Pros & Cons Of Applying For A BTO Flat In Advance (Before You Are Ready To Settle Down)

To apply for a Build-To-Order (BTO) flat, one would usually need to form a family nucleus to apply under the Public Scheme. For singles who are age 35 and above, they are only able to apply for 2-room BTO flexi flats.

Unless you are applying with your parents (and this means they do not own any existing HDB flats or private properties), most Singaporeans would typically apply with their spouse or spouse-to-be. The Fiancé/Fiancée Scheme allows couples to apply for a flat even if they are not married at the point of application. However, they need to submit their marriage certificate before taking possession of their BTO flat.

The decision to apply for a BTO flat in advance with your spouse-to-be presents both pros and cons. This is particularly true for those who have yet to decide if they are truly ready to settle down with their current partner.

Pros Of Applying For A BTO Flat In Advance

Pro 1: BTO Flats Can Take Three Or More Years To Be Ready So Applying In Advance Makes Sense If You Believe You Will Settle Down By Then

The biggest advantage to applying for a BTO flat in advance is that the waiting period to get the keys for the flats would usually be at least three or more years.

This means that even if you are not ready to settle down today with your spouse-to-be, both of you could be well ready by the time you get the keys to your future flat.

By then, you could be married, have a stable job, and may even have a child or two. Securing a BTO in advance makes sense because while your BTO flat is being built, you can work towards settling down other parts of your life in the next few years. This is opposed to settling down first by getting married, and then applying and having to wait another three to four years for your home to be ready.

Pro 2: You May Not Qualify For A BTO Flat By The Time You Are Ready To Settle Down

To apply for a BTO flat, your joint monthly income ceiling cannot exceed $14,000.

For fresh graduates or those who have worked only one or two years, exceeding the monthly income ceiling of $14,000 is unlikely. However, if you and your spouse/spouse-to-be have already started working for a few years, you may find yourself in the unfortunate situation where your combined monthly income has exceeded $14,000, making both of you ineligible to apply for a BTO flat.

If you applied for a BTO flat earlier in your career when your income was lower, you could have still got your BTO flat in three to four years even if your combined income had exceeded $14,000 by the time you collected your keys.

Pro 3: You Can Enjoy Higher Grant Amount

As we progress in our careers, we are likely to earn a higher salary. The other “downside” to a higher combined monthly income is that we 1) either don’t qualify for housing grants or 2) get a lower grant amount.

For example, under the Enhanced CPF Housing Grant, we can receive a grant of $30,000 if our combined monthly income is $6,000. This could be a realistic starting salary for two fresh graduates in their first year of working ($3,000 each). However, if they were to apply for their BTO flats three years later, their combined monthly income could have risen to $9,000 a month ($4,500 each). At that income level, they would not receive any grant amount under the Enhanced CPF Housing Grant.

Pro 4: You Get Additional Ballot Chances If You Are Unsuccessful After Two Rounds Of Application In Non-Mature BTO Estates

One mistake that some couples make is thinking that they can secure a flat as soon as they are ready to settle down and start applying for a BTO. This is, unfortunately, not always true.

It’s possible that your first couple of ballot attempts may prove to be unsuccessful. To give you a better chance for future BTO application, first-timers who are unsuccessful after two rounds of application for BTO projects in non-mature estates will receive an additional ballot chance starting from their third application, for every application they make for BTO launches in non-mature estates.

Thus, rather than wait till they are perfectly settled down before applying for a flat, some couples may prefer to apply earlier, knowing that it may take a while before they are successful in their application.

Read Also: Eligibility Criteria For Buying A HDB In Singapore

Cons Of Applying For A BTO Flat Before You Are Ready To Settle Down

While applying for a flat in advance has its advantages, there are also valid concerns that you should consider.

Con 1: You May No Longer Be Together Before The Flat Is Ready

The most common situation that could happen is that you and your partner/spouse-to-be are no longer together by the time the flat is ready. This is even more probable when you are not engaged at the point of flat application. Unless you are ready to commit long-term to the relationship, applying for a BTO flat in the hopes that you would have settled down by the time you get your keys could be a risk not worth taking.

Con 2: Your Housing Plans May Have Changed Significantly By The Time You Get Your Flat

Three to four years is a long time and your housing needs may change from the point of flat application, to when you finally get your keys. Some common changes could include.

– You bought a 3-room flat as it’s a more affordable choice when you first applied as a young couple. By the time you collect your keys, you have two kids and an adult (parent/domestic helper) who needs to move in with you. You wish you had bought a bigger home in the first place.

– The location of your flat isn’t ideal as it’s too far from where your elderly parents are living and they need your help on a regular basis due to health reasons. At the same time, your BTO flat is too small for them to move in.

– You now have kids and you realised that the BTO flat that you bought is a distance away from the ideal school you want to send them to. Unfortunately, you have to serve out the Minimum Occupancy Period (MOP) first.’

Con 3: It Stops You From Investing In Private Properties

When we apply for and secure a BTO flat, it comes with some property limitations. One such limitation is that from the point of flat application till we serve our 5-year MOP, we cannot invest in other private properties.

Assuming the flat takes four years to be ready in addition to the 5-year MOP, this means a total of nine years when we can’t take an interest in other properties, even if we think they could be good investment opportunities and can afford to invest in them.

Con 4: You Could Lose Your First-Time Privileges If You Choose Not To Select A Flat

You apply for a flat and you are fortunate to be invited by HDB to select a unit. However, you change your mind and thus, opt not to choose a unit.

From the October 2023 BTO sales onwards, first-timer will lose their first-timer privileges if they reject the chance to select a flat. This applies to the first-time rejection/ non-selection of the flat. This means they will be deemed as second-timers for a year in the BTO ballot. So you need to apply with the intention of actually choosing a flat if you are invited by HDB to do so.

Read Also: Here’s What Happens When You Give Up Your HDB BTO Queue Number

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