Buying a BTO flat is a rite of passage for many Singaporean couples. However, what happens if your circumstances change and you need to cancel your BTO application?
Depending on the different stages you are at in your BTO flat application, you 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 (MOP)).
Read Also: Step-By-Step Guide To Buying A HDB BTO Flat
You Applied For A Flat During The Sales Launch, But Change Your Mind
Along with every other BTO applicant (successful or unsuccessful), you would have paid an application fee of $10. This fee is non-refundable.
There will be no further penalties if you cancel your flat application during the sales launch application period. You can log in to the HDB Flat Portal > My Flat Dashboard to cancel your flat application before the end of the application period.
Penalty: $10 application fee.
You Have Made Your BTO Application (And Received A Queue Number)
Again, you would have paid the non-refundable application fee of $10. The ballot results for the application are released up to 2 months after the close of the application period
Assuming that you have successfully balloted for a BTO application, you will be issued a BTO queue number and invited to select a flat. At this point, if you choose 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.
If you are a first-timer families applicant, any accumulated additional ballot chances (from your previous unsuccessful BTO applications for a Standard flat) will be reset to 0, except in instances when there are 10 or fewer BTO flats to choose from. You will be placed in the second-timer category for 1 year in the computer ballot in subsequent BTO sales launches. If you accumulate another non-selection count during the 1-year period, your first-timer priority will be further suspended for another year.
If you are a second-timer applicant or first-timer singles applicant, incurring 1 non-selection count will bar you from participating in any sales exercises for a 1-year period.
Note: As HDB issues queue numbers for 200% 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. Similarly, if there are 10 or fewer BTO flats to choose from, it does not 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: $10 application fee. Accumulated additional ballot chances set to 0. First-timer priority is suspended for a year if you do not select a flat when invited to do so. Second-timers will not be allowed to participate in sales launches for a year.
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 your option fee.
Additionally, there will be a 1-year wait-out period from the cancellation date before you are 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).
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 there is a 1-year wait-out period before you can be included as an essential occupier or 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).
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 (MOP).
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 and Plus 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 as a result of the pandemic, HDB has also expressed their recognition of buyers’ circumstances and would consider appeals to waive forfeiture or MOP on a case-by-case basis.
The post What Happens If You Cancel Your BTO Application At The Different Stages appeared first on DollarsAndSense.sg.
