What hidden prices are there when promoting your own home?
Your loved ones is itching to maneuver to a brand new residence.
You may have made up your thoughts — you’ll promote your present residence in alternate for a much bigger and fancier residence. However there is only one drawback: You’re uncertain of the bills to be paid earlier than promoting your own home.
Listed here are the issues you’ll want to pay earlier than promoting off your house:
- Excellent residence mortgage
- Authorized charges (often known as conveyancing charges)
- Property agent fee
- CPF financial savings plus accrued curiosity (to be paid again into your individual account)
- Vendor’s Stamp Responsibility (if relevant)
- Property tax
- Upkeep charge
For those who’re promoting your HDB flat, you may additionally should pay for the next:
- Resale utility admin charge
- Resale levy
- HDB upgrading prices
Charges and prices to pay earlier than promoting your own home
1. Excellent residence mortgage
If your house mortgage isn’t totally paid off but, you’ll must repay the excellent quantity to HDB or the financial institution earlier than you’ll be able to promote your own home.
On prime of that, in case you’re promoting your own home through the lock-in interval of the house mortgage, the financial institution will cost you an early redemption charge.
2. Authorized charges
Authorized charges are often known as conveyancing charges. That is for the method of transferring the property title from you to your purchaser.
For HDB flat
After HDB has obtained the resale utility from each the customer and vendor, you may be requested to endorse the resale paperwork by way of the HDB Resale Portal. That is when you’ll want to pay the authorized charges.
You may have the choice to have interaction HDB’s solicitor to behave for you, or rent a non-public lawyer to deal with the required paperwork. The price will depend upon this.
If you wish to get a fast estimate of the authorized charges, you should use HDB’s Authorized Charges Enquiry Facility.
For those who’re hiring a non-public lawyer, the conveyancing charge for the discharge of the housing mortgage would be the identical if it’s an HDB mortgage. However for the remainder, it can depend upon the lawyer.
Thus, it would be best to first talk about their charges earlier than appointing one to behave in your behalf.
There are three most important accepted fee strategies, specifically bank card, AXS and PayNow. You may also use your CPF financial savings to pay for the authorized charges portion (i.e. excluding Title Search Payment, Registration charge and Miscellaneous charges).
For personal property
The conveyancing charge is about $2,500 to $3,000. Relying on the regulation agency, you could possibly pay it with CPF.
3. Property agent fee
For those who’re utilizing a property agent to promote your own home, you’ll should pay the agent fee too.
Whereas there’s no mounted price as to how a lot you’ll want to pay your agent, these charges (as a share of the promoting value) are a typical apply:
- HDB flat: 2 per cent
- Condominium: 2 per cent – 4 per cent
- Landed: 2 per cent (or extra)
If the company is GST-registered, you’ll additionally should pay GST on the fee.
There’s no onerous and quick rule on the fee charges; it’s negotiable. Earlier than appointing a property agent that will help you promote the home, remember to talk about with them on the fee price.
You possibly can learn extra in regards to the property agent fee charges right here.
4. CPF financial savings plus accrued curiosity
While you promote your own home, you’ll must refund to your CPF account the CPF financial savings you’ve used to pay for the home.
For example, you’ve used your CPF financial savings to pay for the downpayment and month-to-month instalments, so that you’ll should refund the quantity again (in money) to your CPF account.
For HDB flats, in case you’ve taken CPF grants earlier than, you’ll must refund the quantity again to your individual CPF account as nicely.
On prime of all these, you’ll should refund the two.5 per cent accrued curiosity that you’d have earned in case your CPF financial savings weren’t withdrawn to pay for the home.
Learn this text to search out out extra on how this impacts your property sale proceeds.
If it’s any comfort, the excellent news is that the refunded quantity (principal + accrued curiosity) can be utilized to pay in your subsequent home. So relying on the way you have a look at it, this will likely or is probably not a value.
5. Vendor’s Stamp Responsibility (SSD)
The Vendor’s Stamp Responsibility (SSD) is payable in case you promote or switch your property inside three years. So for many HDB house owners, they don’t should pay this as a result of five-year MOP.
(Though you could possibly take pleasure in a remission if the property is transferred because of a divorce or if it’s an HDB flat to be transferred throughout the household. Head over to IRAS’ web page on SSD for extra data on this.)
Right here’s the speed for properties purchased from 11 March 2017 onwards. The SSD payable is rounded to the closest greenback.
|Interval of possession||SSD price based mostly on buy value/ market worth (whichever is increased)|
|As much as 1 12 months||12 per cent|
|Over 1 12 months, as much as 2 years||8 per cent|
|Over 2 years, as much as 3 years||4 per cent|
|Over 3 years||No SSD payable|
There are a number of methods of paying the Vendor’s Stamp Responsibility. This consists of:
- Web Banking
- Cheque/Cashier’s Order
6. Property tax
The annual property tax is often paid in January for the entire 12 months. So in case you promote your flat in June, this implies you’ve paid the customer’s portion of the property tax upfront as nicely.
However this isn’t precisely a value, as you may get the customer to reimburse you.
Earlier than the home is transferred to the customer, the lawyer or HDB officer (for HDB flats) will assist apportion the present 12 months tax between you and the customer.
So for HDB flat, you’ll must submit the tax fee receipt through the flat sale completion appointment.
The property tax is calculated by multiplying your flat’s Annual Worth (AV) with the relevant tax price. The AV is your flat’s estimated gross lease for one 12 months if it has been leased out. IRAS determines it based mostly on prevailing market charges.
Listed here are the median AVs for HDB flats and personal residential properties for 2021. (As of this replace, the figures for 2022 haven’t been printed but.)
|Property class||Property sort||Median annual worth ($) for 2021|
|HDB||1- or 2-room||5,340|
|Government and others||11,340|
|Personal||Non-landed (together with Government Condominiums)||23,400|
For owner-occupied properties
Proprietor-occupied properties take pleasure in a decrease tax price.
As of Jan 1, owner-occupied properties with an AV between $8,000 and $30,000 are topic to a tax price of 4 per cent.
For these with an AV of greater than $30,000, the tax price on the surplus is 5 per cent to 23 per cent. From Jan 1, 2024 onwards, the tax price on the surplus might be elevated to 6per cent to 32 per cent.
For non-owner-occupied properties
In the meantime, the tax charges for non-owner-occupier residential properties are increased.
As of Jan 1, the tax price ranges from 11 per cent to 27 per cent, earlier than rising to 12 per cent to 36 per cent from Jan 1, 2024.
You should utilize the IRAS Interactive Property Tax Calculators to search out out the property tax you’ll want to pay.
The popular methodology of fee for property tax is GIRO. Different acceptable fee modes embody:
- Web banking
7. Upkeep charge
For HDB flats, that is the Service and Conservancy Expenses (S&CC), which you’ll should pay as much as the day of the resale completion. Be sure you settle this earlier than the resale completion appointment.
As for condos, the month-to-month upkeep charge is often paid each quarter. So it’s possible you’ll must get reimbursement from the customer for it.
Promoting your HDB flat? Listed here are the charges it’s possible you’ll must pay
On prime of the above-mentioned charges, you might have to incur issues just like the resale levy whenever you promote your HDB flat.
1. Resale utility administrative charge
Each the vendor and purchaser are required to fork out the executive charge once they submit their respective portion of the resale utility by the HDB Resale Portal.
|Flat sort||Resale utility charge (inclusive of GST)|
|1-room or 2-room flat||$40|
|3-room or bigger flat||$80|
There are three accepted fee strategies for the executive charge. Through the HDB Resale Portal, you’ll be able to pay with both
- Bank card (Mastercard or Visa)
When you have engaged a licensed property agent, they can assist you submit the appliance utilizing their Property Agent Toolkit.
2. Resale levy
You’ll must pay the resale levy in case you’re shopping for a second subsidised flat. Listed here are a couple of situations during which it’s a must to pay it:
|First HDB flat||Second HDB flat||Have to pay resale levy?|
|BTO/ SBF/ open reserving (i.e. shopping for instantly from HDB)||BTO/ SBF/ open reserving||Sure|
|BTO/ SBF/ open reserving||New launch EC||Sure|
|Resale flat with grants||BTO/ SBF/ open reserving||Sure|
|New launch EC||BTO/ SBF/ open reserving||Sure|
While you’ll must pay for it will depend on whenever you unload your first subsidised flat. For example, in case you promote your first subsidised flat earlier than getting the keys to your second subsidised flat, you’ll should pay your resale levy in money upon getting the keys to your second flat.
However, in case you full the acquisition of your second subsidised flat (i.e. key assortment) earlier than promoting your first subsidised flat, your resale levy might be deducted from the sale proceeds, with any shortfall to be paid in money.
Be taught extra in regards to the resale levy right here.
3. HDB upgrading prices
In case your flat has undergone any of those upgrading programmes, you’ll must pay the upgrading prices:
Earlier than the resale transaction might be accomplished, you’ll should pay the excellent upgrading value in full.
This may be deducted from the money proceeds of promoting the flat, after deducting the excellent mortgage, HDB expenses and CPF refund. In any other case, you’ll should pay it in money.
In any other case, if the bill is issued after the resale completion is accomplished, the customer must pay for it.
Head over to HDB’s web site for extra data on this.
ALSO READ: 5 the explanation why your own home shouldn’t be promoting, and learn how to overcome them
This text was first printed in 99.co.