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Understanding the Option to Purchase (OTP) and Sale & Purchase Agreement (SPA) process is essential before you book a new launch condo unit in Singapore. Unlike resale property, new launch condos follow a standardised developer sale process governed by the Housing Developers Rules — knowing each step protects your deposit and your legal rights.
Step 1 — Booking a New Launch Condo Unit
The new launch buying journey typically begins at a showflat, where you view show units representing the actual layouts and finishes of the development. After viewing and selecting a unit, the next step is to confirm your interest by paying the booking fee of 5% of the purchase price. This payment is made by cheque or cashier’s order to the developer’s Project Account.
Before visiting the showflat, it is strongly advisable to obtain an In-Principle Approval (IPA) or Approval-In-Principle (AIP) from your bank. An IPA confirms how much the bank is willing to lend you based on your income, existing liabilities, and credit profile. Knowing your loan quantum before booking prevents you from over-committing on a unit you may not be able to finance.
Upon paying the booking fee, you will receive an official receipt confirming the unit allocation. The booking fee is non-refundable — if you decide not to exercise the OTP within the 21-day window, the developer keeps the 5%. No exceptions are made regardless of the reason for withdrawal.
Step 2 — Receiving the Option to Purchase (OTP)
Within 3 business days of receiving the booking fee, the developer is legally required to issue the Option to Purchase to the buyer. The OTP is a formal legal document containing:
- The full purchase price and payment terms
- Floor plan of the specific unit purchased
- Specifications and fittings included in the unit
- The expiry date of the option (21 days from the date of issue)
The OTP grants you an exclusive 21-day window to decide whether to proceed with the purchase. This is the period during which you should engage a conveyancing lawyer, review the OTP carefully, finalise your bank loan, and ensure your CPF and cash are in order.
To exercise the OTP, you sign and return the OTP to the developer along with a further 15% of the purchase price, bringing your total cash/CPF commitment to 20%. If you do not exercise the OTP by the deadline, the option lapses and the 5% booking fee is forfeited.
Step 3 — Exercising the OTP & Stamp Duty
Exercising the OTP is a legally binding decision. Once you sign and return it with the 15% exercise payment, you are committed to completing the purchase. From this point, there is no right to withdraw without forfeiting the 20% already paid and potentially facing further legal liability.
Within 14 days of exercising the OTP, the buyer must pay Buyer’s Stamp Duty (BSD) — and Additional Buyer’s Stamp Duty (ABSD) if applicable. These are payable to IRAS (Inland Revenue Authority of Singapore).
Buyer’s Stamp Duty (BSD) Rates for Residential Property
| Purchase Price / Market Value | BSD Rate |
|---|---|
| First $180,000 | 1% |
| Next $180,000 | 2% |
| Next $640,000 | 3% |
| Next $500,000 | 4% |
| Next $1,500,000 | 5% |
| Remaining amount above $3,000,000 | 6% |
For a detailed worked example of how BSD is calculated on a specific property price, refer to our BSD calculator guide.
Additional Buyer’s Stamp Duty (ABSD) Rates (2024 onwards)
| Buyer Profile | ABSD Rate |
|---|---|
| Singapore Citizen — 1st residential property | 0% |
| Singapore Citizen — 2nd residential property | 20% |
| Singapore Citizen — 3rd and subsequent | 30% |
| Singapore Permanent Resident — 1st residential property | 5% |
| Singapore Permanent Resident — 2nd and subsequent | 25% |
| Foreigner (any residential property) | 60% |
ABSD must be paid in cash — CPF cannot be used. For a full breakdown of ABSD in Singapore including remission conditions for couples and entities, see our dedicated ABSD guide.
Step 4 — Signing the Sale & Purchase Agreement (SPA)
After exercising the OTP, you have up to 8 weeks — known as the S&P period — to sign the Sale & Purchase Agreement. The SPA is the principal binding legal contract governing the entire transaction between you and the developer.
New launch condo SPAs in Singapore follow the REDAS standard form, which is mandated under the Housing Developers (Control and Licensing) Act. Key clauses to understand include:
- Progressive payment schedule — payments tied to construction milestones (detailed in the next section)
- Defect liability period — typically 12 months from the date of vacant possession; during this period the developer must rectify any defects at no cost to the buyer
- Completion timeline — the estimated TOP and CSC dates; if the developer fails to complete within the extended period allowed, the buyer has the right to rescind and recover all payments with interest
- Permitted assignment — conditions under which you may sub-sell or assign the property before completion (subject to developer consent and prevailing rules)
Your conveyancing lawyer will review the SPA, raise requisitions, and handle the lodgement of the caveat with the Singapore Land Authority (SLA). It is important to appoint an independent lawyer — not one appointed by the developer — to ensure your interests are protected.
Progressive Payment Schedule for New Launch Condos
Under the Housing Developers Rules, the standard progressive payment scheme ties each instalment to a specific construction milestone. If you have a bank loan, your bank disburses each tranche directly to the developer upon confirmation that the milestone has been reached.
| Construction Milestone | Payment (%) | Cumulative (%) |
|---|---|---|
| Booking fee (upon booking) | 5% | 5% |
| Exercise of OTP | 15% | 20% |
| Foundation completed | 10% | 30% |
| Reinforced concrete framework completed | 10% | 40% |
| Partition walls completed | 5% | 45% |
| Roofing (condominium floor) completed | 5% | 50% |
| Windows and doors installed | 5% | 55% |
| Car park, internal roads and drains completed | 5% | 60% |
| Temporary Occupation Permit (TOP) — Keys collection | 25% | 85% |
| Certificate of Statutory Completion (CSC) / Legal Completion | 15% | 100% |
If you are financing with a bank loan and have a Deferred Payment Scheme (DPS) arrangement (if offered by the developer), the structure may differ — consult your lawyer and banker on the specific terms applicable to your unit.
Key Legal Protections for New Launch Condo Buyers in Singapore
Singapore’s legal framework for new launch condo purchases provides robust protections for buyers. Here is what the law mandates on your behalf:
1. Project Account Protection
Under the Housing Developers Rules, developers are required to deposit all sale proceeds into a Project Account with a designated bank. Withdrawals from the Project Account are strictly controlled and can only be made for approved project-related expenditures. This protects buyers from developers misappropriating funds, as happened in property markets with weaker regulatory oversight.
2. 12-Month Defect Liability Period
From the date of vacant possession (TOP), the developer must rectify any defects notified by the buyer within the 12-month defect liability period at no charge. Buyers should conduct thorough defect checks upon key collection and submit their defect list in writing within this window.
3. Right to Rescind for Non-Completion
If the developer fails to complete the development and obtain TOP by the extended completion date specified in the SPA, buyers have the statutory right to rescind the SPA and recover all monies paid with interest. This is a significant consumer protection not available in most other property markets in the region.
4. REDAS Standard Form SPA
The use of the Real Estate Developers’ Association of Singapore (REDAS) standard form SPA — required under the Housing Developers Rules — ensures that key consumer protection terms cannot be altered or removed by developers. This prevents developers from inserting unfair or one-sided clauses into the agreement.
If you are an HDB upgrader buying your first private property, understanding these protections is especially important as you navigate both your HDB sale timeline and your new launch progressive payment obligations concurrently. You should also be aware of your TDSR (Total Debt Servicing Ratio) limits before committing to any purchase.
Frequently Asked Questions: Singapore New Launch Condo OTP & SPA Process
What is the OTP for a new launch condo?
The Option to Purchase (OTP) is a legal document issued by the developer within 3 business days of your 5% booking fee payment. It grants you the exclusive right to purchase the specific unit at the agreed price for 21 days. You exercise the OTP by signing it and paying a further 15%, bringing total payment to 20%.
What is the SPA for a new launch condo?
The Sale & Purchase Agreement (SPA) is the binding legal contract between buyer and developer. Signed within 8 weeks of OTP exercise, it sets out the progressive payment schedule, completion date, defect liability period, and all other terms of the sale. Singapore new launch SPAs follow the REDAS standard form mandated by the Housing Developers Rules.
When do I pay stamp duty on a new launch condo?
BSD and ABSD (if applicable) must be paid within 14 days of exercising the OTP. BSD can be paid using CPF Ordinary Account funds; ABSD must be paid in cash. Failure to pay within 14 days attracts penalties from IRAS.
Can I withdraw from a new launch condo purchase after exercising the OTP?
Once the OTP is exercised and the SPA signed, you are legally obligated to complete the purchase. Defaulting means forfeiting the 20% already paid and potentially being liable for additional losses the developer suffers. Legal advice should be sought immediately if you are considering withdrawal.
What is the progressive payment scheme for new launch condos?
Progressive payments are disbursed in tranches as construction milestones are reached: 5% booking, 15% OTP exercise, then 10%+10% for foundation and RC framework, 5% each for partition walls/roofing/windows/car park, 25% at TOP (keys), and 15% at CSC (full legal completion). Bank loans disburse directly to the developer at each milestone.
When do I collect the keys to my new launch condo?
Keys are collected at the Temporary Occupation Permit (TOP) stage, which triggers the 25% payment. The unit is habitable from TOP. The Certificate of Statutory Completion (CSC) — when the final 15% is due — follows typically 6–18 months later and represents full legal completion of the development.
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CEA Reg. No. R072324C · ERA Realty Network Pte Ltd · Alvin Tan
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