“My Brother Told Me About The HDB Upgrading Levy When I Want To Upgrade….”
“This Upgrading Levy, My Colleague Said It’s Only In Cash…”
4 out of 10 potential clients will ask me about the HDB upgrading levy.
How their sister or colleagues told them be careful of this levy when they upgrade.
Some of them even hear it from their parents.
The worst part is for them actually not finding out more about the truth.
The truth is there is no HDB upgrading levy.
It is simply a common urban legend, a myth, a mystery, you hear about it but you don’t see it. Like a ghost.
Then What HDB Levy Do I Have To Worry About?
There is no levy when you want to upgrade to a bigger HDB flat. It can be a Maisonette, a 5 room flat or any resale property or even a private condo.
There is no levy payable.
The HDB Resale levy that you have to worry about it when you want to buy another flat directly from HDB. It could be a BTO, a Sales of Balance Flats or an new Executive Condo.
The levy is to be paid in cash and depends on the type of HDB flat you bought the first time from HDB directly.
You can find more info when you google “HDB Resale Levy”
Is It Worth Buying Another BTO Flat?
On top of the purchase price of the BTO flat that you are thinking of buying you will need to put the levy amount on top of the price.
For example if you bought a 4 room BTO flat at $400k and your resale levy is $40k then final purchase price is $440k.
Since the BTO flat is 100% naked you will need to factor in renovation, say $50k.
Then your final purchase price would be $490k.
Is It Worth 8 Years Of My Time Waiting To Profit From This 2nd BTO Flat?
Of course it’s not only about the total price of this BTO flat that you will have to consider if it’s actually worth buying.
You’ll need another 3 years to wait for it to be built and another 5 years before you can sell it off.
How much can your 4 room HDB flat, that you spent $490k on, will sell for 8 years later?
Make Your Next Move Worth It
It’s just unfortunate that our retirement is closely related to our property choices we make in our 30s.
You will be using almost all of your CPF to pay off your property.
You will depend entirely on your CPF for your retirement when you are unable to work and employers are unwilling to employ seniors.
Your next choice of property must take into consideration rising future costs and how independent you would want to be from your children.
And for the sake of this article, there is no such thing as a HDB Upgrading Levy. It’s a mystery.