Getting a new home is always exciting, especially when getting a landed property in Singapore. But before buying landed property in Singapore, have you ever wondered about the landed property cost breakdown you will face?
Buying a landed property is a huge financial commitment. You will need to plan carefully. The landed property should meet your and your family’s need. You will want to consider the landed property cost breakdown before deciding which property to buy. So in this article, we will list out the landed property cost breakdown for you to understand more.
What Do You Need To Understand About Landed Property Cost Breakdown
Facts Of Landed Property Cost 1: Down Payment
Down payment is definitely in the landed property cost breakdown. When it comes to landed property, you are only eligible for a bank loan. Compared to HDB, HDB has another choice which is an HDB loan.
You will have to make at least 25% of the property price for the down payment of landed property. At least 5% of the down payment has to be in cash, while the balance of the 20% can be paid using CPF or your own cash. In comparison, HDB down payment will be lower.
Besides that, you will need to pay the option fee, which is an additional sum. The option fee usually is 5% of the purchase price.
Facts Of Landed Property Cost 2: Mortgage Per Month
Unless you are paying 100% cash upfront for your house, you will need to apply for a loan from a bank or any financial institution when you purchase landed property. The Loan-To-Value limit is up to 75%, and the average loan tenure is 25 years.
Another landed property cost breakdown that you need to pay will be the mortgage. A monthly mortgage amount is based on the price of your property. The rates may not be favorable.
The interest rates vary depending on whether it is fixed or floating. The different banks also have different rates (usually 1.2% to 3%). Fixed interest rates are generally fixed in a range of two to five years, while floating rates fluctuate according to the market value. There are three types of floating interest rates: SIBOR floating rates, board rates, and fixed deposits.
If the property you plan to get is still under construction, you may consider getting a loan without a lock-in period. You are free to reprice to a lower amount this way. But if your house is completed, you will want to get the loan with a lock-in period. Your interest rate will be maintained, and you can manage your finance accordingly.
Don’t leave this out from your landed property cost breakdown, as a different bank has different rates, which will affect your financial planning.
Facts Of Landed Property Cost 3: Legal Fee
The legal fee is another major expense you want to include in your landed property cost breakdown. The bank will normally have a default law firm, but you are feel free to find your own lawyer if you know any lawyer who can do the work for you.
The legal fee differs depending on the service you need. Usually, the legal fee range is from S$2,000 to S$3,000. Besides the legal fee charged by the lawyer, there is also a stamp duty that will be charged based on your property value. The higher the value is, the higher the stamp duty is. The stamp duty can be pricey
- First S$180,000: 1%
- Next S$180,000: 2%
- Next S$640,000: 3%
- Remaining amount: 4%
Facts Of Landed Property Cost 4: Home & Fire Insurance
While accidents may happen, home & fire insurance is not mandatory, but majorities require it from banks and other mortgage providers. You will want to include this in your landed property cost breakdown.
Home and fire insurance covers fires, robberies, and natural disasters like lightning strikes. It depends on the insurance plan that you get. Different insurance companies offer a variety of plans. Each plan may have different coverage, and the price will be different according to the coverage you need.
Most homeowners will want to get home insurance to ensure their property and belonging are covered in certain events.
Facts Of Landed Property Cost 5: Property Tax
Not forgetting to add this to your landed property cost breakdown – property tax. Owning such a large property, your property taxes will cost you a lot. It is similar to your income tax which you need to fork out annually
The tax based on the annual value of the landed property you have. The higher potential rental your property could fetch, you will want to expect a higher property tax. Another point to consider is depending on whether it is an owner-occupied home or not.
To calculate the property tax, multiply the Annual Value of the property by the tax rate applicable to your property. You can use IRAS Property Tax Calculator, or take a look at the breakdown of the amount of property tax you’d have to pay for an owner-occupied home:
Owner-occupier tax rates
| Annual Value ($) | Effective 1 Jan 2015 | Property Tax Payable |
|---|---|---|
|
First $8,000 |
0% |
$0 |
|
First $55,000 |
– |
$1,880 |
|
First $70,000 |
– |
$2,780 |
|
First $85,000 |
– |
$3,980 |
|
First $100,000 |
– |
$5,480 |
|
First $115,000 |
– |
$7,280 |
|
First $130,000 |
– |
$9,380 |
Source: IRAS
Facts Of Landed Property Cost 6: Renovation and Furnishing Costs
Another cost to include in your landed property cost breakdown. No matter if the property is ready to move in or isn’t in good condition. Depending on the situation of the property and your needs, a renovation will be needed accordingly.
Depending on how much renovation work you need, the renovation will cost differently. These works include flooring, plumbing, painting, and rewiring. Don’t forget about the furnishing work to decorate your home. Many people are willing to spend this money as it will be your home for years.
Buying a landed property is not as easy as you think. Many fees are to be included in your landed property cost breakdown. Ensure all the fees in your landed property cost breakdown to manage your financial planning.
Seeking Landed Property Builders in Singapore?
Builders.sg is a platform that connects property owners to trusted architects and builders across Singapore. If you live in Singapore and are looking for local landed property builders or architects, welcome to Builders.sg!
