BTO Cancellation After Break-Up: Process, Penalties & Consequences

In Singapore, applying for a Build-to-Order (BTO) flat has become a common step for many couples looking to own their first or starter property, largely due to its general affordability and status as a more accessible housing option. Unfortunately, some relationships may end after applying for a BTO unit.

This article explores the implications of breaking up after applying for a BTO flat and outlines the process for cancellation. In this article, the following issues will be discussed:

• Can I cancel my BTO application?
• What are the penalties and consequences of cancelling my BTO application?
• What other options do I have when my chances of applying for a BTO are affected?
• What other options do I have aside from cancelling my BTO application?

Can I Cancel My BTO Application? 

Couples who break up after applying for a BTO may cancel their application. In order to cancel the BTO application, a request will have to be made online to the Housing Development Board (HDB) via MyRequest@HDB. However, doing so may entail financial consequences and penalties, as discussed below.

What are the Penalties and Consequences for Cancelling My BTO Application?

The penalties and consequences for cancelling the BTO application will vary depending on the stage of application in which the cancellation was made.

A brief summary of the monetary penalties and consequences is outlined in this table:

During the sales launch period

No penalty will be imposed if you cancel your flat application during the sales launch application period, which typically lasts for 8 days. The only loss incurred will be the $10 BTO application fee.

To cancel your application instantly, log in to the HDB Flat Portal and navigate to My Flat Dashboard before the application period ends.

After the sales launch period but before booking a flat 

While the only financial loss incurred for cancellation would be the $10 BTO application fee, you may lose your first-timer applicant privilege and incur 1 non-selection count if you were invited to book a flat when there were available units.

This could be consequential as first-timer privileges include:

• A high proportion of flat supply
• 2 ballot chances (1 more than second-timer applicants) or 3 ballot chances for eligible persons under the First-Timer (Parents & Married Couples) scheme
• An additional chance for every BTO application for a standard flat after 2 or more unsuccessful applications

For first-timer families which include couples, 1 non-selection count means that subsequent applications will be placed in the second-timer category for 1 year and all other flat applications would be automatically cancelled. Any additional ballot chances previously accumulated for unsuccessful BTO Standard flat applications will be reset to zero.

If another cancellation is made during this 1 year period, the first-timer priority will be further suspended for any additional year.

However, where there are fewer than 10 BTO units or less to choose from, HDB will waive the non-selection count and no penalty will be incurred for the cancellation.

After booking a flat but before signing the Agreement for Lease 

If you cancel your flat application during this stage, you must

• Serve a 1-year waiting period from the date of cancellation
• Forfeit the option fee (ranging from $500 to $2,000) before you can apply for or be included as an essential occupier in:
  • A new flat
  • A resale flat with CPF housing grant(s)
  • A Design, Build and Sell Scheme (DBSS) flat from a property developer
  • An Executive Condominium (EC) unit from a property developer
  • A resale flat announced for the Selective En bloc Redevelopment Scheme (SERS)
  • A rental flat from HDB

Furthermore, for first-timer families, any additional ballot chances from previous unsuccessful BTO applications for Standard flats will be reset to zero.

After signing the Agreement for Lease but before key collection

Within 9 months after booking a BTO, you will be invited to sign an Agreement for Lease. The penalty for cancelling the BTO application at this stage is similar to the previous stage, but includes higher forfeiture fees.

If you cancel your flat application during this stage, you must

• Serve a 1-year waiting period from the date of cancellation
• Pay forfeiture fees of 5% of the purchase price before you can apply for or be included as an essential occupier in:
  • A new flat
  • A resale flat with CPF housing grant(s)
  • A Design, Build and Sell Scheme (DBSS) flat from a property developer
  • An Executive Condominium (EC) unit from a property developer
  • A resale flat announced for the Selective En bloc Redevelopment Scheme (SERS)
  • A rental flat from HDB

Additionally, for first-timer families, any additional ballot chances from previous unsuccessful BTO applications for Standard flats will be reset to zero.

Further, after signing the lease agreement, the fees payable include the downpayment, buyer’s stamp duty (BSD), as well as legal fees. While the downpayment and legal fees are typically forfeited, the BSD may be refundable.

Downpayment 

Losing money from the down payment can be financially taxing. For example, a couple taking a loan from HDB may lose 10% of the purchase price should they cancel their BTO application. For example, if the unit is a 3-room unit priced at $300,000, this would mean forfeiting $30,000 upon cancellation.

The downpayment schemes can be found in the table below:

Buyer’s Stamp Duty

You may be able to get a refund of your BSD if you are using HDB’s lawyers. In order to apply for a refund, two conditions have to be fulfilled:

1. The purchaser has not cancelled or terminated the agreement to allow the vendor to sell the property to someone else.
2. The remission application must be submitted within 6 months from the date when the contract or agreement is rescinded.

When these conditions are fulfilled, you can apply to the Inland Revenue Authority of Singapore (IRAS) for a refund via the e-Stamping Portal and use your Singpass account to seek a refund under “Requests”. You will have to submit the original option to purchase or sales and purchase agreement, as well as any documentary evidence supporting the cancellation of the application.

If you are unable to meet the conditions to get a refund of your BSD, this will lead to a costly forfeiture as you may have to forgo the BSD in addition to the downpayment above. For example, a couple who bought a 4-room flat for $500,000 would have to forfeit 5% of the down payment, which would amount to $25,000. Where they are unable to get a refund of their BSD, they may have to forgo $20,000 of the BSD. This may bring the total financial forfeiture to around $45,000.

After key collection

After key collection, unmarried couples would typically be required to submit their marriage application within 3 months. As such, couples who break up during these 3 months would become ineligible to own the BTO unit. As a result, all payments accrued up to this point would be lost and the unit would have to be returned to HDB.

Besides the above-mentioned payments, other costs that would be incurred include the balance of the purchase price, survey fees, stamp duty on the Deed of Assignment (for those taking a housing loan) and lease in-escrow registration fee where HDB acts for you in the purchase and mortgage.

Upon key collection, the required downpayment is:

Furthermore, those taking a housing loan from HDB would have purchased a fire insurance policy before key collection, and those paying monthly instalments through CPF would have also purchased the Home Protection Scheme. These insurance payments that have been made will be forfeited when the unit is surrendered to HDB.

Besides incurring financial loss, you will no longer be considered a first-time applicant since you have already successfully applied for and received a BTO unit once, and hence lose all first-timer privileges. In addition, you may be barred from applying for a new flat for several years.

What Other Housing Options Do I have When My Chances of Applying for a BTO are Affected? 

As seen above, cancelling a BTO application after booking a flat will disentitle you to apply for a new flat, resale flat, Executive Condominium or rental flat from HDB for 1 year. In such situations, you may wish to consider resorting to private housing if you are facing urgency in acquiring a house and cannot wait for the end of the disbarment period.

What Other Options Do I have Besides Cancelling My BTO Application?

Can I change my ex’s name on the application to a new partner? 

Unfortunately, the HDB website states that flat applications are only valid if there are no changes to the persons listed in the application, and the application will be cancelled in the event of a break-up. Hence, it is unlikely that you can change the applicant (i.e. your ex) to a new partner.

Retaining ownership of flat with parents  

You may be able to retain ownership of the flat with your parents if they are included in the flat application. Since the eligibility of acquiring a flat under the Fiancé and Fiancée scheme is based on the formation of a family nucleus, the retaining party, along with their parents, may qualify to buy the flat as a family nucleus.

Ultimately, all requests for a change in flat application must be submitted via My HDBPage, and HDB will assess the applicants’ eligibility for the change on a case-by-case basis.

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If you have broken up with your significant other while in the process of securing a BTO flat, our conveyancing lawyers can help you navigate the complexities and explore the best options available to you.