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Buying property in Singapore: Purchasing property under construction


Deborah Law explains why buying a property that is still under construction can be a good idea. For one thing, it gives you time to come up with the funding in stages.

Payments required at various stages

Building Schedule
Payment Quantum
(usually a % of
the agreed purchase price)
Booking Deposit5%
Signing of Sales & Purchase Agreement15%
Completion of Foundations10%
Completion of Superstructure10%
Completion of Brick Wall5%
Completion of Ceiling/ Roofing5%
Completion of Electrical Wiring/ Plumbing5%
Completion of Roads/
Car Parks/ Drainage
Issuance of Temporary Occupation Permit25%
Certificate of Statutory Completion15%

As with buying any property there is a standard Option to Purchase document. The booking fee for any option is at least five percent. As purchaser, you have three weeks to exercise this option, and the Sales and Purchase (S&P) agreement must be entered into by the end of the eighth week. If you decide not to exercise the option, the developer must refund 75 percent of the booking fee to you.

How are you protected?

  • The developer is required by law to provide properties that are free of defects, and you have a year’s warranty for them to fulfill their obligations.

  • If the unit ends up bigger than the original floor plan, the purchaser does not pay extra; but if it ends up more than 3 percent smaller, the developer must recompense you pro rata at the original price per square foot.

  • The developer may not deviate from the approved plan without approval from the BCA (Building and Construction Authority). If he uses cheaper materials or omits work he must reduce the price accordingly.

  • If the building differs substantially from the plans, you can pull out of the agreement and demand a full refund, plus interest at 10 percent per annum

What if you default?

If you fail to pay a scheduled payment within 14 days, you will be liable to pay interest at 2 percent above the prime rate. After another 21 days’ grace, the developer may sell the property, recover all interest owing and keep 20 percent of the purchase price before refunding to you any balance of what you have paid.

In terms of the S&P agreement, the legal period of completion of a property under construction is about two years. The building can only be occupied once the TOP or CSC (Certificate of Statutory Completion) is issued.

To help prevent property speculation – the so-called “flipping” of properties – the purchaser is not allowed sub-sell until the S&P has been signed and the Stamp Duty paid.

Deborah Law is Executive Director of Expat Realtor.
Contact her at +65 9171 3392 or +65 6255 1027, or at property@expatrealtor.net.