The True Cost of Homeownership: What’s Beyond the Sale Price?

lakesidegrand
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posted on 5 hours ago — updated on 1 second ago

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When most people talk about buying a home, the focus is usually on one thing: the sale price. But the reality is, homeownership comes with a wide range of hidden costs — some predictable, others surprising — that can impact your budget and long-term financial planning.

Whether you're buying a private condo or an HDB flat, it's crucial to understand what you're really signing up for. Beyond the purchase price and down payment, there are ongoing costs that can quietly eat into your finances if you’re not prepared.

Here’s a breakdown of the true cost of homeownership, and what to factor in when planning your home purchase.

1. Buyer’s Stamp Duty (BSD)

In Singapore, every property purchase is subject to Buyer’s Stamp Duty, which increases with the price of the property.

As of 2025:

1% on first $180,000
2% on next $180,000
3% on next $640,000
4–5% on higher portions (depending on value)

This means if you're buying a $1 million property, you’ll be paying about $24,600 in stamp duties, not including any additional taxes like ABSD (if applicable).

Tip: First-time Singaporean buyers of HDB flats are exempt from ABSD but must still pay BSD.

2. Legal and Conveyancing Fees

To complete a property transaction, you'll need a lawyer or conveyancing firm. Legal fees typically range between $2,000 and $3,000 for most residential property purchases, depending on whether you're using CPF, taking a bank loan, or purchasing through a HDB scheme.

Note: If you're taking a HDB loan and buying directly from HDB, legal fees may be slightly lower.

3. Home Renovation and Furnishing

Renovation is one of the most commonly underestimated costs. Depending on the condition of the property and your taste, this could range from:

$30,000 to $50,000 for basic HDB flats
$50,000 to $80,000+ for full interior design and upgrades in private condos

On top of that, furnishing a home — from lights and curtains to appliances and furniture — could easily add another $10,000 to $20,000 or more.

Tip: Always get multiple renovation quotes, and prepare for some unexpected costs or upgrades once work begins.

4. Monthly Loan Repayments

Your home loan is likely the largest recurring cost of homeownership. Depending on the loan amount, interest rate, and tenure, monthly repayments can range widely. Even a minor increase in interest rates can make a noticeable difference.

For example:

A $600,000 loan at 3.5% over 25 years = ~$3,000/month

Tip: Build in a buffer in case interest rates rise in the future. You should ideally not spend more than 30–35% of your monthly income on mortgage repayments.

5. Maintenance and Conservancy Fees

If you own a condo, monthly maintenance fees range from $250 to $500 (or more), depending on the size of the development and facilities.

If you own a HDB flat, you'll pay S&CC fees (Service & Conservancy Charges), which are lower — typically between $20 to $90/month, depending on flat size and town council.

These charges cover:

Cleaning and landscaping
Lift maintenance
Security and shared amenities
General upkeep of common areas

Note: Failing to pay these fees can result in penalties or suspension of services.

6. Property Tax

Annual property tax is based on the Annual Value (AV) of your property, which is estimated by IRAS based on rental value. The tax rate depends on whether the property is owner-occupied or rented out.

For owner-occupied residential properties (as of 2025):

0–16% of AV

Example: If your home’s AV is $30,000, you might pay ~$1,000 to $2,000 per year in property tax.

Tip: Check IRAS to estimate your property’s AV and annual tax obligation before buying.

7. Home Insurance

Homeowners are encouraged to get fire and home content insurance, especially if you're using a home loan (required by most lenders).

Basic fire insurance (for structural damage) costs as little as $100 to $200/year, but comprehensive home insurance that includes contents, theft, and renovation coverage can range from $300 to $600/year, depending on coverage and value.

8. Repairs and Replacement Costs

Over time, appliances break, aircons need servicing, and pipes leak. These are unavoidable costs that come with maintaining a home.

Some typical recurring costs include:

Aircon servicing: ~$300–$600/year
Plumbing/electrical repairs: $100–$500 per incident
Replacement of appliances: every 5–10 years (fridge, washer, etc.)

Tip: Keep a home maintenance fund of 1–2% of your home’s value per year for ongoing upkeep.

9. Opportunity Costs and Lifestyle Trade-Offs

Owning a home can limit flexibility. Unlike renting, you can’t easily relocate for work, and you may end up tying up significant capital that could otherwise be invested.

Also, monthly commitments may reduce your ability to travel, save aggressively, or explore other investments. That doesn’t make homeownership a bad choice — it just means you need to factor in what you're giving up, not just what you’re gaining.

Final Thoughts

Buying a home is more than just paying the purchase price — it’s a long-term financial commitment with many hidden and ongoing costs. By planning ahead and understanding the full picture, you’ll avoid nasty surprises and enjoy a smoother path to homeownership.

Before signing anything, ask yourself: