The COMPLETE property lingo guide for every Singaporean who’ll ever own a house

Researching on property online or speaking to an agent doesn’t have to be like unscrambling Morse code.

What’s the difference between a VIP preview and a VVIP preview? Stamp duty, whose duty?

We’ve done the work of sorting through all the common property jargon to make your home-hunting easier. Read on to learn more!

Common property-related terms

When buying a new condo/ property:

  • Direct Developer Sales Team
  • VIP Preview / VVIP Preview
  • Co-broke deal
  • Temporary Occupation Permit
  • Certificate of Statutory Completion
  • Option to Purchase
  • Stamp Duty
  • Buyer’s/ Seller’s market

Things you need to know about your new home:

  • Property tenure
  • En-bloc
  • Plot ratio
  • Strata title

Things you need to know about renting a home:

  • Letter of Intent
  • Tenancy Agreement

HDB flat must-knows:

  • Minimum Occupancy Period
  • SPR Quota
  • Ethnic Integration Policy

 

When buying a condo/ property

Direct Developer Sales Team

Developers of new condo projects may appoint real estate agencies to conduct marketing efforts for them. The agents from these agencies call themselves the Direct Developer Sales Team.

The pros? Property agents from the Direct Developer Sales Team will probably have solid knowledge about the development – not just the factual bits like what’s in the area, but also the potential upsides, exit strategies and such.

That said, some property-seekers prefer to engage other agents, as these agents are more neutral towards the project and will be able to offer a balanced comparison of the new condo with other options.

VIP/ VVIP Preview

If you’ve heard of “Direct Developer Sales Team”, you’ve probably also heard of them advertising their VIP/ VVIP previews.

Before the official sales launch of a new condo development, developers tend to soft launch it with a “VIP” or “VVIP” preview where buyers are invited to buy units before anyone else.

Besides getting first dibs, early bird discounts are offered as a strategy for developers to stimulate demand.

At the other end of things, there’s also a “last-minute” discount, typically for the last few unsold units!

Co-broke deal

When there’s more than one agent liaising on your behalf, the deal is termed co-broke.

But don’t worry – the amount of agent commission you pay will be the same, or will be what was originally agreed upon. The only difference is how the agents split it between themselves!

Temporary Occupation Permit (TOP)

An approval that marks the date where owners/tenants are legally (and safely) permitted to stay in a property.

Certificate of Statutory Completion (CSC)

The CSC comes after the TOP, and is issued by the Commissioner of Building Control and denotes the legal completion of the project, indicating the completion of building works and compliance of requirements.

Option to Purchase (OTP)

If you’re buying a resale home, you’ll be granted an OTP – basically a legal way to chope the property at the specified negotiated price – in exchange for an Option Fee. 

The OTP usually valid for 14 days for condos and 21 days for HDB flats. During this time, the seller has to stop advertising their property to other potential buyers.

Exercise your OTP by completing the property purchase within this time frame.

Only place an Option Fee if you’re sure, though! If you back out, the seller is entitled to keep the Option Fee.

Stamp Duty

Governmental fees that are chargeable upon a successful property sale transaction.

There are 3 types of stamp duty – Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD), and the Seller’s Stamp Duty (SSD).

The first two are payable by the buyer.

The BSD applies to Singaporean Citizens, Permanent Residents and foreigners alike, and is levied at the following rates:

  • First S$180,000: 1% 
  • Next S$180,000: 2%
  • Remaining amount: 3%

The ABSD is only applied to residential property, where foreigners pay 20% tax duty for any residential property, regardless of volume.

Singaporean Citizens and Permanent Residents pay:

  • First purchase: 0% and 5% respectively
  • Second purchase: 12% and 15% respectively
  • Any purchase thereafter: 15%

And the sellers? If you’re selling your property less than 3 years after buying it, you’ll have to pay:

  • Within 1 year of buying: 12%
  • Within 1-2 years of buying: 8%
  • Within 2-3 years of buying: 4%

Buyer’s/ seller’s market

In theory, this determines how much negotiating power you’ve got as a property buyer or a seller.  

A buyer’s market occurs when supply exceeds demand – in the context of property, the supply of properties for sale exceeds the number of property seekers.

In this situation, the buyer wields more bargaining power. Because sellers are more inclined to negotiate in a market that’s performing against their favour, buyers are eventually more likely to land a better price.

A seller’s market, on the other hand, is characterised by higher property prices and shorter sell times.

Because demand exceeds supply, houses are easy to sell, and bidding wars might even transpire if a super pretty house receives multiple offers from interested buyers.

 

Things you need to know about your new home

Property tenure

The amount of time of which the owner has the legal right to a property.

HDB Flats usually have a tenure of 99 years, while condos either have tenures of 99 years or are freehold.

99 Years Leasehold: Simply means ownership of the property will expire after 99 years. In other words, after 99 years, the value of your property will be 0.

Freehold: Indefinite ownership of the property. Forever!

For this very reason, a freehold unit is usually priced 10-15% higher than a 99 year leasehold property.

However, few properties even reach 99 years since there will likely be redevelopments or en-bloc (more on this in a bit), regardless of tenure.

99 years leasehold is a better choice for landlords since rental prices are not affected by property tenure, which means rental yield will be higher! Read our full freehold vs leasehold guide here.

En-bloc

En bloc is basically a collective sale of an estate to make place for a new estate.

This is usually done by majority voting – 90% of votes are required for property developments less than 10 years old, and 80% for developments 10 years or older.

Plot ratio

If you’re buying a new condo, you’re probably looking at the layout of the unit, the amenities nearby… But one thing buyers often overlook is the plot ratio of the development.

It tells the density of the development on a certain piece of land, by evaluating total covered area on all floors of all buildings on a certain plot divided by the area of the plot.

This is also a good sign of what living in the condo would be like – a high plot ratio, meaning there are a lot of units for a given area of land, means it’ll probably be a lively place to live. A condo with a lower plot ratio would probably provide more peace and quiet.

Strata title

A form of ownership termed for apartment blocks/condominiums (as opposed to landed property).

With a strata title, you’ll be issued a share value of the property – the amount of shares you have in relation to other owners in the development.

For instance, if the share value of a condo unit is 5/350, this means 5 out of the condo’s 350 share values has been allotted to that unit.

This share value determines the amount of contributions fo maintenance of the common areas in the development, like lifts, car parks, swimming pools and gyms.

 

Things you need to know about renting a home

Letter of Intent (LOI)

Written offer which is made by a tenant to a landlord, stating the tenant’s intent to proceed with renting the property.

This is usually accompanied by a Good Faith Deposit, typically a month of rent.

Once the rental deal is sealed, the Good Faith Deposit can serve as your security deposit, or go towards paying the first month of rent.

Tenancy Agreement

Official lease contract that covers all clauses, caveats or agreements between a landlord and tenant.

 

HDB flat must-knows

Minimum Occupancy Period (MOP)

The amount of time required for an owner to legally occupy the property before they can sell or lease the apartment out.

The MOP for HDB flats, regardless of whether it’s a BTO or resale flat, is 5 years.

The Minimum Occupancy Period is not applicable to private properties such as condos, but if you sell your condo within 3 years of buying it, you’ll be liable to pay a Seller’s Stamp Duty.

SPR Quota

The SPR quota refers to a quota of Singapore Permanent Residents (SPR) in the block and/or neighbourhood.

This ensures that SPR families can better integrate into the local community. Malaysians are excluded from this quota because of their close cultural and historical similarities with Singaporeans.

Before selling your HDB flat to a non-Singaporean non-Malaysian, you’ll have to check that the SPR Quota for your block and your neighborhood hasn’t been reached using this HDB e-service.

Ethnic Integration Policy (EIP)

Similar to the SPR Quota, the EIP ensures that there is a balanced mix of the various ethnic communities in HDB towns, set at blocks and neighbourhood levels and based on the ethnic make-up of Singapore.

Likewise, do a quick check with the same HDB e-service.

 

Property jargon, explained

Selling or purchasing your next property might be a confusing process. Communicating with estate agents or reading tips from industry experts online can be even more overwhelming with the overuse of jargon.

Share this article to benefit your friends – especially for first-time buyers or sellers!

 

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