Resale Levy

The resale levy is a charge imposed by the Housing & Development Board (HDB) when an owner sells a subsidised HDB flat and later purchases another subsidised HDB flat from the government. The levy ensures that housing subsidies are distributed fairly among households and prevents repeated use of subsidised housing benefits.

In practical terms, the levy applies when a household has previously bought a subsidised flat and then decides to purchase another subsidised flat, such as a Build-To-Order (BTO) flat or a Sale of Balance Flats (SBF) unit. The levy is paid either when the first flat is sold or when the second subsidised flat is purchased.

The amount of the levy depends on the flat type previously purchased and whether the earlier flat was bought before or after specific policy changes introduced in March 2006.

Why This Matters For Buyers And Sellers

For HDB Buyers

Buyers planning to upgrade from their first subsidised HDB flat to another subsidised flat must factor the resale levy into their financial planning. The levy can significantly increase the total cost of purchasing a second subsidised flat and may affect loan eligibility, cash flow planning, and upgrade decisions.

For HDB Sellers

Sellers who previously bought a subsidised flat may not pay the resale levy immediately when selling their flat if they are not buying another subsidised flat right away. However, the levy will still apply if they later decide to purchase another subsidised HDB flat. Understanding this obligation helps sellers evaluate whether upgrading to another subsidised flat or purchasing a resale flat without subsidy is financially more practical.

What This Looks Like In Real Life

The resale levy applies mainly to households who bought a subsidised HDB flat previously and later choose to purchase another subsidised flat from HDB.

For flats purchased on or after 3 March 2006, the resale levy is a fixed amount based on the flat type previously owned:

Flat Type Previously Owned	Resale Levy Amount
2-Room Flat	$15,000
3-Room Flat	$30,000
4-Room Flat	$40,000
5-Room Flat	$45,000
Executive Flat	$50,000

These amounts apply when the owner purchases another subsidised flat such as:

• A Build-To-Order (BTO) flat
• A Sale of Balance Flats (SBF) unit
• An Executive Condominium purchased directly from a developer with CPF housing grants

For example, if a household bought a 4-room BTO flat, lived in it for the Minimum Occupation Period (MOP), and later applied for another BTO flat, the household must pay a $40,000 resale levy.

The levy is typically deducted from the sales proceeds of the first flat or paid before completing the purchase of the next subsidised flat.

If the household sells the first subsidised flat and purchases a resale flat from the open market without CPF housing grants, the resale levy does not apply.

However, if the household later applies for another subsidised flat after buying a resale flat, the resale levy will still be payable at that time.

For flats purchased before 3 March 2006, the resale levy is calculated as a percentage of the resale price of the flat, rather than a fixed amount.

Flat Type	Levy Rate (For Older Flats)
2-Room Flat	10%
3-Room Flat	20%
4-Room Flat	22.5%
5-Room Flat	25%
Executive Flat	25%

This earlier system is less common today because most flats sold now were purchased after the fixed levy policy was introduced.

Common Misunderstandings And Mistakes

One common misunderstanding is that the resale levy applies whenever a person sells an HDB flat. In reality, the levy only applies when a household moves from one subsidised flat to another subsidised flat. Selling a subsidised flat and purchasing a resale flat from the open market without housing grants does not trigger the resale levy.

Another frequent mistake is assuming the resale levy must be paid immediately upon selling the first flat. In practice, the levy becomes payable only when purchasing another subsidised flat. If no second subsidised flat is purchased, the levy does not need to be paid.

There is also confusion about whether the resale levy depends on the resale price of the flat. For most modern HDB flats purchased after March 2006, the levy is a fixed amount determined solely by the flat type previously owned. The resale value of the flat does not affect the levy amount.

Households sometimes underestimate the financial impact of the levy when upgrading to another subsidised flat. Because the levy must be paid before the purchase is completed, it reduces the available funds that can be used for the next flat purchase.

Key Takeaways

The resale levy is a policy mechanism used by HDB to ensure that housing subsidies are distributed fairly among households in Singapore. It applies when a household sells a previously subsidised HDB flat and purchases another subsidised flat from the government.

For most modern flats purchased after March 2006, the resale levy is a fixed amount based on the type of flat previously owned. The levy ranges from $15,000 for a 2-room flat to $50,000 for an executive flat.

The levy does not apply when a household sells a subsidised flat and purchases a resale flat from the open market without CPF housing grants. However, the levy obligation remains if the household later decides to buy another subsidised flat.

Understanding how the resale levy works is essential when planning housing upgrades, calculating the total cost of purchasing a new subsidised flat, and evaluating whether a resale flat or another subsidised flat is the more financially suitable option.

Resale Levy FAQs