7 Lesser-Known Things You Should Be Aware Of Before Purchasing A BTO Flat

Deborah Gan

Deborah Gan

Last updated 14 July, 2022
 

Think you know everything there is to know about applying for BTO flats? Well.. maybe not quite. If you’re thinking of applying at the next launch, here are some uncommon things about BTO flats you should be aware of.

If you’re a Singaporean couple in a stable relationship and have a combined household income of no more than S$14,000, chances are you’ve probably applied for a Build-To-Order (BTO) flat at least once.

Due to the competitive nature of buying BTO flats, especially in mature estates, just landing a decent queue number requires a whole lot of lady luck shining on you.

Even if it's your nth time applying for a flat, how many of these points are you actually aware of? Here are some lesser-known things that you should consider before applying for a BTO flat.

If it’s your first time, here are some useful guides and tips to help you have a seamless application journey:

Step-By-Step Guide To Buying Your First HDB BTO
8 Hacks To Improve Your HDB BTO Ballot Chances
How Much Do You Need To Buy Your First Home In Singapore?
HDB Loan Vs Bank Loan: Which One Should You Go For?

#1 Housing grant that has to be paid back with accrued interest goes into your CPF account

When you purchase a new BTO flat, there are some HDB grants available depending on your situation. For example, if you earn a household income of S$9,000 or less, you’ll be eligible for the Enhanced CPF Housing Grant (EHG) up to S$80,000 in grants.

While it is common knowledge that selling your BTO flat after its Minimum Occupation Period (MOP) will require you to pay back the HDB grant amount with accrued interest of 2.5%, many often think that it goes back to the government’s wallet. 

Contrary to popular belief, the funds actually go back to your own CPF account, meaning that the money is yours to keep. This is to ensure that the grant money that you used that was credited to your CPF OA does not lose out the base interest of 2.5% p.a. if you had chosen to leave it in your OA.

#2 Resale levy is imposed when you sell your BTO and buy another BTO or EC

Most would know that in any Singaporean’s lifetime, we are entitled to purchasing only two subsidised flats aka BTO flats. However, did you know that there’s a resale levy if you choose to buy the second one?

Previously, HDB implemented the levy based on a percentage of your house, but they have since changed it to a fixed amount that you have to pay. You will only need to pay the levy when you purchase your second subsidised property and there will be no interest accrued.

Housing type Resale levy amount
2-room flat S$15,000
3-room flat S$30,000
4-room flat S$40,000
5-room flat S$45,000
Executive flat (EA/EM) S$50,000
Executive condo (EC) S$55,000

Though the resale levy may seem quite pricey, the lower purchasing price for subsidised flats and the subsidies you can get from HDB might be able to justify the levy. Besides, subsidised flats are also known to have the greatest appreciation potential, which means that you might be able to profit an amount more than the resale levy that you have to pay, making the purchase worthwhile.

Looking for a home? Shop around for the best home loan rates in the market.

#3 HDB restrictions 

While this point is not exclusive to BTO flats, there are actually some HDB restrictions that many homeowners are not aware of, of which some may seem relatively ridiculous to say the least.

The first one is that you cannot have a giant fish tank in your house, and fish fanatics will not be thrilled. The tidal allowed weight of a fish tank should be no more than 150kg per room, including all the accessories in the fish tank. However, if you really do wish to install one that doesn’t meet the standards, you can make a formal application up to their approval.

Secondly, not many are aware but HDB limits the number of tutees in your flat at each time to no more than three students, in case you’re planning on giving private tuition. Their rationale is that flats are not supposed to be used to carry out businesses on large scales as it might disrupt the industry in Singapore, and even your neighbours.

Furthermore, wet laundry hung outside your flat is also actually not allowed, though we have all seen our fair share of it, and may even be guilty of doing this. Apparently, you are not supposed to hang any dripping laundry out of your flat even on bamboo poles as this might affect your neighbours staying below you. However, this clearly poses a challenge especially if you’re washing large items that cannot be dried properly in your dryer.

So in case you haven’t heard of such rules yet, here’s a heads-up if you’re buying a BTO unit soon.

Purchasing a house soon? Get ahead of your finances with the Citi Plus Account, a wealth management account that goes beyond a regular savings account.

#4 Married Child Priority Scheme (MPCS) vs Proximity Housing Grant (PHG)

In the case of BTO flats, living within 4km of your parents’ home does provide you with an additional advantage over your competitors. You will be given priority under the Married Child Priority Scheme (MCPS) and your name will be balloted first among the other applicants who have applied under other priority schemes as well.

Failure to be chosen then gives you an additional chance of being balloted again with the remaining applicants.

However, this should not be confused with the Proximity Housing Grant (PHG) of up to S$30,000 offered to homebuyers who are purchasing a resale flat. The same criteria apply — you have to live within 4km of your parents’ home or stay with your parents in the same household (only for resale). .

Since both are relatively similar, it’s easy to confuse the two and expect a monetary subsidy when they apply for a BTO flat under this scheme.

Related to this topic:
Complete Guide To HDB Grants: How Much Can You Get?
What HDB Flats Can Singles Buy?
3 Ways to Finance HDB BTO Flats

#5 You can waive non-selection count if limited flats are available

As a first-time applicant for subsidised flats, you are given two chances to be in the queue for balloting for a unit. If successful, and HDB gives you a selection date to head down to HDB and choose a flat, failure to show up or not choose a unit will result in one count of non-selection. You will then be considered a second-timer applicant and the chances of getting balloted will be even lower.

However, HDB isn’t that cruel. In the event that on your selection date there are very limited units left or when most units are all located on the first few floors, you can always appeal to HDB to waive your non-selection count. But of course, this is entirely up to HDB’s discretion to waive it for you, and it is not guaranteed.

If you want to make an appeal to HDB, you can submit a request at MyRequest@HDB to do so, which requires you to key in your sales registration number.

Purchasing a home soon? Don’t forget to safeguard your home with the best home insurance plans in Singapore.

#6 Apply for a flat in a non-mature estate (hint: higher success rate than you think)

You’ve probably heard of couples saying that they’re still unsuccessful after their 5th try or even 10th try. But if you don’t want to be in that situation and are not that picky about the location, you should apply for a flat in a non-mature estate to give you a higher chance of getting a queue number.

 Based on HDB records, “virtually all first-timer applicants of BTO flats in non-mature estates had a chance to book a flat within their first three tries”, which means that the odds are even higher than you’d think.

Furthermore, not everyone knows this but first-timers who have been unsuccessful in two or more applications for BTO flats in non-mature estates will be given an additional ballot chance for their next application in a non-mature estate.

#7 Refer to the median application rates before applying for a flat 

To increase your chances of getting a successful queue number, you can check HDB’s website for the median application rates for BTO projects, which will give you a sense of how popular that project is. They have started publishing this since the May 2022 BTO exercise.

Flat categories with lower application rates will give you an indication of your chances of securing a flat. Head over to HDB’s website and look under the “flat supply and applications received” tab.

A mahjong addict with an undying love for dogs, Deborah is always on the hunt for cheap deals because she is always broke. That is why she is attempting to be more financially savvy to be.. less broke