Everything You Need to Know About BTO Flats to Get Ready for Home Ownership
Like stock picking or horse racing, having access to insider’s knowledge can put you ahead of the game. It can be the same for Build-To-Order flat applications, except the game revolves around your readiness to own a home. Once you know everything there is to know about the process and what goes on behind the scenes, you will be in a better position to make a judgement call.
Virgin BTO applicants, let these nine tips, hints and fun facts be your insider’s knowledge.
BTO flats are already subsidised
To ensure home ownership remains within grasp for first-timers, prices of BTO flats have been made independent of market forces, which explains why they are significantly cheaper than their resale counterparts. And then you have a wide array of housing grants to further lower the cost. But did you know that even without the grants, BTO flats are already subsidised? As a matter of fact, at HDB’s expense, the price that you are purchasing at is below the cost of developing the housing project.
Housing grants and subsidies galore
Speaking of housing grants, first-time applicants of BTO flats can qualify for up to S$80,000 in both Additional Housing Grant (AHG) and Special Housing Grant (SHG) depending on average monthly household income. Let’s say a new couple earning an average of S$4,200 per month is looking at a 4-room flat at Valley [email protected], a BTO project launched back in August 2016. The cost of one flat is S$275,000. The couple would be eligible for S$10,000 in AHG and S$40,000 in SHG, reducing the cost to about S$225,000.
These are just two of the many grants you could be applying for. We have a comprehensive guide on CPF housing grants available to Singaporeans, check it out to see which ones can stack on to your AHG and SHG.
This is the one big bummer of BTOs. As they are built according to the demand rather than in advance, they are not readily available however badly you want more space to, well, make babies. The completion time for each BTO launch varies but if past launches are any indication, expect to wait about three to four years after you sign the agreement for lease. The balloting and flat booking process before that would have taken about six months, so your real waiting time stretches a little longer than those three to four years.
BTO launch locations
While it is true that a good number of BTO projects have been set up in non-mature estates (e.g. Sembawang, Bukit Panjang), they are also spread across mature towns. Bidadari at Toa Payoh really takes the cake here, and you can probably see for yourself it is a lot more difficult to score a unit in the sea of demand. That is not to say non-mature town developments will be any easier; when Punggol Waterway Terraces was first launched, there were 13 applicants to each unit.
Each quarter, HDB will release three to four BTO projects in different estates. As you don’t have many choices to work with, make the best of the situation by keeping a look out for Sale of Balance Flats (SBF). There might be hidden gems for all you know. SBFs are unsold units of previous launches and announcements don’t occur as regularly.
New design features
As part of the Universal Design feature, new BTO flats are outfitted with a ramp at the main entrance, wider internal corridors and wheelchair-accessible bathroom, among others. You can also find some of the more exotic block features at premium BTO developments, such as garden terraces, sky corridors, front porches and appointed communal hangout spaces.
If you aren’t too fussy about the interior design, opt-in on the Optional Component Scheme. For an add-on cost (still cheaper than engaging your own interior designer), you can have your new flat ready with sanitary fittings and internal doors, floor finishes and kitchen partition wall.
If BTOs had one ethos, it’s affordability. Income ceiling is one criterion that has been put in place to ensure fair competition. For 4-room flats, applicants cannot be earning more than an average monthly household income of S$12,000 or S$18,000 if applying with extended family. The same applies to 3-room flats in mature estates, and S$6,000 for certain projects in non-mature estates.
Singles can apply too
Well, don’t be popping the champagne just yet. The revised rules merely entitle you to 2-room flexi units in non-mature estates. Then again, singles don’t really need all that much room, right? According to the priority scheme, 50% of BTO flats in non-mature estates are reserved for distribution to singles.
You can subsidise the cost of your 2-room dream home using the AHG and SHG.
Ever wanted to know what your chances are like exactly when you ballot for a new BTO launch? For one, it is not a level playing field; those deemed more in need of a flat will be given priority, hence the myriad of priority schemes. You can check out the full list here. Those ‘needs’ could be based on family type, presence of kids, number of kids and number of previous applications.
Don’t feel too discouraged if you find yourself on a streak of rejection, because you earn an additional ballot chance per unsuccessful application. In other words, those without much of a beginner’s luck will find higher probability of success compared to first time applicants (two chances) and second timers (one chance).
Ease the initial payment with Staggered Downpayment Scheme
After weeks of gruelling internal debate as to whether you should finance your BTO with an HDB or bank loan, you finally came to a decision. Kudos! Either way, you can choose to split the down payment over two instalments if things are a little tight in the CPF OA. For instance, if you had gone for the maximum of 90% HDB concessionary loan, you can put down just 5% during the signing of a lease agreement and the rest of key collection.