A new launch purchase is made before you can inspect the completed home. Good due diligence therefore means replacing assumptions with documents, measurements and site observations—and knowing which questions belong to the developer, bank, lawyer or public authority.
The checklist below is designed for private residential projects sold by licensed developers in Singapore. It deliberately avoids launch-day predictions and instead focuses on facts that can change whether a specific unit is affordable and suitable.
1. What is the Progressive Payment Scheme?
When purchasing an uncompleted private residential property (Building Under Construction or BUC) from a licensed developer in Singapore, buyers do not pay the full purchase price upfront. Instead, payments are regulated under the Housing Developers Rules and disbursed in stages as construction milestones are certified.[1]
This structure—known as the Progressive Payment Scheme (PPS)—protects home buyers by ensuring developers can only draw down purchase monies after a qualified person (such as an architect or civil engineer) certifies that specific structural milestones have been achieved. All standard Sale and Purchase Agreements (S&PA) prescribed by the Controller of Housing follow this statutory framework.[2]
Understanding the PPS timeline allows buyers to plan cash and CPF Ordinary Account (OA) outlays methodically, avoiding liquidity crunches during the three- to four-year construction cycle of projects like Thomson Reserve, Lucerne Grand, or Dunearn House.
Checkpoint
- Payment is tied to verified construction milestones, not arbitrary calendar dates
- Statutory protection: developers cannot demand funds prematurely without qualified certification
- Initial mortgage repayments start small and scale progressively with construction
- Requires separate tracking of cash, CPF OA savings and bank loan disbursements
2. Statutory payment milestones and percentages
The payment schedule in the standard Sale and Purchase Agreement prescribes clear percentages across the entire development journey, from booking to final legal completion.[1]
The table below details each milestone, the percentage payable, and the typical funding sequence for a standard private condo purchase:
| Stage / Construction Milestone | % Due | Cumulative % | Typical Funding Source |
|---|---|---|---|
| Booking Fee (Grant of Option to Purchase) | 5% | 5% | Cash only |
| Signing Sale & Purchase Agreement (within 8 weeks of OTP) | 15% | 20% | CPF OA / Cash |
| Completion of Foundation Work (including pile caps) | 10% | 30% | Bank Loan / CPF / Cash |
| Completion of Reinforced Concrete Framework | 10% | 40% | Bank Loan / CPF / Cash |
| Completion of Partition Walls | 5% | 45% | Bank Loan / CPF / Cash |
| Completion of Roofing / Ceiling | 5% | 50% | Bank Loan / CPF / Cash |
| Door sub-frames/frames, window frames, wiring, plastering & plumbing | 5% | 55% | Bank Loan / CPF / Cash |
| Car park, roads and drainage serving the housing estate | 5% | 60% | Bank Loan / CPF / Cash |
| Temporary Occupation Permit (TOP) / Notice of Vacant Possession | 25% | 85% | Bank Loan / CPF / Cash |
| Certificate of Statutory Completion (CSC) & Legal Completion | 15% | 100% | Bank Loan / CPF / Cash |
Checkpoint
- First 20% must be fully settled by Cash and/or CPF before loan disbursements begin
- Construction stages account for 40% of the purchase price (foundation through car parks)
- TOP represents the largest single progress drawdown at 25%
- Final 15% is held and released through Singapore Academy of Law stakeholder mechanics upon CSC and Legal Completion
3. Cash flow sequence: Cash, CPF OA and bank loan drawdown
Under Monetary Authority of Singapore (MAS) loan-to-value (LTV) regulations, a buyer with no existing housing loans can borrow up to 75% of the property value, requiring a minimum 25% downpayment (minimum 5% in cash, with the remaining 20% payable via CPF OA or cash).[3]
In the Progressive Payment Scheme, this downpayment and loan disbursement follow a strict statutory sequence:
1. Booking (5% Cash): When the developer issues the Option to Purchase (OTP), the 5% booking fee must be paid strictly in cash or cashier’s order. CPF cannot be used at this initial step.
2. S&PA Exercise (15% Cash/CPF): Within 8 weeks from the OTP date, upon signing the S&PA, the remaining 15% of the 20% contract-stage amount is due. This portion can be funded using CPF OA savings or cash.
3. First Construction Stage (5% Cash/CPF to reach 25% equity): To fulfill the 25% downpayment requirement before tapping a 75% loan, the first 5% of the Foundation stage is funded via Cash or CPF OA.
4. Bank Loan Drawdown (Remaining 75%): Once the full 25% buyer equity is committed, your financing bank begins progressive disbursements directly to the developer's Project Account upon receipt of certified architect notices.
CPF Board stipulates that CPF OA funds used for property purchases accrue interest at the prevailing rate and must be refunded upon subsequent property disposal.[4]
Checkpoint
- Minimum 5% cash upfront cannot be circumvented with CPF
- CPF OA funds are disbursed through conveyancing solicitors to the developer’s project account
- Bank loan only draws down after all designated cash/CPF downpayment tranches are exhausted
- Monthly mortgage repayments increase gradually as each construction milestone is drawn down
4. Worked example: Cash flow on a S$2,000,000 new launch unit
To visualize the actual financial requirements, let us trace a hypothetical S$2,000,000 unit purchased by a Singapore Citizen first-time buyer taking a maximum 75% loan (S$1,500,000) over 30 years.
In addition to the purchase price, Buyer's Stamp Duty (BSD) must be paid to the Inland Revenue Authority of Singapore (IRAS) within 14 days of signing the S&PA. On a S$2,000,000 purchase, tiered BSD amounts to S$69,600 (1% on first $180k, 2% on next $180k, 3% on next $640k, 4% on next $500k, and 5% on next $500k).[5]
Here is how payments unfold over time:
| Milestone | Nominal % | Gross Amount | Financed By | Cumulative Outlay |
|---|---|---|---|---|
| Option to Purchase (Booking) | 5% | S$100,000 | Cash | S$100,000 |
| S&PA Signing (within 8 weeks) | 15% | S$300,000 | CPF OA / Cash | S$400,000 |
| Buyer's Stamp Duty (within 14 days of S&PA) | Tiered | S$69,600 | Cash / CPF OA | S$469,600 |
| Foundation Completed | 10% | S$200,000 | S$100k CPF/Cash + S$100k Loan | S$669,600 |
| RC Framework Completed | 10% | S$200,000 | Bank Loan (Disbursed) | S$869,600 |
| Partition Walls Completed | 5% | S$100,000 | Bank Loan (Disbursed) | S$969,600 |
| Roofing / Ceiling Completed | 5% | S$100,000 | Bank Loan (Disbursed) | S$1,069,600 |
| Plastering, Wiring & Plumbing | 5% | S$100,000 | Bank Loan (Disbursed) | S$1,169,600 |
| Car Park, Roads & Drains | 5% | S$100,000 | Bank Loan (Disbursed) | S$1,269,600 |
| TOP / Key Collection | 25% | S$500,000 | Bank Loan (Disbursed) | S$1,769,600 |
| CSC / Final Legal Completion | 15% | S$300,000 | Bank Loan (Disbursed) | S$2,069,600 |
Checkpoint
- Total buyer equity required: S$500,000 (25%) + S$69,600 (BSD) = S$569,600
- Monthly loan servicing starts very low (interest/principal on small drawn amounts) and only hits full servicing upon TOP
- Servicing buffers should account for prevailing interest rate benchmarks
- Review our comprehensive <a href="/blog/new-launch-condo-due-diligence-checklist-singapore/">New Launch Due Diligence Checklist</a> before committing
5. Notice periods, 14-day payment windows & late charges
Timing precision is critical during the PPS cycle. When a construction milestone is certified, the developer sends a formal Notice of Payment accompanied by the architect's certificate to the buyer's conveyancing lawyer.[1]
Under clause 5 of the prescribed Sale and Purchase Agreement, payment must reach the developer within 14 calendar days from receipt of the notice. Time is expressly of the essence.
If the payment is delayed—whether due to administrative lag from your bank, CPF processing delays, or personal funds transfer issues—the developer is legally entitled to charge interest on late payments (typically pegged at 2% above the average prime rate of designated local banks under clause 6 of the S&PA).[1]
To avoid costly late interest charges, ensure your conveyancing lawyer is responsive and that you maintain standing instructions with your financing bank to disburse payments immediately upon receipt of valid architect certificates.
Checkpoint
- Strict 14-day deadline from date of receipt by conveyancing solicitor
- Ensure your bank's loan operations team has all required loan documents executed well before foundation stage
- Notify your lawyer immediately if you travel or change contact details during the construction period
- Late charges are legally enforceable and computed on daily balances
6. TOP, defects liability and the Singapore Academy of Law stakeholder
A major milestone occurs when the Commissioner of Building Control issues the Temporary Occupation Permit (TOP). Upon TOP and satisfaction of essential services (water, electricity, access roads, drainage), the developer serves the Notice of Vacant Possession, triggering the 25% progress payment.[1]
Once this payment is settled, buyers receive the keys to their unit and can commence defect inspections. Under clause 17 of the prescribed S&PA, the developer provides a 12-month Defects Liability Period (DLP) starting from the date of the Notice of Vacant Possession.[1]
For the final 15% due upon Certificate of Statutory Completion (CSC) and Legal Completion, the law incorporates an essential consumer protection mechanism: 13% of the purchase price is held by the Singapore Academy of Law (SAL) as a stakeholder.[1]
Of this 13%, 5% is retained as a defects retention sum. If the developer fails to rectify verified defects within the contractual notice timeframe, buyers may serve notice under clause 5.4 to make authorized deductions from the stakeholder sum to rectify defects independently.[1]
Checkpoint
- Keys are handed over upon payment of the 25% TOP milestone
- 12-month Defects Liability Period begins on the Notice of Vacant Possession date
- 5% defects retention sum is held by SAL as an independent stakeholder to safeguard defect rectification
- Final legal completion formalizes subsidiary strata title transfer at Singapore Land Authority