How much is the option fee for a private property in Singapore?

It is typically 1% of the purchase price, though it can be negotiated. On exercising the option the buyer usually tops up to a 5% deposit.

What happens if the buyer does not exercise the OTP?

The option simply lapses at the end of the option period and the option fee (typically the 1%) is forfeited to the seller. The larger deposit only comes into play once the option is exercised.

What happens if the buyer exercises the OTP but then fails to complete?

Exercising creates a binding contract of sale and purchase, so the buyer can no longer walk away for the price of the option fee. The seller may forfeit the deposit (typically the 5%), resell the property and sue for damages such as the shortfall on the resale — or seek specific performance, which courts grant readily for land because each property is unique. If instead the seller defaults after exercise, the buyer can recover the deposit plus damages or ask the court to order the sale through.

Is a new-launch OTP the same as a resale OTP?

No. For a new launch from a developer you pay a booking fee in cash on the grant of the OTP, normally 5% (Housing Developers Rules r 8 allows 5% to 10%); the developer must deliver the prescribed Sale & Purchase Agreement within 14 days, and you have 3 weeks from receiving it to exercise. If you don't proceed, the developer may forfeit 25% of the booking fee and must refund the remaining 75%. The 1%/5% structure is for a private resale.

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Paper 2 · Sale of Private Properties (New, Resale & En Bloc) · 11 min read

OTP Singapore: Option to Purchase Fee, Period & Exercise

Practise this section (170 questions) → · 4.2 Sale of completed private properties, in sets of about 30

Must-know for the exam

Before an option is granted nothing binds: subject to contract talks let either side walk away, and a right of first refusal, unlike an option, cannot force a sale.
The buyer pays an option fee of about 1% on grant, and the seller cannot sell to anyone else during the option period, commonly 14 days.
On exercising, the buyer signs the OTP and tops up the deposit to 5% of the price, which converts the option into a binding contract of sale and purchase.
The option period is the window to exercise, not to complete; completion follows about 8 to 12 weeks later, when the buyer pays the balance 95% plus stamp duties.
If the buyer lets the option lapse without exercising, only the option fee (about 1%) is forfeited to the seller and no further liability arises.
A buyer who fails to complete after exercising forfeits the 5% deposit, held by the seller's solicitor as stakeholder, and faces damages or specific performance.
If the seller defaults after exercise, the buyer can recover the deposit plus damages or ask the court to order the sale through.
A new launch takes a cash booking fee of 5% to 10% (Housing Developers Rules r 8); if the buyer walks away, 25% is forfeited and 75% refunded.
Stamp duty is due within 14 days of exercise, not completion, and the salesperson must not hold or handle the option fee or deposit (EA(EAW) Regulations 2010, reg 7).
There is no statutory cooling-off period for a private resale once the OTP is exercised, and an HDB resale OTP does not follow the 1%/5% structure.

On this page · 9 sections

For a private resale, the Option to Purchase (OTP) is the contract that locks the deal in place before the formal Sale & Purchase Agreement. It gives the buyer an exclusive right to buy within a set window. The RES exam tests the mechanics and the money at each stage.

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The resale path: OTP → option period → exercise → completion.

The stages, with the money

Stage	What happens	Money
Grant of OTP	Seller grants the option; buyer gets exclusive right to buy	Buyer pays Option Fee ≈ 1%
Option Period	Commonly 14 days (negotiable, e.g. 21). Seller can't sell to anyone else	—
Exercise	Buyer signs the OTP to proceed	Top up to a 5% deposit (i.e. +4%)
Completion	Title transfers, keys handed over (~8–12 weeks later, via lawyers)	Pay the balance 95% + stamp duties

Swipe sideways to see all of it.

The option period is the window to EXERCISE, not to complete. Completion is a separate, later stage.

If the buyer doesn't proceed

If the buyer lets the option lapse (doesn't exercise within the period), the OTP simply expires and the Option Fee (~1%) is forfeited to the seller — nothing more. The 5% deposit only becomes relevant once the option is exercised.

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Quick self-check · 5 questions

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In a private resale, what does the buyer pay on grant of the OTP, on exercise and at completion?Show answer
About 1% option fee on grant, top up to a 5% deposit on exercise, and the 95% balance plus stamp duties at completion. The option period, commonly 14 days, is the window to exercise, not to complete.
A buyer lets the option lapse without exercising. What does he lose, and what if he defaults after exercising?Show answer
Before exercise: only the ~1% option fee. After exercise there is a binding contract, so the 5% deposit is forfeited and he is exposed to damages or specific performance.
When is buyer's stamp duty due on a private resale signed in Singapore?Show answer
Within 14 days of exercise, because the exercised option is the contract of sale; not at completion. If signed overseas, 30 days after receipt in Singapore.
On a new launch, what happens to a 5% booking fee if the buyer does not exercise?Show answer
The developer may forfeit 25% of the booking fee and must refund 75%. The S&P must be delivered within 14 days, and the buyer has 3 weeks from receiving it to exercise.
How does a right of first refusal differ from an option?Show answer
An option holder decides whether the sale happens; the seller must sell if exercised in time. A first-refusal holder only gets first turn if the owner chooses to sell, and cannot force a sale.

Common questions

How much is the option fee for a private property in Singapore?: It is typically 1% of the purchase price, though it can be negotiated. On exercising the option the buyer usually tops up to a 5% deposit.
What happens if the buyer does not exercise the OTP?: The option simply lapses at the end of the option period and the option fee (typically the 1%) is forfeited to the seller. The larger deposit only comes into play once the option is exercised.
What happens if the buyer exercises the OTP but then fails to complete?: Exercising creates a binding contract of sale and purchase, so the buyer can no longer walk away for the price of the option fee. The seller may forfeit the deposit (typically the 5%), resell the property and sue for damages such as the shortfall on the resale — or seek specific performance, which courts grant readily for land because each property is unique. If instead the seller defaults after exercise, the buyer can recover the deposit plus damages or ask the court to order the sale through.
Is a new-launch OTP the same as a resale OTP?: No. For a new launch from a developer you pay a booking fee in cash on the grant of the OTP, normally 5% (Housing Developers Rules r 8 allows 5% to 10%); the developer must deliver the prescribed Sale & Purchase Agreement within 14 days, and you have 3 weeks from receiving it to exercise. If you don't proceed, the developer may forfeit 25% of the booking fee and must refund the remaining 75%. The 1%/5% structure is for a private resale.

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Study material aligned to the public CEA syllabus. Not financial or legal advice — verify current figures with the relevant authority (IRAS, HDB, CEA, MAS).