In Q4 2023, HDB resale prices grew for the 15th consecutive quarter in a row. This may make you more excited about selling your HDB flat, especially if you’ve been considering it for a while.
Before selling your HDB flat, do note that there are hidden costs that come with the process. The dollar amounts for each cost can vary, depending on how much knowledge you have going into it.
Need help to sell your HDB flat in 2024? We have all the tools to help you from start to finish.
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One major hidden cost of selling your HDB flat: cash over valuation (COV). Tl;dr, you incur COV on your HDB flat if the agreed sale price is higher than HDB’s valuation of your home.
What Is COV for HDB Resale Flats? (2024)
While you can’t find HDB’s official valuation of your home before you agree on a selling price, you can make an educated estimate of how much your HDB might be valued using our free property valuation tool – based on the latest asking prices of PropertyGuru listings in the same area.
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That said, let’s explore six other major hidden costs of selling your HDB flat in 2024.
Hidden Costs of Selling Your HDB Flat (2024)
| Property agent commission | The fee payable upon sale of the property |
| Outstanding home loan | The mortgage needs to be fully paid before selling your flat, early redemption fee might also be payable |
| HDB lawyer fees / HDB legal fees | The HDB legal fee you pay to engage an HDB lawyer to transfer the property title from you (seller) to your buyer |
| HDB conveyance fees | Another name for HDB Lawyer Fee/ HDB Legal Fee |
| CPF savings plus accrued interest | How much you need to pay back to your CPF account, including CPF grants and interest you would have earned |
| Service and Conservancy Charges (S&CC) | The maintenance fee is payable till the resale is complete |
Let’s go through each hidden cost of selling your HDB flat in detail.
1. Property Agent Commission
Property agent commissions for selling your HDB flat are typically 2% of the transacted price. Buyers usually pay their property agent about 1% commission. However, there’s no fixed rate on how much you need to pay your agent; it’s up for negotiation.
Is it worth paying your property agent a commission? Well, your property agent plays a crucial role in facilitating the sale of your HDB flat. They may even offer marketing, negotiations, and legal documentation services.
Always engage a reputable and licensed agent who is well-versed in HDB regulations and possesses a thorough understanding of the local property market. Better yet if they have a record of securing good deals in properties similar to the one you wish to sell.
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2. Outstanding Home Loan
Another hidden cost of selling your HDB flat is the need to pay off in full your outstanding home loan.
This means you need to repay the remaining balance of your home loan, whether it’s to HDB or the bank. If you have a bank loan, there might also be additional hidden costs such as an early redemption fee.
Therefore, do carefully assess your financial obligations and plan accordingly to ensure a smooth transition during the sale process. If needed, you can also consider a bridging loan, a short-term loan that you can take from the bank that ‘bridges’ the gap between the time you need to pay the downpayment for your new property and when you receive the sales proceeds from your previous property.
Need a bridging loan? Reach out to PropertyGuru Finance Mortgage Experts today.
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3. HDB Lawyer Fee
Don’t forget the HDB lawyer fee, also known as the HDB legal fee as a hidden cost of selling your HDB flat! It is a must for sellers to engage the services of either an HDB solicitor or your lawyer to handle the legal aspects of the property transfer process.
The lawyer comes in after HDB has received the resale application from both you (the seller) and the buyer. When you are asked to endorse the resale documents via the HDB Resale Portal, you’ll also need to pay the HDB legal fee.
The lawyer needs to draft and review legal documents and make sure all the paperwork is to eventually facilitate the transfer of ownership from yourself (seller) to the new owner (buyer).
It is important to budget ahead for this cost, and you can get a quick estimate of the HDB lawyer fee via the HDB Legal Fees Enquiry Facility.
For example, for a 3-room HDB flat at the HDB transaction price of $650,000 (mature estate), the HDB legal fees payable are:
- For Acting in Sale: $330.00 (Inclusive of GST)
- For Discharge of HDB Loan: $48.00 (Inclusive of GST)
- Total HDB Legal Fee Payable: $378.00 (Inclusive of GST)
The figures above are only an estimate and do not include stamp fees, registration fees and other disbursements.
4. HDB Conveyance Fee
The HDB conveyance fee is essentially the same as the HDB lawyer fee/HDB legal fee. Conveyance means “the legal process of transferring property from one owner to another”.
For those new to such jargon, when someone says HDB lawyer fee, HDB legal fee, or HDB conveyance fee, these all mean the same thing.
5. CPF Savings Plus Accrued Interest
As most of us here in Singapore use our CPF Ordinary Account savings to buy our HDB flat, we’ll also need to return the CPF funds we used to our own CPF account when we sell our HDB flat.
These CPF savings must be returned in full, in addition to the CPF grant money, as well as accrued interest. While not the actual monetary amount that was disbursed out, these accrued savings are how much you would have earned in interest (2.5% p.a.) if you did not withdraw your CPF savings to pay for the flat.
6. S&CC Fees
While not really a hidden cost of selling your HDB flat per se, just know that you’ll need to pay in full the Service and Conservancy Charges (S&CC) up till the resale process is completed for your property. S&CC are maintenance fees, which go towards the upkeep of common areas and facilities within HDB estates (think block washing, greenery pruning, elevator repair and so on).
Other Hidden Costs of Selling HDB Flat
Beyond the above-hidden costs of selling your HDB flat, there are still more to take note of. For instance, do factor into your HDB resales price or HDB transaction price the HDB resale application fees, and administrative fees that both seller and buyer need to pay to HDB.
Property Tax
A word about HDB property tax… Starting from January 2025 (that’s just next year!), adjustments to property tax Annual Value (AV) bands will be implemented, as stated in the Singapore Budget 2024 statement.
The adjustment aims to ensure that property tax remains fair and reflective of the current market conditions and to maintain a balanced and equitable tax system while accommodating changes in property values over time. AV bands serve as a basis for calculating property tax; properties within higher AV bands are generally subject to higher tax rates.
For HDB sellers, this means you need to pay the full year’s tax by 31 January 2025 before you sell your flat.
HDB Resale Levy
Those who purchased the HDB flat with subsidies may be subject to a resale levy that will be factored into your HDB resale price. Regulated by HDB, the resale levy is what you’ll need to pay when you sell your current subsidised HDB flat to buy another subsidised HDB flat.
The resale levy is deducted from the proceeds of your sale, and any deficit must be settled in cash. If you sell your flat before acquiring a new one, you’ll be required to pay the resale levy in cash before gaining possession of your subsequent flat.
Take into account HDB upgrading costs. If you have outstanding payments for upgrading programmes undertaken by HDB within the estate, such as the Home Improvement Program (HIP) or the Lift Upgrading Program (LUP), potential sellers may need to pay these up in full before selling your flat.
Seller’s Stamp Duty
Finally, sellers who have owned their HDB flat for less than three years may be subject to Seller’s Stamp Duty (SSD). This tax was imposed in 2010 by the Inland Revenue Authority of Singapore as a cooling measure to stop homeowners from flipping their properties for profit – which could drive both HDB resales price or HDB transaction price and demand up, detrimental to the market.
Want to Sell Your HDB Flat in 2024?
In January 2024, Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru commented that while high HDB resale prices “is good news for sellers, it may pose a headache for the next property they are looking to buy. They’ll also need to compete in the HDB resale market as a buyer, or opt for a private property instead.”
Become a more informed property seller in 2024: read all our Guides content on selling, upgrading, and investing.
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