Resales Levy
Resale Levy in introduced in the measures on 9th of December 2013. Since then all EC land parcels sold on or after 9th of Dec will be affected with resale levy imposed for 2nd timer applicants. So what is resale levy, who is affected and how are you affected? All will be explained below.
What is Resale Levy?
The resale levy is meant to reduce the subsidy on the second subsidised flat so as to maintain a fair allocation of public housing subsidies between first and second-timer citizen families.
Basically, it means that resale levy is payable by households which are buying their second subsided flat or executive condominium from HDB.
Situations in which a resale levy is payable
You need to pay a resale levy in either of these cases:
- You sell your subsidised flat after meeting the Minimum Occupation Period (MOP), and then buy a second subsidised flat from HDB or take over ownership of a subsidised HDB flat
- You sell your subsidised flat after meeting the MOP, and then buy an EC from a developer where the land sale was launched on or after 9 December 2013, including those where tenders were not closed, i.e. Westwood Avenue, Canberra Drive and Anchorvale Crescent
You need not pay a resale levy if you are buying any of these:
- Design, Build and Sell Scheme (DBSS) flat from a developer
- EC from a developer; where the land sale was launched before 9 December 2013
- HDB resale flat
- Private residential property
| The scenarios whereby a resale levy is payable/not payable: | ||
|---|---|---|
| Type of flat seller owns previously/Existing flat | Type of flat seller plan to buy after the sale of existing flat | Resale Levy – Payable? |
| New flat bought directly from HDB | Either of the following
|
Yes |
| New flat bought directly from HDB | Either of the following
|
No |
| Resale flat bought with CPF housing grant | Either of the following
|
Yes |
| Resale flat bought with CPF housing grant | Either of the following
|
No |
How much do you need to pay?
From 3rd March 2006 till current
The amount of resale levy is graded according to the flat type of your first subsidised flat. If your first subsidised flat is a 2-room flat will pay a resale levy of $15k. Those whose first subsidised flat is a 3-room, 4-room, 5-room and Executive flat will pay a resale levy of $30k, $40K, $45k and $50k respectively when they purchase a second subsidised flat.
| For those who have yet to sell their subsidised flat or sold on/after 3rd Mar 06 | |
|---|---|
| First Subsidised Flat Type | Amount of Resale Levy Payable under current Policy |
| 2-room | $15,000 |
| 3-room | $30,000 |
| 4-room | $40,000 |
| 5-room | $45,000 |
| Executive Flat | $50,000 |
Before 3rd Mar 06
If you have sold your first subsidised flat before 3rd March 2006, your resale levy will fall under this category. Example as follow:
- Booked a second subsidised flat or an Executive Condominium unit from the developer before 3rd March 2006. This is regardless of whether they have sold or submitted a resale application to sell the first subsidised flat, or
- Sold the first subsidised flat and opted for deferred resale levy, or
- Submitted a resale application to HDB before 3rd March 2006 for the sale of their first subsidised flat.
| Amount payable under the previous Resale levy policy Below are the charges based on resale price or 90% of market valuation, whichever is higher |
||
|---|---|---|
| Flat Type | Resale Levy Payable by Family Grant Recipient | **Resale Levy Payable by Singles/Half Grant Recipient |
| 2-room | *10% / 15% | *5% / 7.5% |
| 3-room | 20% | 10% |
| 4-room | 22.5% | 11.25% |
| 5-room & Executive | 25% | 12.5% |
*2-room flat sellers pay a lower rate, i.e. 10% or 5%, only if they buy a bigger flat direct from HDB
**These resale levy rates apply only to seller of flats previously bought with singles grant and who submit their resale applications on or after 15 Sept 2004
When do you need to make payment for the Resale Levy?
The resale levy payable is determined at the point of booking of the second subsidised flat. The payment of resale levy is regardless of the type of ownership (i.e. joint-tenancy or tenancy-in-common) and the share of interest is the flat.
If you are buying your second subsidised flat or EC, you can either:
- Pay the resale levy immediately at the point of resale, i.e. when selling their subsidised flat or
- Defer the payment until they buy another flat from HDB. If they come under the previous resale levy policy and opt for this, an interest at the prevailing rate of 5% per annum will be charged.
The resale levy can be paid with either the sale proceeds and/or cash. HDB’s mortgage financing is not entended for the payment of resale levy
| Situation | Procedure |
If you have
|
|
If your have
|
You can choose to pay resale evy at the point:
The levy will be deducted from the sale proceeds if they choose to pay at the point of selling existing flat in the open market. |
If you have
|
The resale levy has to be paid in cash before they can take possession of your second subsidised flat |
Note: For payment of resale levy at the point of the resale transaction, the amount will be deducted from the sale proceeds. Any shortfall will have to be topped-up in cash. Otherwise, the resale levy must be fully paid in cash before you can take possession of your second subsidised flat or EC.
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