Buying a new property is an exhilarating journey, but it can also be a complex one, especially when it comes to financing. One of the key aspects that often confuses first-time buyers in Singapore is the Progressive Payment Scheme (PPS) for new launches. But fear not! In this guide, we’ll break down the stages of progressive payments, ensuring you’re well-prepared for each milestone.

What is the Progressive Payment Scheme (PPS)?

The Progressive Payment Scheme is a payment structure tailored for properties under construction, typically new launches or Build-To-Order (BTO) flats. Instead of paying the full amount upon completion, buyers pay in stages, aligned with the construction progress.

Stages of Progressive Payments:

• Booking Fee (5% of Purchase Price): This is the initial amount you pay to secure your unit. It’s typically 5% of the purchase price and is paid when you sign the Option to Purchase.
• Exercise of Option (15%): Within 14 days of paying the booking fee, you’ll need to exercise the Option to Purchase. This involves paying another 15% of the purchase price.
• Foundation Work (10%): Once the foundation work for your property begins, another 10% is payable.
• Completion of Each Storey (10%): As each storey of the building is completed, you’ll pay 10% of the purchase price. This is repeated for every storey until the building is topped out.
• Roofing/ Ceiling (5%): When the roof or ceiling is completed, another 5% is due.
• Windows, Wiring, and Plumbing (5%): As these elements are put in place, you’ll pay an additional 5%.
• Tiling and Internal Plastering (5%): Once tiling and internal plastering are done, another 5% becomes payable.
• Completion of Doors and Windows (5%): With the installation of doors and windows, you’ll pay another 5%.
• Completion and Possession (25%): Upon the project’s completion, the remaining 25% is payable. This is typically the stage where you’ll take possession of the property.

Why Progressive Payments?

The PPS is designed to ease the financial burden on buyers. Instead of a hefty lump sum, payments are spread out, allowing buyers to manage their finances better. Moreover, it aligns with the developer’s need for funds to continue construction.

Things to Note:

• Loan Disbursement: If you’re taking a bank loan, the bank will disburse the loan amount in tandem with the PPS stages. Ensure you have an open line of communication with your bank.
• Interest: Interest on your home loan starts accruing once the bank begins disbursing the loan. Be prepared for this when budgeting.

In Conclusion

Understanding the Progressive Payment Scheme is crucial for anyone considering a new property launch in Singapore. It not only helps in financial planning but also ensures you’re not caught off guard by any unexpected payments.

If you’re on the hunt for a new property or need guidance on navigating the complexities of property financing, I’m here to help. With a deep understanding of Singapore’s real estate market, I can provide insights tailored to your needs. Reach out today and let’s embark on your property journey together.

Disclaimer:
While we make every effort to ensure the accuracy of the information presented here, we cannot accept responsibility for any loss or inconvenience resulting from errors or omissions. The ideas, suggestions, general principles, examples, and other information provided here are intended for reference and educational purposes only. The content does not constitute investment, regulatory, or legal advice, nor does it offer recommendations for property buying, selling, or leasing. We disclaim any liability for losses or expenses incurred as a result of decisions made by the audience based on this information. All copyrights are reserved.