Progressive Payment Schedule for Buildings Under Construction (BUC)

One of the advantages of buying new projects is that the payment is spread out progressively, in accordance to milestones tied to different stages of the construction process. This translates to significantly lower monthly instalments payments for the buyer especially at the start, and progressively builds up to the full loaned amount upon completion of the project, which is usually around 3 years upon start of construction.

The similarity between purchasing a resale property and a new project launch lies in the requirement that the maximum loan one can take is 75%. Of the remaining 25%, a minimum of 5% has to be paid by cash while the remaining 20% may be paid by either cash or CPF.

Stamp duties include buyers’ stamp duty and additional buyers’ stamp duty (ABSD), with the latter being applicable only for purchase of a second residential property. These apply on all purchase of residential properties, both resale and new launches. However, the stamp duties for resale properties have to be paid by cash, whereas that for new project launches can be paid by cash or CPF.

Below is a timeline of the progressive payment schedule for BUC.

As seen from the above timeline, a buyer who purchases a condominium unit at launch will only start paying monthly instalments around 6 – 9 months later, when foundation work is completed. Since only 5% of the purchase price is payable and disbursed by the bank to the developer, the buyer will only have to pay less than $500 per month at this point for a unit priced at $2 million with an interest rate of 4% and a loan tenure of 30 months.

Bear in mind that if you commit to the purchase post-launch when certain milestones are already being met, your monthly instalment will encompass the payment for all stages of completion that has already being met. In that case, you will start paying for your monthly instalment after the Sales & Purchase (S&P) Agreement has been signed.

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