In case you haven’t heard, BTO buyers are facing up to a year or more in construction delays because of the manpower shortage caused by tighter border restrictions caused by the COVID-19 pandemic.
If you’re an affected buyer, this could be extremely worrying for you, especially if your plans to start a family have been hindered by this news.
The good news is that the Government has recently announced that you can appeal to cancel your BTO application without incurring any penalties, but only if you have an urgent need for a home.
If this affects you and you want to know how to cancel your BTO flat application, read on.
How to Cancel Your BTO Application
As mentioned above, if your BTO flat project is delayed and you want to cancel your application without incurring any penalty charges, you can make an appeal on HDB’s site via MyRequest@HDB. The HDB will evaluate your case based on your circumstance.
Want to cancel your application for other reasons instead? Depending on which stage of the BTO application you’re at, you may need to forfeit the option fee or/and downpayment for the flat:
If You Have Not Selected Your Flat:
If you’re cancelling your application before you’ve selected your flat (i.e., before you’ve paid the option fee), then you don’t have to pay any penalty (bar the $10 administrative fee).
However, if you cancel your flat application for the second time, you would have your first-timer priority suspended for a year. In other words, you won’t get 2X the ballot chances for a year.
If You Have Booked a Flat but Have Not Signed the Agreement for Lease Form:
You will need to forfeit the option fee. How much your option fee (and hence the penalty) is depends on your flat type.
4-room and bigger
Additionally, you have to wait a year before you can apply for a new HDB flat, DBSS flat or executive condominium (EC) from a developer, a resale flat with CPF Housing Grant, a resale flat that’s been selected for SERS, or take over a subsidised flat via outright transfer.
After you’ve signed the Agreement for Lease Form:
If you want to back out from your BTO flat application after signing the Agreement for Lease form (but before key collection), you would need to complete the cancellation after signing of agreement for lease form and submit to HDB.
On top of that, you will also need to forfeit the downpayment of the flat. However, you can try to appeal to IRAS to refund the stamp duty paid by engaging help from the HDB or your lawyer.
Similarly, you have to wait a year before you can apply for a new HDB flat, a DBSS flat or EC from a developer, a resale flat with CPF Housing Grant, a resale flat that has been announced for SERS, or take over a subsidised flat via outright transfer.
On top of the penalties mentioned above, if you had taken any grants, you would also need to refund them (with interest).
Cancelling a BTO flat application can be costly and could amount to thousands of dollars, so before signing the dotted line, it’s good to be clear on what you want.
Need a Home Urgently? Here are Your Options:
Apply for Temporary Housing Under the Parenthood Provisional Housing Scheme (PPHS)
Under this scheme, married couples or families can rent an interim flat at a subsidised price from the HDB. Rents start from $400 a month for a 2-room flat in Marsiling and up to $1,500 for a 4-room flat in Tiong Bahru. You can view the full rental rates and eligibility conditions here.
Aside from the monthly rental, you would also need to pay 1-month deposit and stamp duties.
PPHS exercises happen once every two months, but will happen from the first to the 14th of the month from October 2021 onwards. You can submit your application via the MyHDBPage. If successful, you’ll be invited for a flat selection the following month.
However, demand for PPHS flats is high; there were 2,350 applications in 2020 but just 160 flats available. Although the Government has recently announced that it has allocated 800 additional flats to help families.
Rent a Home
If you need an interim place to stay while waiting for the completion of your BTO flat, or after cancelling your BTO flat application, you can choose to rent a home.
Renting is a good short-term solution if you need a place to stay immediately; there’s less financial burden compared to buying a home and you also don’t have to worry about renovation or buying new furniture since most homes are in move-in ready condition.
From HDB flats to private condos, there’s also a wide range of properties to rent, and you can choose to rent anywhere across the country. Furthermore, renting is more flexible than buying as you’re not tied down by a mortgage and can move into another home when your contract ends.
However, rental isn’t cheap in Singapore; expect to pay at least $1,500 for a 2-room flat, $2,000 for a 3-room flat, and $2,700 for a 4-room flat and above. For private condos, a studio apartment starts from $1,200 per month and prices just go higher the bigger the condo.
If you’re considering renting, check out available homes for rent on PropertyGuru now.
Buy a Resale Flat
BTO construction delays due to the COVID-19 pandemic and desire for bigger homes have seen a resurgence of interest for resale flats. In fact, the increased popularity of resale flats has pushed prices up for the fifth straight quarter in Q2 2021 since the end of the Circuit Breaker period.
The good thing about buying a resale flat is that you can pretty much buy in any location and pick the type of flat you want, provided that you meet the HDB’s eligibility conditions. You’re also eligible for higher CPF Housing Grants compared to BTO flats, and don’t have to wait for your flat to be completed if you need to move into a home urgently.
However, resale flats tend to be more expensive than BTO flats, and with cash over valuation (COV) on the rise, expect to pay a higher premium for your choice flat, especially if it’s a bigger flat or one that’s located in a good area.
Also, if the flat’s remaining lease is less than 20 years and isn’t enough to cover the youngest buyer until the age of 95 years old, the amount of CPF and loan you can use or receive will be limited. Last but not least, higher price means you’ll also have to fork out a higher downpayment and since there’s no Staggered Downpayment Scheme like for BTO flats, you need to fork out more funds in one go when you sign the lease.
Looking for a resale HDB flat? Find one for sale on PropertyGuru.
Apply for a Sale of Balance Flat (SBF)
SBFs are unsold flats from previous BTO exercises that are subsidised by the Government, so they’re more affordable than resale flats (though slightly more expensive than BTO flats). SBFs are launched along with BTO flat exercises, typically in May and November and they come with fresh 99-year leases.
As they’re ‘leftover’ flats from previous BTO sale exercises, these flats have either already started construction, or have been built, which means the waiting time is also shorter. SBF launches are spread across mature and non-mature estates, so it helps if you have a particular estate that you want to live in. You’ll also be eligible for CPF Housing Grants including the Enhanced CPF Housing Grant (EHG).
While the waiting time is much faster than getting a BTO flat (you can move in within three months, depending on the flat’s construction stage), it’s still slightly slower compared to a resale flat, which can be as fast as two months. Also, they’re fewer flats up for selection during launches, which means it’s harder to secure a flat.
However, you can’t apply for an SBF and BTO flat at the same time, which means that you can only apply for an SBF after cancelling your BTO flat application.
So, Which Option Should You Go For?
If you need a house urgently, and plan to get your own home, go for a resale flat. You don’t have to worry about delaying your plans to start a family and there’s also a wider pool of flats available in different locations. Furthermore, resale flat buyers are eligible for more grants, which helps to soften the blow. Alternatively, you may also consider applying for SBF if you want a newer flat in a particular estate, but know that you can only apply for one after canceling your BTO flat application.
If you’re on a tight budget and decide to wait for the completion of your BTO flat, you may consider applying for a flat under the PPHS. PPHS flat is more affordable compared to renting, but be prepared to face more competition.
If you’re in an urgent need to get a home, not on a tight budget, and need a place to stay in the interim, consider renting a property. Renting provides more flexibility and convenience in terms of choosing a home that’s closer to your workplace, parents’ home, schools, etc. Though, it’s more expensive in the long run.
Other FAQs on Cancelling BTO Application
What Will Happen if I Cancel My BTO?
Depending on which stage of the application you’re at, it can be as minor as forfeiting a $10 admin fee, to as heavy as the downpayment for the flat.
Can I Cancel My BTO Application?
Yes, you can cancel your BTO application on HDB’s site via MyRequest@HDB.
Can I Apply for BTO Again?
Yes you can. However, you would need to pay a resale levy. If you’re a second-timer applying with a first-timer, you may still get first-timer benefits (e.g. 2X ballot chances).
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This article was written by Victor Kang, Digital Content Specialist at PropertyGuru. When he’s not busy churning out engaging property content* or newsletter copies, he’s busy being a lover of all geeky things. Say hi at: email@example.com
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