10 Property Terms Every Buyer Should Know Before Signing Anything

Whether you’re buying a BTO flat, resale HDB, executive condo, or private property, there are a few key property terms you need to understand clearly before putting pen to paper. Misunderstanding any of these could lead to costly mistakes or missed opportunities.

Here’s a no-fluff guide to 10 essential property terms every buyer should know.

1. Option to Purchase (OTP)

An Option to Purchase is a legal agreement between the seller and buyer. After you’ve agreed on a price, the seller grants you an “option” — typically for 14 or 21 days — to decide if you want to go ahead with the purchase.

You’ll pay an option fee (usually 1% of the purchase price for private property, $1–$1,000 for HDB).
If you go ahead, you exercise the OTP and pay the remaining deposit.
If you don’t, the seller keeps the fee.

Why it matters: Once you exercise the OTP, you’re legally bound to complete the sale.

2. Buyer’s Stamp Duty (BSD)

BSD is a mandatory tax paid to the government when you buy any property in Singapore. The rate is calculated in tiers based on the purchase price or market value, whichever is higher.

As of 2023:

1% on the first $180,000
2% on the next $180,000
3% on the next $640,000
4%–5% for amounts above that

Why it matters: BSD can add tens of thousands to your total cost — factor it into your budget.

3. Additional Buyer’s Stamp Duty (ABSD)

ABSD is an extra tax on top of BSD, depending on your citizenship and how many properties you own.

Singaporeans pay ABSD only on their second and subsequent properties.
PRs and foreigners pay ABSD from their first purchase.

Rates change based on government policy, so check the latest rates before buying.

Why it matters: ABSD can be as high as 60% for foreigners — it's a major cost consideration.

4. Loan-to-Value (LTV) Ratio

This refers to how much loan you can get compared to the property’s value.

For your first housing loan, LTV is up to 75% (if loan tenure and age limits are met).
The remaining amount is covered by cash and CPF.

Why it matters: LTV limits how much you can borrow, so you must be prepared with cash or CPF for the rest — including legal fees and stamp duties.

5. Total Debt Servicing Ratio (TDSR)

TDSR caps the total amount of your monthly loan payments (including car loans, credit cards, etc.) at 55% of your gross monthly income.

Why it matters: Even if the bank wants to lend you more, you won’t qualify if your debt-to-income ratio exceeds this limit. It ensures you don’t overextend yourself financially.

6. Minimum Occupation Period (MOP)

If you’re buying a BTO or resale HDB flat, the MOP is the number of years you must live in the property before you can sell or rent it out (typically 5 years).

Why it matters: You’re committing to staying in the property for a while. If flexibility is important, know your MOP terms upfront.

7. Caveat

A caveat is a legal document lodged with the Singapore Land Authority (SLA) after you’ve exercised your OTP. It serves as public notice that you’re the buyer of the property.

Why it matters: It prevents the seller from accepting offers from other buyers and protects your interest in the property.

8. Valuation Limit (VL) and Withdrawal Limit (WL)

These terms apply when using CPF funds for your property purchase.

Valuation Limit: The maximum amount of CPF you can use, based on the property's valuation (not purchase price).
Withdrawal Limit: Currently set at 120% of the valuation — beyond this, you’ll need to set aside the full Retirement Sum in cash or savings.

Why it matters: If you're planning to rely heavily on CPF, you need to know when those funds will stop being available for loan payments.

9. Maintenance Fees / Conservancy Charges

Condos charge monthly maintenance fees to cover common facilities like pools, gyms, and security.
HDB flats pay Service Conservancy Charges (SCC), which vary by town council and flat type.

Why it matters: These recurring costs add up. Check them in advance to ensure they fit your monthly budget.

10. Progressive Payment Scheme (PPS)

If you're buying a new launch private condo, you’ll likely pay through the Progressive Payment Scheme, where payments are made in stages as the development is built.

You pay 5% booking fee, then additional amounts at milestones (foundation, walls, TOP, etc.)
The entire payment may take 2–3 years until completion

Why it matters: You don’t need to pay the full amount upfront, but you must be prepared for staged payments — often with interest once bank disbursement begins.

Final Thoughts

Understanding these 10 terms gives you a strong foundation as a buyer. The world of property can be filled with abbreviations, forms, and financial fine print — but once you decode the basics, the entire process becomes far less intimidating.

Before you sign anything, make sure you: