What is the HDB resale levy?
The HDB resale levy is a fixed sum that HDB requires flat owners to pay upon selling their first HDB flat or receiving the keys to their second HDB unit, whichever comes later.
The amount payable may differ depending on the flat type they previously owned. The levy is interest-free.
What is the purpose of the HDB resale levy?
The purpose of the resale levy is to ensure equal distribution of public subsidies between first-time buyers and existing homeowners who have already bought subsidised flats.
The levy also helps prioritise the allocation of grants to groups that need them the most, such as first-timer families looking to purchase an HDB flat to start and nurture their growing household.
Do I need to pay for an HDB resale levy?
If you purchase a subsidised housing unit and later decide to purchase a second subsidised flat, you will need to pay a resale levy.
A subsidised housing unit is defined as;
- A flat obtained from HDB
- A resale flat obtained with the CPF housing grant
- A Design Build and Sell Scheme (DBSS) flat purchased from a property developer
- An Executive Condominium (EC) unit bought from a property developer
- Or other types of housing subsidies, such as benefits obtained through the Selective En bloc Redevelopment Scheme (SERS) or privatisation of HUDC estate
However, if you do not have the intention to purchase a second subsidised flat from HDB, such as a resale flat or private residential property, you don’t need to pay the resale levy.
How much money do I need to spend on the HDB resale levy?
The resale levy amount depends on the type of subsidised flat you previously had and whether you used the singles grant. Note that the resale levy is always halved for those who bought their previous flat using the singles grant:
- 2-room flat: S$15,000 (S$7,500 if you used singles grant)
- 3-room flat: S$30,000 (S$15,000 if you used singles grant)
- 4-room flat: S$40,000 (S$20,000 if you used singles grant)
- 5-room flat: S$45,000 (S$22,500 if you used singles grant)
- Executive flat: S$50,000 (S$25,000 if you used singles grant)
- EC: S$55,000 (singles grant is not applicable for this type of property)
For instance, let’s say you previously bought a 3-room flat with subsidies, and are now upgrading to a new 5-room flat. You would have to pay a resale levy of S$30,000.
Note that the above rates have applied since 3rd March 2006. Before this date, the resale levy was quite different – it was previously based on a percentage of the resale price, or 90% of the valuation, whichever was lower. HDB removed the old system because it caused uncertainty in the resale levy amount.
For a closer look at the figures and how much you need to spend if you sell your HDB before the stipulated date, head over to the Housing and Development Board website here.
Does the HDB resale levy apply to senior citizens?
Starting in 2015, elderly second-time buyers who are interested in moving to a 2-room Flexi flat have been exempted by HDB from paying the interest accumulated on the resale levy.
When a 2-room Flexi flat with a shorter lease is purchased, the resale levy is adjusted and capped to account for the shorter lease. As a result, the highest resale levy payable for a 2-room Flexi flat with a 45-year lease is $18,000, much lower than the standard resale levy.
How do I pay for the HDB resale levy?
The resale levy amount is determined only when you secure your second subsidised unit
Payment for the levy can only be made in cash or through the sale proceeds of your first flat, as it cannot be paid using your home loan or CPF funds.
If you sell your first flat after receiving the keys to your second one, the resale levy will be deducted from the sale proceeds, and any outstanding balance must be settled in cash. However, if you sell your first flat before receiving the keys to the second subsidised unit, the resale levy needs to be paid in cash upon key collection.
Recommended article: Here’s why the resale levy shouldn’t be waived or reduced
