Surprising fact: nearly one in five households that move up in Singapore face an unexpected charge that can shave thousands off sale proceeds. Imagine planning your next purchase and finding a sizable deduction at completion.
Understanding this charge early helps you price, time, and structure a sale for a better net outcome. The hdb resale levy applies when a household that once benefited from a subsidised flat buys another subsidised home or certain ECs. The amount hinges on whether the first hdb flat was sold before or on/after 3 March 2006.
This guide explains when the resale levy applies, how the amount is set, and what funds you can use. You will see the order of deductions, what ends up as net proceeds, and payment mechanics so you face no surprises at option or completion.
Key Takeaways
- Check if the hdb resale levy applies before you sign an option — timing affects the amount.
- The charge depends on your first subsidised flat sale date and household profile.
- You can use sales proceeds and cash, but not CPF Ordinary Account funds for this charge.
- Failure to settle may lead HDB to take legal action to recover the amount.
- Plan early to manage amount, cash needs, and the overall housing move-up or right-size strategy.
- Compare scenarios: BTO, SBF, EC from developer, and open-market resale to avoid surprises.
Understanding the HDB resale levy and why it exists
Imagine an invisible cost that adjusts public housing support when households move up the property ladder.
This charge targets households that once received government help and later buy another subsidised home. The hdb resale levy ensures first-time entrants keep priority access to limited housing assistance.
Who is affected? Anyone who bought a subsidised HDB unit (BTO or SBF), an EC from a developer, or used CPF housing grants, and later acquires another subsidised flat or new EC.
The logic is fairness. By asking second-time buyers to return part of earlier support, the policy spreads housing subsidies across more households. It is a rebalancing tool rather than a penalty.
Quick comparison
| Situation | Subsidy history | Likely outcome |
|---|---|---|
| First purchase (BTO) | Received BTO pricing or grants | Not applicable |
| Second subsidised purchase | Previously subsidised | May incur hdb resale levy |
| Open-market or private buy | No new subsidy used | No levy |
Do I need to pay resale levy for resale flat?
Imagine standing at a crossroad: one path leads to an open-market purchase, the other back into subsidised housing. That choice largely decides whether a surcharge applies.
Buying another subsidised HDB flat vs buying an HDB resale flat on the open market
If you sell your subsidised home and then buy an HDB unit on the open market, you usually avoid the resale levy. The market route means no extra charge tied to past subsidies. This gives flexibility when timing and location matter.
“Choose the market route when you want a cleaner financial exit from housing subsidies.”
When the levy is not applicable: private property, DBSS from developer, and open-market resale
No levy applies if you buy private property, a DBSS unit from a developer, or a market HDB purchase after selling your subsidised unit. Conversely, the charge becomes relevant when you buy another subsidised flat or a new EC from a developer.
- Market purchase = usually levy-free.
- Private property or DBSS = no charge tied to past subsidy.
- Another subsidised flat = levy applicable, plan cash flow early.
When the resale levy is applicable and common buyer scenarios
Imagine a policy pivot that changes when an extra public housing charge applies, depending on your next purchase.
Second subsidised purchases. If your household sold a subsidised HDB home and then books another subsidised unit with HDB, the charge applies. This covers households buying a second subsidised flat and reflects a second tranche of public support.
Executive Condominium purchases. Buyers who take a new EC from a developer may face the charge if the project’s land sale was launched on or after 9 December 2013. Earlier EC projects generally do not attract this rule.
Key date rules
- The 3 March 2006 date splits calculation methods: sales on or after that date use fixed sums by flat type.
- Sales before that date use a percentage-graded method and can incur interest at 5% per annum if deferred.
- Check the EC land-sale date—that single fact often decides liability for EC buyers.
“Confirm the relevant date early so you can set aside the correct amount and avoid surprises.”
How the HDB resale levy is calculated
Imagine checking two boxes: the sale date of your first subsidised unit and the flat type you once held. That split determines how the amount is set.
Fixed levy amounts (sale on/after 3 March 2006)
If your first subsidised home was sold on or after the date above, the charge is a fixed figure tied to that original flat type.
| Original flat type | Household amount (SGD) | Singles amount (half) | Executive Condominium |
|---|---|---|---|
| 2-room | $15,000 | $7,500 | — |
| 3-room | $30,000 | $15,000 | — |
| 4-room | $40,000 | $20,000 | — |
| 5-room / Executive | $45,000 / $50,000 | $22,500 / $25,000 | $55,000 for EC |
Percentage-graded levy (sale before 3 March 2006)
For earlier sales, the amount is a percentage of the higher of the resale price or 90% of market valuation.
- 2-room: 10% for same-size, 15% when upgrading (half for eligible singles).
- 3-room: 20% (half for singles).
- 4-room: 22.5% (half for singles).
- 5-room/Executive: 25% (half for singles).
Elderly right-sizers aged 55+ who sold before March 2006 and downsize to 3-room or smaller from Nov 2015 may have interest waived. Minimum fixed thresholds still apply.
“Start with the sale date and original flat type — they are the keys to the final amount.”
Executive Condominium nuances and levy applicability
Imagine planning an upgrade and finding that one date dictates whether an extra charge applies.
ECs with land sales launched on or after 9 December 2013
If an EC’s land sale launched on or after 9 December 2013, the resale levy rule will often apply. That classification makes ECs a hybrid property type with specific hdb resale requirements. Confirm the launch timeline using URA records and the developer’s brochure.
Upgraders and timing: booking while still living in a subsidised home
If you book an EC while still living in a subsidised flat, the levy is generally settled after you sell. The amount is deducted from sale proceeds at completion, so plan for bridging finance if sale timing compresses.
“Check the project launch date early. Small timing choices can change your cash flow and completion risks.”
- Verify EC launch date with URA and the developer.
- Model short-term finance needs: levy plus other closing costs often cluster at completion.
- Clear any outstanding charge before S&P issuance where required to avoid delays.
Tip: Treat ECs differently from open-market condominiums. Confirm rules early and price your move-up with the correct assumptions.
How payment works: sales proceeds, cash, CPF refunds, and interest
Imagine finishing a sale and opening a simple ledger that shows exactly where funds must flow. A clear list prevents surprises when stakeholders ask for their share.
What you may use for settlement
You must settle the charge from sales proceeds and cash. CPF Ordinary Account funds are not allowed for this payment. Plan any shortfalls well before completion.
If you defer payment
For cases with a pre-3 March 2006 sale, deferral attracts interest at a prevailing 5% per annum. Senior households right-sizing may have the interest waived if they meet age and timing rules.
“Sequence receipts so proceeds arrive when required; your solicitor can order disbursements and collect receipts.”
- Keep a ledger: sale price, outstanding loan, CPF refund, the charge, and closing costs.
- Confirm mortgage timing with your banker to avoid delays in settlement.
- Ask your conveyancer for written payment instructions and official receipts.
| Source | Permitted use | CPF allowed | Notes |
|---|---|---|---|
| Sales proceeds | Primary settlement | No | Covers the charge and closing costs first. |
| Cash | Top-up shortfall | Not applicable | Useful in soft markets where proceeds fall short. |
| CPF OA refund | Not for charge | — | Used for loan repayment and new purchase, not this fee. |
| Deferred payment | Accepted in graded cases | — | Interest at 5% p.a. may apply; seniors may get waiver. |
Order of deductions at sale: HDB loan vs bank loan differences
Imagine completion as a queue where claims are settled in order. Knowing that order helps you forecast exactly what the net sales proceeds will be.
With an HDB loan: the outstanding loan is cleared first, then the resale levy is deducted, and finally the required CPF refund (principal plus accrued interest) is taken. This sequence often reduces the cash you receive at handover.
With a bank mortgage: the bank redemption comes first, CPF refund follows, and the resale levy is paid last. The switch in order can change how much proceeds are available for other closing costs.
Shortfall handling, net sales proceeds, and legal implications
If sales proceeds are insufficient to fully refund CPF on a market-value sale, CPF normally accepts a proportional share of the net sales proceeds without requiring a cash top-up.
Your solicitor will prepare the payment schedule, track funds, and document any payment resale levy. Keep your banker updated so mortgage redemption clears before completion.
Note: Failure to settle the hdb resale levy can prompt HDB enforcement. Include accrued interest and CPF interest in your worksheet to avoid last-minute shortfalls.
- HDB loan order: loan → resale levy → CPF refund.
- Bank loan order: loan → CPF refund → resale levy.
- Model proceeds scenarios early to protect net sales proceeds and avoid enforcement risk.
Conclusion
Imagine closing a sale with confidence because timing, grants and payment sequencing were mapped weeks earlier.
Key takeaways, for your plan: a purchase of another subsidised home or a new EC usually triggers the resale levy; buying on the open market, a DBSS from a developer, or private property avoids that charge.
Anchor your strategy on the 3 March 2006 rule for amount calculation and the 9 December 2013 EC date for applicability. Build a timeline that aligns sales, payments and purchase so cash and proceeds cover obligations. Seniors planning retirement moves may qualify for interest waivers in select cases.
If uncertain, ask your solicitor or agent for a completion statement that lists levy, CPF housing grant refunds and other payments. With that clarity, you can choose the right property path and protect your net proceeds.
FAQ
What is the HDB resale levy and who is it meant for?
The levy is a charge applied when a household purchases another subsidized HDB home after benefiting from an earlier housing subsidy. It preserves fairness by reducing the advantage for buyers who already received grant-supported prices, ensuring public housing subsidies remain targeted to first-timers.
How does the levy keep housing subsidies fair for first-time versus second-timer buyers?
By requiring a contribution from households that acquire a second subsidized flat, the policy prevents repeated access to full subsidy benefits. Imagine a system where only new entrants enjoy the largest discounts; the levy restores balance so subsidies focus on those without prior support.
If I buy another subsidized HDB flat, will the levy apply?
Yes. Purchasing a second subsidized HDB unit typically triggers the levy if you previously received subsidy on your first HDB home. The charge depends on when your first flat was sold or bought and whether it was a standard HDB sale or fell under older rules.
Is the levy applicable when buying an HDB flat on the open market or private property?
The levy does not apply when you move from a subsidized flat into private property. Buying an open-market HDB resale from another owner also generally avoids the levy if your prior home was private or unsubsidized. Executive Condominium and developer DBSS cases have their own rules.
When is the levy commonly charged in buyer scenarios?
Typical triggers include buying another subsidized flat from HDB after selling your first subsidized flat, and in some cases when buying a new Executive Condominium from a developer depending on launch dates. Specific cut-off dates affect liability, so timing matters.
Does buying a new Executive Condominium (EC) always involve a levy?
Not always. ECs launched with land sales on or after December 9, 2013 follow stricter rules. If you upgrade into an EC while still holding a subsidized HDB unit, levy obligations depend on booking dates and whether the EC is classified as subsidized for levy purposes.
Which historical dates change levy liability?
Two key dates are March 3, 2006 and December 9, 2013. Flats sold or purchased on either side of these dates fall under different levy calculations and rules. Check the date that applies to your earlier flat to determine the correct levy regime.
How is the levy amount calculated?
Calculation varies. For first subsidized flats sold on or after March 3, 2006, fixed levy amounts apply. For homes sold before that date a percentage-graded method may be used. Household composition — single versus family buyers — also affects the amount and right-sizing considerations.
Are levy rates different for singles and households?
Yes. Singles face different levy bands and eligibility criteria compared with family households. Right-sizing incentives and caps are part of the framework, so single buyers should review the specific tables HDB provides to see the applicable figure.
Can sales proceeds and CPF be used to settle the levy?
You may use cash and net sales proceeds from the sale of your previous flat. CPF Ordinary Account (OA) funds refunded from the earlier property are typically not permitted for direct levy payment. Plan funding carefully when preparing for settlement.
What if I choose to defer levy payment?
Deferral may be possible but attracts interest at the prevailing rate, commonly around 5% per annum. Senior buyers may qualify for waivers or concessions in specific circumstances. Confirm current policy details with HDB before deciding.
How are deductions ordered at sale with an HDB loan versus a bank loan?
With an HDB loan, outstanding HDB loan balances are cleared first, then the levy is deducted, followed by required CPF refunds. With a bank loan, the lender claim and CPF refund usually take priority before levy deduction. The order affects net sales proceeds available.
What happens if there is a shortfall when the levy is due?
If net proceeds and available cash cannot cover the levy, you must make up the shortfall. Legal implications include delays in completion and potential enforcement actions. Engage legal counsel and HDB early to explore options such as payment schedules or waivers.
How do I find the exact levy amount for my case?
Check HDB’s official levy tables and calculators, and bring sale documents for your first subsidized flat. An HDB officer or licensed conveyancing lawyer can compute the charge precisely based on sale date, flat type, and household status.
