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Both6 min read

Selling your flat and the resale levy

What actually lands in your pocket when you sell, why the CPF refund is not cash, and when a levy is due on your next flat.

The sale price is not the money you walk away with. Three things come off it first, and one of the three is not a cost at all but still cannot be spent as cash.

  1. The outstanding loan

    Whatever is left on your housing loan is redeemed on completion, before anything else is paid out.

  2. The agent and the lawyer

    A seller's agent usually charges around 2% of the price. Conveyancing through HDB or a solicitor is a few hundred to a couple of thousand dollars.

  3. The CPF refund

    Every dollar of CPF you put into the flat goes back into your CPF Ordinary Account, together with the interest it would have earned had it stayed there. On a flat held for twenty years the accrued interest alone can run to tens of thousands.

    This money is still yours and can go straight into the next home. It is simply not cash, so it cannot cover a bank's cash-only share of a down payment. Your CPF statement shows the exact figure.

If the sale does not cover the loan and the CPF refund, you may have to make up the shortfall in cash. That is the risk of selling a flat that has not risen in value, especially early in the lease when most of your payments went on interest.

The resale levy

Housing subsidies are meant to be taken once. Sell a subsidised flat and later buy a second subsidised one, and a levy is due: $15,000 where the first flat was a 2-room, rising to $50,000 for an executive flat. It is a fixed amount, not a percentage, and it comes out of the sale proceeds. Buying a resale flat on the open market without a grant does not attract it.

Once you know what the sale leaves you, the upgrade tool works forward to what it buys on the private market, and the value tool prices the flat from comparable sales.

Source: HDB: resale levy.