Yahoo Finance 
Guide to using your CPF funds to pay for your HDB flat or private property in Singapore
Find out how much you can use from your CPF savings for purchasing a HDB home in Singapore and which payments it can be used for.
SINGAPORE — In Singapore, the Central Provident Fund (CPF) plays a crucial role in helping citizens finance their housing needs. Whether you're looking to purchase a Housing Development Board (HDB) flat or private property, understanding how to utilise your CPF funds for buying a house is essential.
This guide provides comprehensive information on various aspects of using CPF funds for buying property.
How much CPF funds can you use to buy HDB or private property?
When it comes to using CPF funds for property purchases, the amount of savings you can use depends on several factors, such as whether you are taking a bank or HDB loan and the number of years left in the property's lease. Savings in your CPF Ordinary Account (OA) can be used to pay the downpayment, monthly mortgage instalments, and other related costs, though the amount varies depending on which scenario you fall under, as explained below:
HDB loan
Suppose you are taking an HDB loan to finance the purchase of a Build-to-Order (BTO) or Sale-of-Balance (SBF) flat. In that case, you and your co-owners, if any, can use your respective OA savings to pay for the initial 10 per cent downpayment as well as the balance of the purchase price.
For resale flats or Design, Build, and Sell Scheme (DBSS) flats where the remaining lease of the property covers the youngest owner to at least 95 years old, you can use your OA savings to pay for the remaining balance after paying for the deposit in cash. However, you can only use the OA savings up to the lower of the purchase price or the valuation price at the time of purchase.
If you still have an outstanding housing loan, you can continue using your OA savings to pay for it as long as enough is set aside for the applicable Basic Retirement Sum (BRS) in your CPF accounts. Savings from your Retirement Account (RA), Special Account (SA) and OA can be used to meet the BRS requirement.
Also read: CPF minimum interest rate of 4% extended 1 more year till 31 December 2024
Also read: CPF nomination not automatically revoked upon divorce, current rules under review
Bank loan
You and your co-owners can only use your respective OA savings to pay for the property after you have paid in cash the downpayment of at least five per cent, the portion of the purchase price that is above the market value of the property, the lower of the purchase price or the valuation price of the property at the time of purchase less the housing loan and approved CPF lump sum that will be paid towards the property, the option fee at the time of booking for HDB flats, and the option exercise fee for resale HDB flats.
If you do not have any existing property that is financed by your OA savings, you may use your OA savings up to the lower of the purchase price or the valuation price at the time of purchase. Your OA savings can also be used to pay any outstanding housing loan as long as you set aside the applicable Basic Retirement Sum (BRS) in your CPF accounts. The total amount all owners are allowed to use from their respective OA savings will increase by 20 per cent of the lower of the purchase price or the valuation price of the property at the time of purchase, after which no further CPF usage is allowed.
Those with an existing property that is financed with OA savings can only use their OA savings to purchase a new property after setting aside the applicable BRS (S$99,400 for 2023) in their CPF accounts. The OA savings can continue to be utilised until the total CPF usage by all owners reaches the lower of the purchase price or the valuation price of the property at the time of purchase.
Stamp duty, a tax levied on property transactions, cannot be paid using CPF funds. This tax must be settled in cash and is a mandatory expense associated with property ownership.
No loan
If you do not intend to take a loan and do not have any existing property financed with OA savings, you may use your OA savings to pay for the purchase up to the lower of the purchase price or the valuation price of the property at the time of purchase. No further CPF usage is allowed thereafter.
If you have an existing property financed with OA savings, using your OA savings is only allowed after setting aside the applicable BRS in your CPF accounts. OA savings can be used until the total CPF usage by all owners reaches the lower of the purchase price or the valuation price of the property at the time of purchase, after which no further CPF usage is allowed.
Can a Singapore PR use CPF to buy HDB?
Singapore Permanent Residents (PRs) are eligible to use their CPF funds to purchase HDB flats. However, there are certain restrictions. PRs can only use their CPF savings to buy resale HDB flats, and they need to meet specific criteria. This includes buying under a family unit (married to a Singapore citizen) or through the fiance/fiancee scheme, which means that single PRs cannot buy a resale HDB flat.
Can you use CPF funds to pay HDB or bank loan?
CPF funds can be utilised to service both HDB and bank loans. This will be drawn from your CPF OA savings. For bank loans, you should inform your lawyer of your intention to use CPF funds for home loan repayment at the point of loan application.
How to use CPF funds to pay HDB or bank loan?
To use CPF funds for loan payments, you need to apply and authorise the CPF Board to make direct payments to the HDB or bank. This process involves submitting a GIRO application, allowing the monthly loan instalment to be deducted automatically from your CPF OA. You can also adjust the amount and stop your OA savings for your monthly instalments or use them to make partial or full capital repayments.
Can you pay the HDB levy with your CPF?
When you sell your current HDB flat and buy another subsidised flat from HDB, you will need to pay the HDB resale levy. The resale levy is deducted from your sale proceeds, and any shortfall will have to be paid in cash. It must be settled in cash and cannot be offset using CPF savings. In the event that you sell your flat first, you will need to pay the resale levy in cash before you're allowed to take possession of your second flat.
Can you use CPF to pay stamp duty?
Stamp duty, a tax levied on property transactions, cannot be paid using CPF funds. This tax must be settled in cash and is a mandatory expense associated with property ownership. Buyers should budget for stamp duty costs separately from their CPF savings, considering it as part of the overall financial commitment when acquiring a property.
If you sell your HDB, how much must you pay back to CPF?
If you sell your HDB flat, the proceeds from the sale, after settling outstanding loans and other charges, must be used to refund the CPF savings used to finance the property. The amount refunded includes the principal amount withdrawn and the accrued interest, which is set at the CPF OA base interest rate of 2.5 per cent.
There is also the option of making a voluntary housing refund to your OA savings that were used to purchase the property. This allows you to receive more cash proceeds when selling your property, as your refund amount will be less. In addition, you can use your refunded CPF savings for the various CPF-approved schemes, such as the CPF Investment Scheme (CPFIS), if needed.
Follow us on Facebook, Instagram, TikTok and Twitter.
