Here collects the various costs related to a property transaction incl. solicitor's charge, agent fee and stamp duty etc.
1. Solicitor's charge
A conveyancing lawyer is responsible for doing all the relevant searches on the title deed to ensure that the seller does not owe any debt and to check to see if there is a road reserve on the property which may affect the value of the property. If the buyer is taking out a bank loan or CPF, the lawyer also ensures that the relevant documents are ready. The lawyer's role ends when the title deed is handed over to the buyer. For uncompleted properties, it could take up to 3 yrs. Resale transactions, however, are usually completed within 3 or 4 months.
The Law Society of Singapore recommends the following fee guidelines for the solicitors' remuneration.
For non-CPF conveyancing transactions:
- Purchaser's solicitor: 0.3% of the purchase price subject to min. fee of $1800
- Mortgagor's solicitor: 0.15% of the total loan subject to min. fee of $900
- Mortgagee's solicitor: 0.3% of the total loan subject to min. fee of $1800
- Where the same solicitor acts for purchase, mortgagor & mortgagee: 0.4% of the purchase price subject to min. fee of $2500
For CPF conveyancing transactions (first application to CPF board for withdrawal):
- Up to $750K: chargeable by CPF solicitor $900 and by member's solicitor $450 if the solicitors are from different law firms; otherwise $500.
- Over $750K up to $1.5m: the above are $1250, $625 and $500 respectively.
- No further charge for member's revising the withdrawal sum where CPF moneys have not been released or within 6 months after such release
The solicitor usually charges disbursements that easily accounts 4-digit:
- Various searches (normally mandated by the bank offering the loan), sometimes range from $700 up to $1000
- stamp fee for the deed assignment (for the loan), $500+
- registration fees on transfer & caveat (normally 3 sets @ $64.45 for the bank, CPF and yourself), typically some $350
- photocopying, transport and other incidentals, depending on the individual solicitor, e.g. $100 ?
Note the bank offering mortgage usually subsidies the legal cost at some 0.4% of the loan amount, subject to fulfilling the min. period of loan facility (e.g. 3 yrs).
2. Agent fees
Institute of Estate Agents stipulates the professional fee / commission for agents / agencies based on standard services and upon successful transaction, but it does not interfere with any private arrangements:
- Sale of all types of properties except HDB resale flats: 2% of contracted price for vendor as sales commission and 1% of contracted price as finder's fee (if the agency is the appointed representative).
- Sale of HDB resale flats: 2% and 1% of contracted price for vendor as sales commission and purchaser as service fee
- An agency shall not accept commission from both the Vendor and Purchaser in the same transaction.
- Commission is due immediately upon completion of sale and purchase
It is the market practice that housing agent only charges the vendor 2% commission in case of condo or landed property sales, and charges both vendor and purchaser in case of HDB resale flat but the commission rate is often negotiable within the above guidelines.
Some agencies (e.g. ERA) provide extra services such as 6 months guarantee and bridge loan if both a client both buys and sells through the same agent.
HDB has over the years simplified and streamlined its resale procedures and made resale information more readily available to the public. It is not a requirement that resale HDB flat transactions must be facilitated by agents. However, HDB encourages to engage accredited SAEA members should one decide to use the agent's service: he will get priority over others with non SAEA-member agents when selecting the first appointment date.
3. Stamp duty
Stamp duty is a tax on commercial and legal documents which record and give effect to certain transactions. Since 28/02/1998, it is payable only on documents relating to immovable property, stocks and shares. These include a sale or mortgage or lease of immovable property.
Use the following conveyance formula (w.e.f. 29/02/1996) on purchase price round-up to the next nearest hundred dollars:
- 1% on the first $180,000
- 2% on the next $180,000
- 3% on the balance amount
or for simplicity, 3% of purchase price - $5,400 when it is more than $360K.
4. Property tax
Property tax payable per year is computed based on tax rate of the Annual Value of the property. For owner-occupied residential building, the property tax rate is 4%. For properties other than owner-occupied residential buildings, property tax rate is 10%.
Annual Value is the estimated yearly rent the property can fetch if it were rented out. The Chief Assessor will determine the AV of the property by analysing rents of comparable properties and relevant data. It is determined regardless of whether the property is let, wholly owner-occupied or vacant.
