How to upgrade your HDB to a Private Condo

Updated: Jul 11, 2020

Since 2012, home ownership in Singapore has risen to more than 90% and it is considered to be one of the highest in the world. This rise is largely attributed by the continuous efforts from HDB’s public housing scheme since its establishment in 1960. Likewise, we have also witnessed the gradual increase in number of private properties home ownerships over the years, gaining much popularity especially among many younger generations today.

Throughout my humble years of real estate work, I have encountered a few of my clients who have overestimated the upgrading process and how much it might take to sell their HDB and purchase a private property as their second home. Instead, this process can be surprisingly manageable with the proper planning and prudent affordability checks in place.

Upgrade HDB to Condo
Photo: Pinnacle @ Duxton

Am I ready or am I not?

Meeting your Minimum Occupation Period (MOP)

Before you can sell your HDB flat off to a potential buyer, you will need to fulfil the Minimum Occupation Period (MOP).

Home owners who have bought a Build-to-Order (BTO), Resale HDB or Executive Condominium (EC) will need to observe a five year Minimum Occupation Period (MOP). This means that home owners are required to physically occupy their homes for five years before they can sell or sublet/rent it out in the open market.

HDB’s primary reason of implementing the Minimum Occupation Period (MOP) is to avoid any short term speculation when buying public housing for own stay.

There is no Minimum Occupation Period (MOP) for owning any private properties in Singapore.

"I have met the Minimum Occupation Period (MOP). What’s next?"

Sales Proceeds from HDB:

You will need to make an estimated calculation of your sales proceeds, minus off any outstanding loan, total amount of CPF (plus accrued interest) to be refunded and other related expenses incurred for the sale of your HDB to determine your affordability on the next purchase.

Loan to Value Savings

Coupled with any cash savings on hand, the cash proceeds from the sale will then be used mostly for the downpayment of the next private property.

The good news is that most CPF monies refunded to Ordinary Account can be withdrawn again for use on next property purchase if all minimum requirements are met.

CPF monies can also be used to finance your monthly mortgage payments to the banks.

You can access your CPF account by login with your Singpass at

Minimum Cash Downpayment:

The total downpayment for private properties is at 25%, of which a minimum cash of 5% is required in order to exercise the Option to Purchase (OTP) and the remaining can be top up using CPF funds.

Loan to Value:

Private properties in Singapore can only be financed through bank loans. The maximum loan to value (LTV) is capped at 75% of the property price for first time borrowers. Also, you will have to calculate the Total Debt Servicing Ratio (TDSR) based on your monthly gross income for the total loan amount you are eligible for.

TDSR ensures that your monthly expenditure does not exceed 60% of your monthly gross income. These include any outstanding debts on loans, credit card balances or other outstanding housing loans.

Total Debt Servicing Ratio is applicable for both locals and foreigners purchasing a private property in Singapore.

Monthly Mortgage Installments Interest

*HDB concessionary loans are not applicable for private property purchases. This includes Executive Condominiums (ECs).

The interest for HDB concessionary loan is pegged at 0.1% above the prevailing CPF interest rate.

Buyer’s Stamp Duty:

For first time buyers, they are subjected to a Buyer’s Stamp Duty (BSD) payable to IRAS upon the property purchase. The calculation for BSD is highlighted below:

First $180,000 1%

Next $180,000 2%

Next $640,000 3%

Remaining Amount 4%

BSD can be financed by either using cash or CPF (if applicable).

Refer to IRAS’ website - for more information on Buyer’s Stamp Duty.

Additional Buyer’s Stamp Duty:

For most cases, Additional Buyer’s Stamp Duty (ABSD) is not applicable if you sell the HDB before purchasing a private property.

As from 6 July 2018 onwards, ABSD of 12% will be payable should you decide to keep your HDB and purchase a second private property for own stay or investment. This is paid upon signing the Option to Purchase for the second private property.

On some occasions, I have met HDB owners who prefer to purchase their matrimonial private property first, before selling their HDB within 6 months time.

In such cases, they can apply for ABSD remission that is only applicable for married couples buying their next private property under both their names.

Legal or Conveyancing Fees:

You will need to appoint a legal firm to execute and manage the legal process of your private property purchase. The typical legal charges can averagely range from $2500 onwards for managing a private property purchase.

Legal or conveyancing costs can also be covered using your CPF money if applicable.

Agent’s Commission:

For most cases, buyers for private property purchases do not need to fork out any extra cash to pay the agent’s commissions.

This is good news for private property buyers as these commissions are usually paid by the sellers or developers if it’s a new project launch sale.

An Example: Estimated cost to set aside for $1 million private property purchase

· S$50,000 in cash (minimum 5%)

· S$200,000 in CPF (20% of purchase price)

· S$24,600 for BSD

· S$120,000 in ABSD (remissible under some conditions – refer above)

· S$2,500 for legal fees

· Maximum Loan to Value S$750,000 (75% of property valuation)

Is holding on to my HDB a good idea?

It is important to note that all HDBs are 99 years leasehold. What does this mean?

During a Parliamentary sitting back in 2014, our then Minister of National Development - Mr Khaw Boon Wan mentioned that all HDBs shall revert back to the government at the end of 99 years leasehold. It was further emphasised by our current Minister of National Development – Mr Lawrence Wong, when he spoke that not all HDBs will be eligible for the Selective En bloc Redevelopment Scheme (SERs) before their 99 years leasehold runs up.

sell 1 buy 2

Technically, there will be a potential decrease in your HDB flat’s value as it ages before it ultimately depreciates to zero when it reaches the end of the 99 years leasehold period.

Private properties can come in the form of 99 years or 999 years leasehold and freehold.

What are the considerations?

A property purchase is one of the priciest investment and important decisions for most Singaporeans. Upgrading to condo may not be suitable for everyone. It can be financially difficult and stressful when wrong or hasty decisions are made.

Prudent planning and accessing your financial capability helps determine if you are ready for an upgrade to condo once your HDB reaches the MOP. There is also the flexibility of using a single name for purchase of any private property.

This means that a couple can have the option to buy two separate private properties, each under their own names (example: one for own stay and the other for investment) if they are both financially capable.

Besides, you will also have to determine your own needs and wants for an upgrade to condo, such as gaining proximity to parents or schools, usage of condo’s facilities, ease of accessibility, location and other investment risks etc.

how to buy condo


In conclusion, there is no best or right time as to when you should do an upgrade after the minimum occupation period. Very often, I would advise anyone who wished to sell their HDB and upgrade to a condo to do so early, and as young as possible. They are also encouraged to have kept adequate savings for unexpected events such as job loss, pay cuts or economic changes.

Property Wealth Planning

Thank you for reading this article!

Since 2009, I have actively been transacting private properties in the prime districts and East Coast while building my team of managers and associates.

​I have assisted many of my clients with their property wealth planning needs.

People who have worked with me know me as a driven, reliable and trustworthy person who takes care of the people around me.

Feel free to drop me a Whatsapp message ​for a non-obligatory discussion on your property wealth planning needs!

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