What Are the Differences Between Buying Public and Private Property?

By now you’ve probably made your decision on what property type to purchase. But before you make your purchasing decision, it’s good to understand the key differences between purchasing a public and private property.

In case you’re unsure about what’s a public and private property, see the table below:

Public Property Private Property
  • HDB Flats (SBF, BTO, DBSS)
  • Executive Condominiums (EC)10 years or younger
  • Condominiums
  • Landed Properties
  • Semi-Private Executive Condominiums (EC)

Important Note: While Executive Condominiums (EC) are treated as public housing, after the 10th year, they’re considered private properties.

Here’s how public and private properties differ from a purchasing standpoint:

  • You Need a Bank Loan for Private Housing: All forms of private housing needs a bank loan, which means the following:
    • You’ll need to make a higher cash down payment (at least 5%) that depends on your CPF balance and Debt Servicing Ratio (DSR). Public housing on the other hand can be purchased with no cash down payment with an HDB loan.
    • Banks don’t offer continuous fixed-rate loan packages. Instead, the rates revert to floating rates after 3 – 5 years. HDB loans on the other hand do offer continuous fixed-rate loan packages, but the interest rate is currently more expensive (2.6% compared bank interest rates that hover around 1.7%).
  • There are Resale Restrictions: With public housing, there’s a Minimum Occupancy Period (MOP) of 5 years that needs to be satisfied before you can rent or sell it. There’s also a resale levy that needs to be paid in certain cases, which will cancel out much of your housing grants when buying another property. But with private housing, you’ll need to pay the Seller Stamp Duty (SSD) if you sell your home within 4 years.
  • There Is the Possibility of Freehold: HDB flat come with a 99-year leasehold. With private property, you might be able to find freehold land which range from 999 lease properties to totally freehold.
  • Know Your Eligibility for Grants: HDB buyers have a variety of grants to help with the purchase, but if you want to buy a private property, you can get a grant for an Executive Condominium (EC) if it’s over 11 years. You can get from $5,000 – $30,000 depending on your income, making this the only type of private property you can get a grant for.