3 Hidden costs to know about when buying a home in Singapore

One of the things that we have always dreamed of is to be able to buy our own home. As we work hard, buying a home is always one of the things that we want to achieve. Being able to buy a house is considered a success in a country that has an expensive cost of living like Singapore. The cost of buying a house in Singapore has always been high. This is due to many factors. 

Singapore house prices are driven upward by its lack of land. As it is one of the most successful countries when it comes to economic conditions, it is a hotspot for business transactions. There are different businesses, investors, and entrepreneurs flocking to do business in Singapore. Along with these markets are local workers. As there are lots of business transactions in Singapore, there is a high number of the working class. With this, there is a high demand for land. However, Singapore being a small country means that there is competition. Locals and foreign workers are competing against each other for housing. Thus, driving Singapore’s house prices being driven up based on basic economics. 

This is why one should be careful before purchasing a house in Singapore because it is a big decision to make. Aside from this, Singapore house prices are sometimes not what it seems. Displayed prices may be different from the actual price you have to pay. There are a few hidden costs when you buy a house. The displayed price is usually just the cost of the house alone, without the added fees. Other fees must be paid before finally purchasing the house. So, before you make that long-awaited purchase, let us talk about the 3 hidden costs to know about when buying a home in Singapore.

Hidden costs are usually legal fees, a commission of a housing agent, and maintenance and renovation fees. These kinds of fees are the ones you pay along the way and not in one sitting. It is added to the initial Singapore house prices. So, you must be careful when planning which house to buy. The cost of buying a house in Singapore is more expensive than you think.

Option Fee and Option Exercise Fee 

Option fees refer to the Option-to-Purchase (OTP) fees. This is a reservation fee. Once you have paid this, your house is now “locked-in” for you. If you have already paid this, your agent is obligated to make the property available to you. This is one of the factors that make the cost of buying a house in Singapore expensive. However, this is just usually 1 percent of the property price. Usually, the maximum OTP is $1000. This fee is counted towards your down payment so you would not have to worry much about it. This fee usually applies to HBD flats and private properties. They have different fees depending on the property or flat type.

Stamp Duty and Additional Buyer Stamp Duty

Another added fee to the cost of buying a house in Singapore is tax. It is a tax on documents related to property. The amount usually depends on Singapore house prices. For example, you will have to pay 1 percent for every S$180,000. 2 percent for another S$180,000 after that, and 3% of the remaining price. If you are buying a house that costs S$420,000, you will have to pay 1 percent for the first S$180,000, 2% for the next S$180,000, and 3 % for the remaining S$60,000. So, this fee depends on the cost of the house you want to buy. Also, there is an Additional Buyer Stamp Duty, an extra cost for people who have more than one property. You will also have to pay for this when you want to buy another property. 

Maintenance and renovation fees

Purchasing a house is tricky. Especially when it is not a brand new house. Some opt to buy houses that are second hand due to high Singapore house prices. You can visit and inspect the house several times before purchasing. However, there will still be details or parts of the house that needs to be renovated or fixed. This is an added fee that will come along after you have bought the house and ready to move. Another fee that you will meet along the way is maintenance fees. It is the cost to keep your house up and running.

Know more before you property purchase

You have to be ready and well-informed before making a house purchase. With SRX Property, we make sure that you are up to date on the things you need to know before buying a house.

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