Planning to break up after you BTO-ed? You might lose up to $78K

Breakups suck. But you know what’s worse?

Breaking up when you and your partner have already balloted for a BTO flat.

Yep.

While I’ve shared my experience with regard to the nuances of getting your BTO, as well as the joys of owning your own home.

I’ve also seen plenty of couples who’ve never seen it through.

So before you pop the question and ask “Ai BTO mai?” (Hokkien: Wanna BTO not?), did you know that you could lose anything from $10 to more than $78,000?

Note: the numbers and figures quoted in this article will be based on break-up scenarios involving a 4-room BTO HDB flat

TL;DR: WHAT WILL I LOSE IF I BREAK-UP AFTER I BTO?

Here’s how much you’ll stand to lose if you break up

• Before Unit Selection: $10
• After Booking A Flat but before Signing The Agreement For Lease: $2,010
• After Signing The Agreement For Lease but before Key Collection: $62,328.24
• After Key Collection: $78,487.87 (assuming a worst-case scenario where you don’t get a single cent back from HDB)

But there’s more to it than just financial loss…

You’ll also lose your First-Timer Applicant privileges and you’ll even get barred from buying or balloting for another BTO flat for a set number of years.

HOW MUCH WILL I LOSE IF I BTO AND BREAK UP?

[[nid:458665]]

We all know or at least heard of couples who’ve broken up after they’ve applied for a BTO.

And while we kinda know that it’s an emotional and potentially expensive affair, most of us don’t know how much we might lose exactly if we applied for one and changed our minds.

For this exercise, I’ll be using the following assumptions:

• You applied for a 4-room BTO HDB flat in Tampines GreenGlen (indicative starting price: $312,000) during the September 2019 BTO Sales Launch
• You’re a First-Timer Applicant
• Your average monthly household income is $5,000
• You take a CPF Housing Loan

to give you a better idea of the repercussions when you choose to BTO and break up.

BEFORE UNIT SELECTION

As a First-Timer Applicant, your housing needs are more pressing.

As a result, you enjoy greater priority when you apply for a new HDB flat.

Here are some of the benefits for couples, with a first-timer applicant, applying for a new BTO HDB flat:

• A higher proportion of flat supply for first-timers
• More ballot chances (you get 2 ballot chances)
• Additional ballot chances for unsuccessful attempts
• May be eligible for Staggered Downpayment Scheme

If you decide to cancel your application – even if you have not been called up HDB to book (or select) a flat – HDB will consider you as having rejected a chance to select a flat.

This means that if you cancel your application again, your First-Timer Applicant privilege will be revoked for a year.

TOTAL AMOUNT PAYABLE

If you’ve changed your mind about applying for a BTO, download and complete this form for submission: Cancellation of application (before selection)

How much you will lose: $10

AFTER BOOKING A FLAT BEFORE SIGNING THE AGREEMENT FOR LEASE

The option fee varies depending on the flat type that is booked.

The total amount that you lose isn’t that huge, but it’s no chump change either.

However, the biggest problem is that you’ll not be allowed to apply to buy or ballot for another HDB flat for one year.

Plus, any additional chances accumulated from previous unsuccessful applications will be reset to zero so whatever advantage you garnered initially is lost.

TOTAL AMOUNT PAYABLE

If you’re absolutely sure you want to cancel at this stage, download and complete this form for submission: Cancellation of flat (before signing of Agreement for Lease)

How much you will lose: $2,010

AFTER SIGNING THE AGREEMENT FOR LEASE BUT BEFORE KEY COLLECTION

By this stage, the stakes are a little higher.

DOWNPAYMENT

[[nid:461739]]

Assuming you take an HDB housing loan and you qualify for the Staggered Downpayment Scheme, you’ll need to put down 5% of the property purchase price as downpayment. That amounts to $15,600 for a 4-room BTO HDB flat with a property price of $312,000.

If you’re taking a bank loan, you would’ve paid 10% of the property purchase price, or $31,200 as downpayment instead.

BUYER'S STAMP DUTY

Using the Stamp Duty Calculator from the Inland Revenue Authority of Singapore’s website, you’ll need to pay $4,440 in Stamp Duty.

Note: According to a friend who found himself in this situation, if you’re using HDB’s lawyers, you might be able to get them to apply to IRAS for a refund of your Buyer’s Stamp Duty.

LEGAL FEES

Legal fees include Conveyancing Fees and Caveat Registration Fees.

Conveyancing fees are calculated:

• First $30,000: $0.90 per $1,000
• Next $30,000: $0.72 per $1,000
• Remaining Amount: $0.60 per $1,000

For a $312,000 property, you’ll need to pay $213.79 (inclusive of GST) in conveyance fees.

The Caveat Registration Fee of $64.45 (inclusive of GST) is payable when you sign the Agreement for Lease.

HOUSING GRANTS

Any grants you get, for example, the Enhanced CPF Housing Grant would also have to be returned with interest.

Assuming your monthly household income is $5,000. That means you have to return $45,000 plus interest.

Note: For the sake of simplicity, I’m going to take the amount as $45,000 for this calculation and ignore interest.

TOTAL AMOUNT PAYABLE

If you die die must break up at this stage, you’ll need to download and complete this form for submission: Cancellation of flat (after signing Agreement for Lease)

How much you will lose: $62,328.24

AFTER KEY COLLECTION

By this point, you’ll need to submit your marriage certificate within three months from your BTO completion date.

You could apply for a deferment, but that’s subjected to HDB’s approval on a case-by-case basis.

After collecting your key, you would have paid the balance of your property’s purchase price using:

• Cash
• CPF, or
• Bank loan

On top of that, there’s a whole slew of fees and insurance to pay for.

At this stage, you’ll effectively be surrendering possession of your BTO HDB flat. While HDB will offer you some compensation, that amount will be at their discretion.

And if you’re funding this purchase with a bank loan, you’re going to need a large sum of money to repay the loan.

REGISTRATION FEE

There are two types of registration fee:

• Lease In-Escrow registration fee of $38.30 – if HDB acts for you in the flat purchase
• Mortgage In-Escrow registration fee of $38.30 – if you take a loan from the bank

SURVEY FEE

The survey fee varies depending on the flat type.

Expect to pay $294.05 (inclusive of GST) for a 4-room flat.

HOME PROTECTION SCHEME (HPS)

Using CPF’s HPS Premium Calculator, and assuming:

• You are 30 years old
• You take up a $267,000 loan amount
• Your loan is a 25-year tenor

The annual premium payable is $221.34.

FIRE INSURANCE

HDB’s current appointed insurer is FWD Singapore Pte Ltd. Fire Insurance will cost you $5.94 (inclusive of GST) for a 4-room flat.

TOTAL AMOUNT PAYABLE

How much you will lose: $78,487.87 (assuming a worst-case scenario where you don’t get a single cent back from HDB)

CLOSING THOUGHTS

[[nid:448651]]

The costs calculated here are just estimates and will differ depending on a variety of circumstances.

And all of this is assuming you haven’t gotten married yet.

FYI: we’ve worked out earlier that an average wedding will cost $27,610.

Can you imagine having to pay for the wedding AND your BTO flat only to call it off?

Damn siao please.

There’s always the case for applying for a BTO first since project launches in an area or estate, which you want to live in in the future, do not come by every quarter.

If your relationship is in a place where you’re serious about each other and have thought about your future together.

Then sure.

Having the “Ai BTO mai?” talk would help bring your relationship to the next level.

But remember to weigh that against the financial implications and repercussions to your eligibility for future BTO projects if your relationship doesn’t weather the application process.

This article was first published in Seedly.