Property investment is a great way to build your wealth. The main goal of any investment is to achieve a healthy return on your investment over time. While property investment can represent a good way to grow wealth, there is still risk involved. There are many costs associated with property investment, including upfront costs when buying the property and the ongoing costs of owning the property.

Property Buying Costs

1. Option Fee

You pay the option fee to reserve the property of your choice. An Option to Purchase agreement is a legal contract signed between a buyer and a seller of a residential property. Basically, it gives the buyer the exclusive rights to purchase the property from the seller. This fee is all payable in cash. If you choose not to exercise the option, you must be prepared to forfeit the option fee paid.

Type of FlatBTO 2-RoomBTO 3-RoomBTO 4-Room, 5-Room or ExecutiveResale Flat & ECNew EC or Private Property
$500$1,000$2,0005% of flat’s cost
(capped at $5,000)

2. Deposit (Down Payment)

The down payment will be depending on the type of property, i.e., HDB/Private, and the type of loan you will get. For BTOs or HDB resale downpayment, you have the option of taking up either a HDB loan or bank loan. For executive condominium (EC) or private property, you will not be able to get HDB loan, so you will have to apply for a bank loan.

For HDB Loan, you will need to make a downpayment of 10% of the purchase price or valuation, whichever is higher. The down payment can be paid from your CPF Ordinary Account (CPF-OA), in cash, or a combination of both. 

If you qualify for HDB’s Staggered Downpayment Scheme, this downpayment can be split into two instalments: 5% to be paid during the signing of the agreement and another 5% when collecting your keys.

For a private bank loan, you will need to make a down payment of 25% of the purchase price or valuation, whichever is higher. Buyer of a private property need to prepare to pay an absolute minimum of 5% in cash, and the remaining 20% can be paid from your CPF-OA, in cash, or a combination of both. 

Type of FlatDownpayment Amount (%)Payment Method
BTO/Resale10% of purchase price or valuation, whichever is higher
(inclusive of booking fee and balance)
CPF OA and/or cash
EC/Private25% of purchase price or valuation, whichever is higher
(Loan To Value of 75%)
5% downpayment (Cash)
20% CPF OA and/or cash
(LTV 75%)

3. Mortgage Repayments & Interest

The loan tenure is capped at 25 years for HDB flats, and you can borrow up to 90% of Loan-To-Value (LTV). The mortgage interest rate is always 0.1% above the prevailing CPF-OA. This means the interest rate is 2.6% per annum. 

Mortgage LoanPrivate PropertyHDB
Maximum Loan Tenure25 years30 years
Maximum Loan75%90%
Interest RateFloating or Fixed2.6%


4. Agent fees

When you are looking to sell, buy, or rent, you engage an agent for their service to act in your best interest, and in return, you will need to pay a fee for their professional service. 

There are no universal, industry-standard commission rates imposed in Singapore, but there are industry best practices. In general, for private, buyers pay nothing, and sellers usually pay 2% of the property sale price, split between the buyer’s agent. For HDB, the seller will pay 2%, and the buyer will pay 1%. 

For rental, the commission is usually about 1 month for a 2-years tenancy if the monthly is above $3500, and the landlord pays this. The tenant will have to pay in the event if the monthly rental is less than $3500 ranging from ½ for a 1-year lease to 1 month for a 2-year lease. There is no fixed rule but just common practices. 

5. Solicitor and Conveyancing Fees

There will be legal fees involved to cover the legal transfer of the property. Such solicitor or conveyancing fees can range between $1,800 to $3,000. The law firm you will need to engage is supposed to check the Option-to-Purchase details, help you get your CPF monies to pay for the property, and provide you with the breakdown of various costs, from stamp duties to the initial down-payment, etc. 


6. Stamp Duty

One of the many additional costs associated with buying property is stamp duty. Stamp duty refers to the tax on documents relating to the purchase or lease, payable to the Inland Revenue Authority of Singapore (IRAS). Stamp Duty is payable on the actual price or market price, whichever is higher.  

There are three types of duties payable on the sale, purchase, acquisition, or disposal of properties in Singapore:

With effect from 20 Feb 2018, there are differentiated Buyer’s Stamp Duty (BSD) rates between residential and non-residential properties. The top marginal BSD rate for purchasing residential properties on or after 20 Feb 2018 is 4%.

Purchase Price/Market ValueBSD For Residential PropertiesBSD For Non-Residential Properties
First $180,0001%1%
Next $180,0002%2%
Next $640,0003%3%
BSD is rounded down to the nearest dollar, subject to a minimum duty of $1.

Additional Buyer’s Stamp Duty (ABSD) is to be paid on top of the existing buyer’s stamp duty (BSD), is applicable as follow:-

Buyer’s Citizen TypeRate of 1st Property Purchase2nd Property Purchase3rd and Subsequent Property Purchase
Singapore Citizen (SC)Not Applicable12%15%
Permanent Resident (PR)5%15%15%
HDB property is counted as a first property in the computation of ABSD.

The seller is responsible for paying Seller’s Stamp Duty (SSD) and is payable if the properties are sold within the holding period. In computing the SSD, one always has to consider two main factors: the period of the transaction and the holding period.

Holding PeriodSSD Rate Payable
Up to 1 year12%
More than 1 year and up to 2 years8%
More than 2 years and up to 3 years4%
More than 3 yearsNo SSD payable


Property Owning Costs

7. Renovation and Furnishing Costs

You may need to renovate depending on your property’s age and condition, how much work you want to do for rental or your own stay. The renovation can easily cost $50,000 or more, and furnishing like getting a sofa, dining table, study table, etc., can cost another $10,000 – $20,000. However, if your property is brand new, you may want to save some money on renovation.  

8. Maintenance Fees 

For HDB in general, it ranges from $20-$90 per month (you may find out the rates from your town council). However, if you are getting a private condominium or executive condominium, it typically costs $200-$400 per month, depending on your unit’s size and property development. 

9. Insurance

You will need to get fire insurance, and the basic fire insurance for HDB is not a high cost, up to $8.10 depending on the size of your flat for a five-year premium

It is best to get comprehensive home insurance to insure you against damage to furniture, renovations, and personal belongings. It also covers temporary accommodation and storage costs (you will need both in the event of a fire) and third-party coverage (if the fire is your fault and your neighbour’s house burns down, they might be able to hold you liable for damages), repair and refurbishes the house after any disaster, etc. Typical home insurance policies cost between $30 to over $250 per annum. 

10. Property and Income Taxes

Owning your own property subject to property tax, and property taxes are determined by your property’s Annual Value (AV). The AV is the annual amount that you would get from renting out your property. You can use this online calculator to determine your property tax rate.

If you are renting out your property, not only will you be subject to property tax, you will also need to pay income tax. This means that any profit or the net amount left after deducted any allowable expenses from your rental income will be taxable up to 20% of your rental income.


Now you have an idea of the costs associated with property investment, including upfront costs when buying the property and the ongoing costs of owning the property, you now check on your affordability of owning a property.

All figures are to be based on 2 persons if you are purchasing a property with your partner. For the age, key in the oldest age.

*This simple affordability calculator is for new buyer(s) without any existing property/home loan

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