HDBs make great first homes thanks to their affordable price tags and the fact that you can shave thousands of dollars off your purchase price with all the government grants in place. Then comes the age-old question: BTO or resale?
By now, you’ve probably read debates exploding across online forums or discussed the topic among your circle of friends. But given the amount of conflicting standpoints, narrowing down your choice isn’t as simple as one might think. If you’re overwhelmed by all the information, ask yourself these simple questions to help you land on the right choice.
1. Are you eligible?
Before moving on to the nitty-gritty questions, here’s a quick checklist to help you identify your eligibility for either a BTO or resale flat:
Source: HDB
A. Citizenship
The Singapore passport comes with a long list of perks, and having your pick of public housing is one of them. If you’re a Singapore citizen, you’re automatically eligible for both a BTO or resale flat.
You’ll be able to apply for a BTO flat with anyone who is a fellow citizen or Permanent Resident (PR).
Foreigners, on the other hand, can only apply for a BTO if they have received Permanent Residency status. They also require at least of of their co-applicants to be a Singapore Citizen. If a Permanent Resident wants to apply for a resale flat, their co-applicant has to be a PR too, at the very least.
In short, citizenship status plays a major role in determining whether you can go for a BTO or resale flat.
B. Age
While some of us would jump at the chance to move out of our family homes, the minimum applicant age for both BTO and resale flats is 21, unless you’re applying as a single, which will require you to be 35 years old. This age requirement is especially important for singles who may be eager to secure their own space earlier.
C. Income ceiling
BTOs and Sale of Balance Flats (SBF) are subsidised housing options that come with an income ceiling of up to $14,000. This means that the combined household income of all applicants shouldn’t exceed the stipulated amount.
Resale flats on the other hand, don’t have an income ceiling. So if you and your future home-buddy have been working for some time and have busted the BTO income ceiling, resale flats are a viable alternative.
In other words, if your household income has grown beyond the cap, resale flats may be your only HDB option.
2. Who can you apply with?
Image credit: MyNiceHome
A party of 2 or more spices up pretty much everything—even your home. Depending on which stage of life you’re at presently or who you’ll be sharing your little space with, either BTO or resale can be your winning choice.
A. Fiancé/Fiancée
Just before tying the knot, scouting for a good home could be your priority. It’s possible under the Fiancé/Fiancée Scheme, as long as you have officially registered your marriage.
Simply submit a photocopy of your marriage cert to your HDB branch within 3 months of the completion of the flat purchase.
You might want to add an extra 3 to 5 years to your timeline while you wait for your BTO flat to be completed. If you want to move in stat, then a resale flat would be a more immediate option.
However, you can also keep an eye out for Shorter Waiting Time (SWT) projects, which have expected completion timelines of less than 3 years. So if you’re flexible on location, these can be a good compromise between timing and cost.
Overall, your wedding timeline and housing timeline often go hand in hand, so it’s important to plan both carefully.
B. Other family members
Although not to the extent of your parents’ kampung days, living under one roof with your family is still quite possible. With the Public Scheme, you can apply for either a BTO or resale flat with any one of the following:
- Spouse and children
- Parents and siblings
- Children under your legal custody, care and control
While this scheme has its pros because many groups fit under the umbrella with few restrictions, you have to be dead certain about who you’ll be staying with.
This is because should you fall out with your housemate some time down the road, you won’t be able to change up the list of registered occupants or co-owners that easily. That’s why it’s important to think long-term before committing to a joint application.
C. Foreign spouses
For those whose partners aren’t citizens or PRs, the Non-Citizen Spouse Scheme is useful for Singapore citizens hunting for homes. But note that you may only apply for 2-room Flexis, a 2-room resale Prime flat, or any resale flat that’s unclassified, Plus, or Standard.
3. What kind of HDB grants can help you shave down your BTO or resale flat price?
To help you afford your very first home, there are a slew of CPF housing grants available. The amount you get depends on factors such as the household’s combined income, who you’re intending to live with and the location you’re hoping to live in.
Here’s a quick run-down of grants you can deduct from your hefty bill for both BTO and resale first-timers:
Source: HDB, MyNiceHome
A. Enhanced CPF Housing Grant (up to $120,000)
Whether you’re fresh-out-of-school or new to the workforce, you might be just beginning to accumulate those dollars in the bank. As long as you and your house-partner earn a joint monthly income of less than $9,000, you are eligible to receive varied grant amounts.
These are the grant amounts you can receive according to your income:
Image adapted from: HDB
Families with a lower income threshold will receive larger grant amounts. And here comes the best part: you can easily claim the Enhanced CPF Housing Grant whether you’re leaning towards BTO or resale flats.
B. CPF Housing Grant (up to $80,000)
Living with your family has its perks, and in this case it’s a deductible sum of up to $80,000 from the cost price of your flat.
Being eligible for the full family grant might be akin to hitting the jackpot if that 5-room flat you’re eyeing is over valuation, but you’ve got to make sure your total monthly income stays under $14,000.
C. Proximity Housing Grant (up to $30,000)
Good news, you can save on money and tears by applying for the Proximity Housing Grant.
This grant can slash up to $30,000 from your home loan if you’re intending to live with your parents in your new home, and up to $20,000 if you’re looking to purchase a nearby resale flat less than 4km from your parents’ home.
And unlike the previous schemes, you aren’t restricted by a fixed income ceiling.This makes it an attractive option for higher-income households who still want to stay close to family.
To know whether the distance qualifies, you can double check by using HDB’s handy distance enquiry tool.
4. Are you going to sell your home in a few years?
House flipping: a term that means buying a home at a low price and quickly reselling it for profit, is quickly becoming a new trend among BTO buyers. While there aren’t any rules to make this illegal, just make sure that you’ve fulfilled the Minimum Occupation Period (MOP) of five years before flippin’.
A BTO flat’s fresh 99-year leasehold status also helps you evade the problem of lease decay. Because of this, BTO flats often have stronger perceived resale value in their early years.
But if you’re just looking for a humble abode to stay in, opting for a resale flat isn’t the worst. Although it’s likely to have a lower price tag 5 years down the line because of its older age, this shouldn’t be a problem if you’ve decided to stay there for good.
Ultimately, your exit strategy, or lack thereof, should influence your choice.
5. How much would you need to spend on renovation for a BTO or resale flat?
Image credit: Stylemyspace
Contrary to what you’re used to hearing, renovating from scratch does not necessarily equate to higher costs.
A brand new BTO flat is generally more cost-efficient to renovate compared to a resale unit. In fact, renovation costs for resale flats can be up to 40% higher than those for new HDB flats.
This is largely because older units often come with dated layouts, finishes, and fittings that may not suit modern preferences. If the flat hasn’t been updated in the past 15 to 20 years, a full overhaul is usually needed, such as hacking existing carpentry and tiles to redoing bathrooms and kitchens for hygiene and practicality.
Source: Hackstagebuilders, tiling.sg, directplumber.sg, everyworks.com, sgelectrician.com
Other factors involved in your renovation:
A. Family size
The larger your tribe, the more you can expect to spend on reno for your new home, with some price variations. Assuming you’re applying for a 5-room flat, renovations would cost you about $67,000-$82,000 for a BTO and $84,000-$97,000 for a resale flat.
B. Home design concept
When you’re ogling those cool home magazine centrespreads, upping the aesthetics in your home might become a burning want. Whether you’re gunning for a rugged industrial pad or a wood-heavy Scandinavian home that will accommodate your soon-to-be-expanding family, your chosen interior type can have a great impact on your overall reno bill.
6. How important are amenities and location to you?
BTO launch sites generally come with their own cluster of amenities, from nearby MRT stations to the ever-needed supermarkets, which offer residents convenient amenities within their own estate. However, not all BTO estates are the same━some, like those in Tampines or Toa Payoh, are new entrants into mature neighbourhoods.
Others, such as the ones in Sembawang, are in areas that are less developed.
Resale flats, on the other hand, grant almost full leeway for your choice of residence as long as you find a willing seller. If location is your top priority, resale flats typically offer greater flexibility.
7. Can you afford to wait for a BTO flat?
Because everyone’s competing for the ‘best’ unit, the balloting process can be quite hit-or-miss.
Waiting times are also down to as little as 2 years for your building’s construction, compared to 4 to 5 years during the pandemic. That said, most BTO projects still require an average wait of about 3 to 5 years, depending on location and construction timelines.
You can even crunch this buffer period down further by applying for balance flats under the Sale of Balance Flats (SBF) exercise. These flats are typically closer to completion or already completed, making them a middle ground between BTO and resale. For those married with children, you can even sneak your way into the Priority Waitlist as HDB makes sure you get your home first.
But if any intermission period is a big no-no, resale might still be your best bet. There are virtually zero waiting times as long as you’ve sealed the deal with your home-seller and mutually agree on a date for your grand move-in.
Choosing between a BTO VS Resale flat
We hope this checklist helped to quell that endless debate in your head a little.
Ultimately, there is no one-size-fits-all answer, only what best suits your timeline, finances and long-term plans.
In summary, resale flats seem to be a better bet if you’d like to move in sooner, are pickier with your choice of neighbourhoods, or are simply not eligible for BTOs.
BTOs, on the other hand, reign in terms of affordability and possible capital appreciation. Plus, possible lower renovation costs.
Whether you’re hopping onto a new BTO chapter with your longtime beau or scouring a resale home, choosing the perfect home boils down to your desired preference. Happy house hunting!
Check out more of our articles:
- 6 must-know tips before heading to your rental viewings
- HDB rebates explained: How U-Save & S&CC payouts work
- What to do if a fire breaks out in your HDB or condo
Cover image adapted from: HDB, Darren Soh
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