“Want to BTO?” Has become the indirect Singaporean version of “Will you marry me?” Applying for a BTO is the first step a couple would take towards marriage. This is typically done about three years before the actual marriage, but, anything could happen within the span of three years.
This question was asked by a community member a couple days back:
Everyone talks about their BTO application and its arduous process, but no one talks about the expensive break-up cost after that. It is an ugly truth you wouldn’t want your friends and relatives to know about, but this does happen to more Singaporeans than you think.
So here it is, your healthy dose of reality as we lay out the real costs involved in defaulting on your BTO.
But before we talk about how much money a couple could lose, here’s a TLDR on the full cost of a BTO flat to put things in perspective.
The Costs Involved: Applying for A BTO
Sample Case Study:
- Typical 4-room flat in Bukit Batok
- Flat price of BTO: $328,200
- Purchase price: $339,003.50
BTO Step-by-step | Fee Details | Fee for 4-room flat (example) |
---|---|---|
Application for BTO | Application | $10 |
Option Fee (Booking flat) | $2000 (4 room flat and up) $1000 (3 room flat) $500 (2 room flat) | $2000 |
Signing Lease Agreement | Stamp Duty and Legal Fees: 1% on first $180,000 2% on next $180,000 3% on the remainder | $5,048 |
Downpayment: 10% (HDB Loan) 20% (Home Loan) | $33,107 (10%) | |
Collection of keys | Stamp Duty and Legal Fees | $870 |
Fire insurance (5 year premium including 7% GST) | $27.50 | |
Balance of the purchase price | $297,963 | |
Total | $339,025.50 |
Defaulting On Your BTO
Aka: The heartbreak
If you decide to break-up early into the BTO application, you may only lose the initial $10 fee or else $2000 more if you are already allocated a unit. However, anything from here and after signing the lease agreement could cost you a leg and arm, from 10% of the downpayment to its full amount depending on which stage you decide to default on your BTO at.
A: Ballotted for flat and selected unit
Money Lost:
- Application Fee: $10
- Option Fee (booking of flat): $2000 (4 room flat and up), $1000 (3 room flat), $500 (2 room flat)
Chances Lost:
- Barred 1 year: From buying or ballloting for BTO/ EC/ Resale Flat
- 0 Chance to ballot for new BTO
Estimated Total Loss (4-room BTO) = $2010
B: Signed Lease Agreement
Money Lost:
- Application Fee: $10
- Option Fee: $2000 (4 room flat and up), $1000 (3 room flat), $500 (2 room flat)
- Downpayment (5% purchase price):
- Housing grant: 5% – 10% of purchase price
- Stamp Duty Fees:
1% on first $180,000
2% on next $180,000
3% on the remainder
- Stamp Duty Fees:
- HDB Lawyer Fees for caveat: Waived
Chances Lost:
- Barred 1 year: From buying or ballloting for BTO/ EC/ Resale Flat
- 0 Chance to ballot for new BTO
Note:
- If parents’ names have been listed in application of flat, one partner can retain the flat with their parents.
Estimated Total Loss (4-room BTO, 5% downpayment) = $30,000
C: Collected keys
Money Lost:
- Application Fee: $10
- Option Fee: $2000 (4 room flat and up), $1000 (3 room flat), $500 (2 room flat)
- Downpayment (5% purchase price):
- Housing grant: 5% – 10% of purchase price
- Stamp Duty Fees:
1% on first $180,000
2% on next $180,000
3% on the remainder
- Stamp Duty Fees:
- HDB Lawyer Fees for caveat: Waived
- Survey Fee = Around $300
- Lease In-Escrow Fee $38.30
- Mortgage In-Escrow Fee (Loan fee): $38.30
- Mortgage Stamp Fee $500
- Fire insurance (5 year premium including 7% GST) = $27.5
- Balance of purchase price: 80%-90% of purchase price
- Wedding costs (by now, most Singaporean couples are already preparing for the wedding, assuming you intend on collecting your keys right after/ before marriage) = $15,000 and up
Chances Lost:
- Barred 1 year: From buying or ballloting for BTO/ EC/ Resale Flat
- Voided first-timer applicant benefits
Estimated Total Loss (4-room BTO, 5% downpayment) = $200,000 and up (highly dependent on individual situations)
Note:
- CPF is the couple’s Ordinary account is usually used to pay off a portion of the flat price
- Housing grant is used for purchase price only and cannot be used to pay for fees (eg. stamp duty, legal fees)
- Example and fees are applicable for Singaporeans only
What You Can Do To Alleviate The Problem
Hindsight is a beautiful thing, here’s some advice from the community we picked out that may just help if you’re in this dreadful situation now:
1. Appeal To HDB
Appealing to HDB can be an arduous process since it is a case-by-case basis review. Although strict, this may still be worth a shot.
Paul: If financial is an issue, work out with HDB as to whether payment can be by installments etc. If not, approach your MP. Exhaust all appeal avenues until they are closed. Good luck.
2. Transfer Wedding Package
The average cost of a wedding is around $30,000 to $50,000. By the time you have signed your lease, you probably already started preparing for your wedding by engaging a wedding planner and signing for a wedding package. These things definitely won’t come cheap, especially if you have book an expensive hotel for the banquet. However, you can try selling off or transferring your wedding package to someone you know whom is planning for their marriage too.
Siti: For the wedding, is there a way to transfer your package or wedding decor stuff etc to another couple? Maybe can advertise. Surely some couple don’t mind to take over your wedding preparations package at a discounted price?
Steph: Take this w a pinch of salt pls: try selling the wedding package on Carousell?
3. Unorthodox: One Side Takes Over BTO With New Partner
If you manage to find a new partner during this period and are confident of the relationship, it is possible to transfer the flat’s name to your new partner instead.
Hafiz: I have some friends in this situation before. There’s no way out of it… unless one of the couple finds a new partner to take over the BTO… (case by case basis) it did work out for a couple of people that i know of. a bit unorthodox i know. but somehow it worked out for them.
4. Work Hard To Pay Off
The most straightforward way to solve this problem is to work hard enough to pay off this debt. The truth is, you’ve got to still pay at the end of t
Here’s some advice our supportive community has for you:
Veronique: My advice is to pay up, save harder and be thankful you had the wisdom to call it off rather than be married for the sake of the BTO.
5. Prevention: Get Married First
Kenneth: Also, instead of BTO-Ing first, attempt to ROM and actually get married first. I just did that and am happy to report that things are working out well financially
And to the anonymous man who lost your money. We wish you all the best and hope you found this article useful in aiding your recovery of your broken heart. 🙂
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