Buying a BTO flat is a rite of passage for many Singaporean couples. However, what happens if our circumstances change and we need to cancel our BTO application?
Depending on the different stages we are at in our BTO flat application, we will incur different penalties.
Here’s what happens if you need to cancel your BTO application (up to the point where you fulfill your Minimum Occupation Period).
Read Also: Step-By-Step Guide To Buying A HDB BTO Flat
You Have Made Your BTO Application (And Received A Queue Number)
Along with every other BTO applicant (successful or unsuccessful), you would have paid an application fee of $10. This fee is non-refundable. The ballot results for the application would be released up to 2 months’ time after the close of the application period
Assuming that you have successfully balloted for a BTO application, you would be issued a BTO queue number and invited to select a flat. At this point, if you choose to not to select flat, you are deemed to have rejected a chance to book a flat.
This choice to cancel your BTO application and not select a flat will affect your future BTO applications. Your accumulated additional ballot chances (from your previous unsuccessful BTO applications in the non-mature estates) will be reset to 0.
If this is your second time not booking a flat/ not selecting a flat, your first-timer priority will be suspended for a year. This will continue to be suspended for another year if you continue not to book a flat when invited twice to book a flat during the 1-year period
Note: As HDB issues queue numbers for 300% of the flat supply, it is possible for you to receive the queue number and invitation to book a flat but there are no available flats to select from when it comes to your turn. If this happens, it doesn’t count as rejecting the chance to book a flat. Your accumulated additional ballot chances and first-timer priority remain unaffected if there are no available flats for selection.
Penalty: Accumulated additional ballot chances set to 0. First-timer priority suspended for a year if you cancel twice.
Read Also: Here’s What Happens When You Give Up Your HDB BTO Queue Number
You Have Booked A Flat And Paid The Option Fee
The booking exercise takes place usually around 4 weeks after the release of the ballot result. In order to book, you would have to place an option fee.
This option fee differs depending on the flat type: $500 for 2-room Flexi, $1,000 for 3-room and $2,000 for 4-room and larger flat types. This option fee also counts towards your downpayment for the flat.
At this point, if you choose to cancel your BTO application, you will forfeit the option fee.
Additionally, you would not be able to apply or be included as an essential occupier for:
- a new flat directly from HDB,
- a resale flat with CPF housing grant,
- a Design, Build and Sell Scheme (DBSS) flat from the property developer,
- an Executive Condominium (EC) unit from property developer, and
- a resale flat that has been announced for Selective En bloc Redevelopment Scheme (SERS).
This wait-out period will last for a year from the date of the cancellation of the flat application.
If you have accumulated any additional ballot chances as a first timer, this will also be reset to 0.
Penalty: Forfeiture of option fee ($500 to $2,000). One-year wait out period before buying a flat (including resale flat with CPF housing grant, DBSS and EC). Accumulated additional ballot chances set to 0.
Read Also: Complete Guide To HDB Housing Grants In Singapore For Different Types Of Flats
You Have Signed The Lease Agreement
About six months after booking the flat, you would have been invited to sign the lease agreement. At the signing of lease agreement, you would also have paid the downpayment (at least 5% of the purchase price), as well as the stamp duty and legal fees.
At this stage, if you choose to cancel your BTO application, the cost would be higher.
You would forfeit 5% of the purchase price. While the legal fees paid are non-refundable, you may apply to IRAS to refund the stamp duty via HDB or your solicitor.
Similar to the prior stage, you would not be able to apply or be included as an essential occupier for one year to purchase:
- a new flat directly from HDB,
- a resale flat with CPF housing grant,
- a Design, Build and Sell Scheme (DBSS) flat from the property developer,
- an Executive Condominium (EC) unit from property developer, and
- a resale flat that has been announced for Selective En bloc Redevelopment Scheme (SERS).
This wait-out period will last for a year from the date of the cancellation of the flat application.
If you have accumulated any additional ballot chances as a first timer, this will also be reset to 0.
Penalty: Forfeiture of 5% of purchase price and any expended legal fees. One-year wait out period before buying a flat (including resale flat with CPF housing grant, DBSS and EC). Accumulated additional ballot chances set to 0.
Read Also: 6 Dates That HDB Flat Buyers Need To Know That Are On Their Agreement For Lease
During The Minimum Occupation Period (MOP)
While most of us would think that our flats are ours after completion, we cannot sell our flats freely on the open market until after the Minimum Occupation Period.
The Minimum Occupation Period (MOP) starts at the point of completion for the flat or the date of key collection and both HDB owners and occupiers listed in the flat application are subject to it. This is 5 years for most flats and 10 years for Prime Location Housing Model flats.
HDB flat ownership is also subject to the eligibility of the family nucleus or the single owner under HDB’s eligibility schemes.
There may be instances where your circumstances change and you are no longer become eligible to hold your HDB flat.
For example, in a case of divorce where neither spouse meets the eligibility criteria to retain the flat (and are unable to include another person to fulfil the criteria), the MOP must be fulfilled by the divorce completion date for the flat to be sold on the open market. If the MOP is not yet satisfied, HDB will assess the flat suitability for return and determine the compensation amount for the flat.
Read Also: 6 Lesser-Known Facts About Minimum Occupation Period (MOP) For Singaporeans
Cancelling Your BTO Application May Not Be Your Only Choice
In most cases, the choice to cancel our BTO application is driven by unfortunate circumstances. You may suffer a relationship breakdown that cause you to no longer be eligible for the Fiancé and Fiancée scheme.
However, there are alternatives as HDB does offer some degree of flexibility on a case-by-case basis.
For instance, it may be possible to appeal to HDB to proceed with the BTO application with a different partner to form the family nucleus.
In the event of marital breakdown within the MOP, it may be possible to retain the flat with a different family member to form the family nucleus or appeal for the flat to be sold on the open market.
According to MND, HDB had approved about 5,000 households to sell their flats on the open market without fulfilling their MOP in the five years prior to 2021. Reasons for the exceptions include financial hardship, divorce or demise of the owner.
Additionally, due to the delays to BTO completion, HDB has also expressed their recognition of buyers’ circumstances and would consider appeals to waive forfeiture or MOP on a case-by-case basis.
Read More: Will Your HDB BTO Key Collection Date Be Delayed, And Can You Further Defer?
The post What Happens If You Cancel Your BTO Application At The Different Stages appeared first on DollarsAndSense.sg.
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