Awesome! After years of waiting, finally you heard some news for key collection of you BTO (Built To Order). BUT, Your current HDB flat is not yet up in the market for sale. Can you still collect your keys? Here, we will be walking through various options to fund your BTO key collection so as to best facilitate you for a seamless transition.
Funding Your BTO Key Collection
By now, you should have already paid 10% or 25% down-payment depending on the type of loan you are getting when you signed the lease agreement few years back. The balance of the purchase price and resale levy (if applicable) have to be sufficiently funded by either cash, CPF, mortgage loan or a combination upon key collection before you can collect them.
Sufficient Cash, CPF and/or Mortgage Loan Amount For BTO Key Collection
Good news! If you have sufficient funds, including cash, CPF and/or mortgage loan amount to offset the balance of the purchase price and resale levy (if applicable), you can then comfortably collect the keys before selling your current house. You will have 6 months from the date of taking possession of your new home to dispose your existing one.
NOTE: If you are taking a second HDB Housing Loan, up to 50% of the CASH proceed from Current (or last owned) Flat is required to reduce the housing loan amount of your New Flat. Generally, second HDB loan flat buyers can keep the greater of $25,000 or 50% of the cash proceeds (including the cash deposit received).
Insufficient Funds for BTO Key Collection
What if you have insufficient funds to collect the keys? This is quite common for owners who need to utilise their current place’s sales proceed (CPF and/or Cash) for their new flat due to insufficient loan amount or that if they want to fully pay off the BTO. At instances like this, owners will have to sell first before they can collect the keys to their new flat. So how to go about it? We have depicted a few commonly used methods for you to easier plan your transition.
- Temporary Extension of Stay
- HDB Contra Payment Facility
- Temporary Loan Scheme
Temporary Extension of Stay
As straightforward as it sounds, seller can request for a temporary extension of stay of up to 3 months upon the completion of their sales. CPF Proceeds takes up to 2 to 3 weeks to be refunded back into owner’s CPF account which then can be utilised again for the new flat whereas cash proceed takes only around 3 to 5 days depending on how fast you bank in the cheque. Hence with the extension of 3 months, for example, you have a little more than 2 months for the renovation and shift to your new flat.
HDB Contra Payment Facility
If your current home is under HDB mortgage or fully paid, you may want to apply for the HDB Contra Payment Facility. However, a slight variation with the Enhanced Contra Facility for resale flats is that you must be using HDB mortgage loan for your new flat. If you are looking at fully paying off your new flat with the sales proceed from your current flat directly, then this option may not be suitable.
The sales proceeds from your current flat, together with the maximum HDB Loan Eligibility amount as well as your CPF account available funds must be sufficient to cover the outstanding amount of the purchase price and resale levy (if applicable), in order to be able to collect the keys to your new flat.
One benefit of using this facility, is that it allows you to collect your keys up to 4 weeks earlier for renovation works and shifting, before the completion and release of funds of your current place.
Temporary Loan Scheme For BTO Key Collection
Similar to that of using HDB Contra Payment facility, this method allows you to collect your keys earlier, whilst your sale of current home is underway.
If you are intending to fully pay off the new flat with the sales proceed from your current place, this may be one option for you.
However, due to the higher (non-concessionary) interest rate, this is not a preferred option. Unless you have no other ways and wish to collect the keys earlier, we wouldn’t suggest this option too.
To be eligible, you must fulfil the following conditions:
- Booked a new flat and the BTO keys are now ready for collection
- Submitted an application to sell the existing flat
- Have sufficient CPF / cash proceeds from the sale of the existing flat to fully redeem the temporary loan
Resale Levy For Second Subsidised Flat
If the new flat is your second subsidised flat, you must also take note on the resale levy payment method base on the first subsidised flat’s sale timeline.
If the first subsidised flat was disposed of after taking possession of the second subsidised flat, resale levy is deducted from the sale proceeds upon the sale of the first subsidised flat. Any shortfall will be paid in cash. If the first subsidised flat was disposed of before taking possession of the second subsidised flat, resale levy has to be paid in cash upon taking possession of the second subsidised flat.
Resale levy is applicable when you disposed of your subsidised flat, including BTOs, Sales Of Balance Units as well as resale flats bought with CPF Housing Grants, and purchase a second subsidised flat or Executive Condominium directly from developers.
Frequently Asked Questions
When is the right time to sell my place?
A good time to start marketing your current flat will be approximately 4 to 5 months prior to your estimated key collection date. This will allow you time to fetch the optimal selling price for your current place.
Will I end up without a place to stay?
With proper timing on the transition, this is never an issue for us, whereby clients are left stranded without a shelter.
Can I collect keys first if I have Insufficient funds?
The answer will be no. HDB requires the balance of the purchase price to be sufficiently funded through means of Cash, CPF and/or mortgage loan amount before releasing the keys to you.
What happens if I can’t sell my current place in time for the collection?
You may apply for Deferment of Key Collection as early as possible by contacting your officer-in-charge of your case.
HDB will assess various circumstances for each request to defer the key collection beyond the one month period.
But I don’t know how to plan the timeline?
If you are not confident in planning the timeline for the transition, it is best to seek your preferred real estate agent’s expertise. If you require our assistance or consultation, you may contact us too!
Final Thoughts
It is always advisable to work closely with your HDB officer-in-charge and your real estate agent. Updating your agent with any latest updates from HDB is a must so that he/she is aware of the situation.
At the same time, you must ensure that the renovation and shifting lead time is factor in when making timeline planning.
If properly planned, I’m sure your transition will be a smooth sailing one!
