (Your dream home is a 4 room flat, remember?)
TOTAL “OTHER” COSTS INVOLVED= $1000+$199.25= $1199.25

Assume that the Valuation Report comes out at $380,000 after a few days.

3. Exercise Fee

Upon careful consideration, also knowing that you need to pay Cash Over Valuation (COV), you and your partner still decide to exercise the Option before the Option Expiry.
Remember that you must already have submitted your Buyer’s Resale Checklist at this Point!

After exercising the Option, you are required to pay a deposit to the sellers. This deposit (exercise fee), including the Option Fee, cannot exceed $5000.

Exercise Fee: $4000
TOTAL “OTHER” COSTS INVOLVED= $1199.25+$4000= $5199.25

4. Admin Fees

Screen Shot 2015-05-19 at 12.06.43 am

After you have exercised the Option, you will move on to book your First Appointment.
This is an Admin Fee to be paid to HDB. You will submit this booking online.

Admin Fee: $80 (4 room)
TOTAL “OTHER” COSTS INVOLVED= $5199.25+$80= $5279.25

5. Admin Fees For Extension Of Stay

The seller of your dream home mentioned that they need about 1 month of extension stay as they are still in the midst of finding their new dream home.

Being kind hearted people, you have agreed to allow the sellers the extension.

HDB will then charge you an administrative fee of $20.
This fee, however, is usually paid by the seller, as they are the party who needs the extension.

TOTAL “OTHER” COSTS INVOLVED= $5199.25+$80= $5279.25

6. Conveyancing Fees


After your First Appointment with the HDB Officer, you are required to get your conveyancing done. You have taken a HDB Loan, and decided to engage HDB to do your conveyancing for you.

Conveyancing Fees: Approx $500
TOTAL “OTHER” COSTS INVOLVED= $5279.25+$500= $5779.25

Note: You are able to get your conveyancing completed by HDB/lawyer if you are using a HDB Loan.
If you are using Bank Loan, you have to seek a lawyer for conveyancing purposes.
A lawyer would charge from a range of approximately $1800-$4000 for conveyancing depending on which law firm you engage.

To get a rough estimate of your conveyancing fee, assuming you are getting HDB to act for you, you can click HERE.

7. Cash Over Valuation

You will be required to pay $20,000 worth of cash over Valuation shortly. (within 10 days of your First Appointment)

This is because:
Your purchase Price : $400,000
Valuation Report: $380,000

Note: COV varies differently. It is possible that a property is bought without any COV, thus, there is no need to pay COV upfront.

COV: $20,000
TOTAL “OTHER” COSTS INVOLVED= $5779.25+$20,000 = $25779.25

8. Stamp Duty

Screen Shot 2015-05-18 at 10.39.37 pm

Stamp Duties are to be paid the government upon purchase of a property.
For the Different Stamp Duties to be paid, please click here.

For your scenario, as it is your first house, you are required to pay only the Buyer Stamp Duty.

Screen Shot 2015-05-19 at 12.45.39 am
Using this table as a guide, your Buyer Stamp Duty applicable works out to be: $6600

Buyer Stamp Duty: $6600
TOTAL “OTHER” COSTS INVOLVED= $25779.25+$6600 = $32379.25

Note: Buyer Stamp Duties for HDB can be paid by CPF. For better clarifications, contact IRAS for more details.

9. Insurance


As you are taking a loan from HDB, you must buy a Fire Insurance from the Insurance Agent Appointed by the HDB.
You must produce a valid Certificate of Insurance issued by the HDB’s appointed insurer on the date you complete the purchase of the resale flat.

The appointed insurer is Etiqa Insurance Pte Ltd (ETIQA). For more details on the HDB Fire Insurance, you may:

1. Call the ETIQA’s enquiry line on 6331 9253 or
2. Visit ETIQA’s website

TOTAL “OTHER” COSTS INVOLVED= $25779.25+$6600 = $32379.25

10. Agent’s Commission

Last but not least, as your friendly housing agent, I have been working tirelessly in assisting you to find your dream home, to assist you in the negotiation as well as to ensure that all documents and necessary paperwork are completed on time.

You have agreed to pay me 1% as commission.

Note: Commission varies and it is agreed by the agent and the buyers.

Commission: $4000
TOTAL “OTHER” COSTS INVOLVED= $32379.25+$4000 = $36379.25


Did the sum of money scare you?

In this small case study, we can see that the other costs can add up to quite a significant amount. To some, this amount actually mean a lot, and therefore, it is important to understand all these amounts before you commit into buying a property!
I hope that this case study gives you a better understanding and will help you make a more informed and better choice!

If you are still confused are still have other things that is bothering you, please feel free to contact me at 9277 4372.
Have a great week ahead!!!
Please comment, like and subscribe! 🙂

Best Regards,
Ken Seah

You may also be interested in:
Little Property Education!
1. Different Types Of Flooring
2. 5 Money Traps Couples Fall Into When Buying Their First Property
3. What To Bring For First Appointment?
4. Contra Facility
5. Financing Using Hdb Or Bank Loan
6. HDB Housing Grants


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s