When you start thinking of selling your current flat, two options probably come to mind first.
You could either sell it off and stay somewhere temporarily before moving into your new one, or you could purchase your new flat first and risk being stuck with two sets of mortgage payments for a while before you complete the sale of your existing one.
There’s another option however, created by HDB, and it is known as the ‘Contra Facility’ arrangement.
Here’s everything you need to know about how it works.
What is the HDB contra facility?
Contra is HDB’s way of offsetting your sales proceeds and refunded CPF to use for your next flat purchase. This lets you complete both transactions on the same day, rather than two separate events.
Normally, the sale and purchase of a HDB flat would be treated as two separate transactions.
Even if you’re sure your sale proceeds will cover your next flat purchase, you can’t touch that money until the sale has been fully completed, and it has been released back into your bank or CPF account.
Contra removes that gap, by allowing HDB to apply your incoming funds directly to your purchase at the same completion appointment.
There are two versions of contra, and the one that applies to you depends on what you’re buying next.
| Contra Payment Facility (CF) | Enhanced Contra Facility (ECF) | |
|---|---|---|
| What you’re buying | A new flat directly from HDB | A resale flat on the open market |
| Who’s involved in the transaction | You, your buyer, and HDB | You, your buyer, and your seller |
| Financing required | HDB housing loan | HDB housing loan or no housing loan; you cannot finance the purchase with a bank loan |
| Timing | You can collect your new flat keys while your existing flat is being sold | Sale of your existing flat must complete before your purchase; both can complete on the same day |
| Complexity | Lower – HDB is the only other party | Higher – timing also depends on the other two parties involved |
If you’re buying a new flat directly from HDB, the Contra Payment Facility (CF)(opens in new tab) arrangement is relatively straightforward, as you only have one other party to liaise and transact with.
The Enhanced Contra Facility (ECF)(opens in new tab) on the other hand, is slightly more complicated as you’ll have to deal with both your buyer and seller, and it is only applicable if you’re intending on buying a resale flat.
This arrangement is often used by upgraders and right-sizers.
Who can use HDB’s contra facilities?
For the Contra Payment Facility, you must be eligible for and use an HDB housing loan for your new flat purchase. If you are not taking a housing loan for a new HDB flat, the Temporary Loan Scheme may apply instead.
For the Enhanced Contra Facility, you may use an HDB housing loan or no housing loan, but you cannot use ECF if you are taking a bank loan to finance the resale flat purchase.
In addition, for the ECF, only one party in the chain can be the contra party. This means if you are planning to use contra to fund your next purchase, your buyer and your seller cannot be using it.
You will need to confirm that this is agreeable with all parties involved, before you get started on anything.
| Condition | Contra Facility | Enhanced Contra Facility |
|---|---|---|
| Financing for the new purchase | Must be an HDB housing loan | HDB housing loan or no housing loan; you cannot finance the purchase with a bank loan |
| Who can use contra | You can use it, since HDB is the seller | Only one party in the chain (you, your buyer, or your seller) can use it |
| Funding sufficiency | You must be able to cover the full purchase price using your CPF, cash, sale proceeds, and your maximum HDB loan combined | You must be able to cover the full purchase price using your CPF, cash, sale proceeds, and your maximum HDB loan combined |
| Bankruptcy status | You must not be an undischarged bankrupt, or have bankruptcy proceedings commenced against you | You must not be an undischarged bankrupt, or have bankruptcy proceedings commenced against you |
How long does the entire end-to-end contra process take?
The timeline for CF and ECF differs, so it depends on which facility you’re using.
Timeline for the Enhanced Contra Facility (buying a resale flat)
Most contra transactions would run somewhere between 3 to 5 months, from the day you list your flat, to the day you collect the keys to your next one.
The key variable factor, however, isn’t HDB’s processing time. It’s how long you take to find a buyer for your flat and how long you take to find your next flat, all within a compatible timeline.
Here’s a rough timeline estimate for the ECF process:
| Phase | What happens | Typical duration |
|---|---|---|
| 1. Find a buyer for your flat and find the flat you want to purchase | You’ll have to market and sell your current flat first. Once your buyer has exercised the Option to Purchase (OTP), then you can commit to exercising the OTP on your next flat. | 4-8 weeks, highly variable |
| 2. Submit resale applications | You, your buyer, and your seller must submit both resale applications within 7 days of each other, indicating the request for contra/ECF in the application. | Must be done in the same week (within a 7-day window) |
| 3. HDB review and approval | HDB will review the applications to verify your eligibility, funding sufficiency, and ensure that no other party in the chain is also claiming contra. | 2-4 weeks |
| 4. Flat inspection | HDB (and you, for the flat you’re selling) will arrange inspections of the outgoing flat. | Within the review window |
| 5. Endorsement of documents | All parties will have to endorse the resale documents via Singpass. | 1-2 weeks |
| 6. Completion | Both transactions will be completed on the same day — keys handed over, keys collected, and funds settled. | 1 day |
Timeline for the Contra Facility (buying a new flat from HDB)
The timeline for this runs differently to that of the ECF, because the completion of your new flat is dictated by HDB’s construction schedule, not by the coordination of two resale transactions.
For the CF, you won’t need the sale of your existing flat completed before you collect your keys. Instead, you’ll be able to collect the keys to your new flat once HDB has approved your resale application to sell your existing flat.
However, once you’ve collected the keys to your new flat, you must complete the sale of your existing flat within 6 months.
The overall timeline will depend largely on when your new flat is ready for key collection and when you secure a buyer for your existing flat.
There is no fixed timeline for the entire process.
Here’s how it will look like:
| Phase | What happens | Typical duration |
|---|---|---|
| 1. Track your flat’s completion date | HDB will give an Estimated or Probable Completion Date (ECD/PCD) for your BTO/SBF flat, which will be firmed up closer to completion. | Announced a few quarters or years ahead; confirmed 1-2 months before key collection. |
| 2. Market your existing flat | Buffer some time for yourself to find a suitable buyer before your key collection date. | Recommend starting around 3-6 months before your expected key collection date. |
| 3. Submit your resale application, along with the contra request | Indicate your request for the Contra Facility alongside your resale application to sell. | Once you have your buyer lined up |
| 4. HDB approves your resale application | This approval makes you eligible to collect your new keys. | 4-6 weeks after submission |
| 5. Collect the keys to your new flat | You can begin renovations while the sale for your existing flat is still being finalised. | On or after resale approval date |
| 6. Complete the sale of your existing flat | You must adhere to this strict deadline, it’s not a flexible target. | Must complete within 6 months of key collection to your new flat. |
Challenges with HDB’s contra facility
The challenges with HDB’s contra mostly lies with the enhanced contra facility.
With multiple parties involved, getting everything to sync up nicely into a cohesive timeline can be quite a challenge.
Here are some issues that might cause a potential delay:
Missing the 7-day submission window
If all parties don’t submit the resale applications within 7 days of each other, the contra request is cancelled and you’ll have to restart the process.
Funding shortfall
If your combined CPF, cash, and maximum HDB loan doesn’t cover the purchase price of your next flat, HDB will ask you to top up payment for the remaining amount before approving.
Chain breakage
Contra links your sale and purchase together.
This means that if something goes wrong with either transaction – such as financing falling through or a buyer or seller backing out – it can affect both your sale and your purchase, rather than just one side.
Under the ECF, the sale of your existing flat must legally complete before or on the same day as your purchase – so a delay on the sale side can hold up your purchase, not just inconvenience you.
Not securing an extension of stay early
If you need a short buffer after completion, make sure you negotiate for it during the OTP stage, before you commit to the transaction.
What are the costs involved for HDB’s contra facility?
Contra will help to reduce your cash outlay, but it doesn’t eliminate it completely. You’ll need to budget separately for:
Option and exercise fees
When you intend to purchase a resale flat, the Option Fee must be paid to the seller in cash when they grant you the Option to Purchase (OTP). It must range between $1 and $1,000.
If you choose to go ahead with the purchase and exercise the OTP within the 21-day validity period, you’ll also need to pay the seller an Option Exercise Fee in cash. The sum of this fee and the Option Fee must not exceed $5,000 in total. These payments cannot be paid using your CPF.
Request for Value fee
If you’re using your CPF savings or a housing loan for your resale flat purchase, you have to submit a ‘Request for Value’ to HDB the next working day after receiving the OTP. This processing fee costs $120 (including GST).
Resale application fee
When you submit your resale application, you’ll also be required to pay an administrative fee of $80 for flats that are 3-room and bigger, or $40 for flats that are 1-room and 2-room.
Buyer’s Stamp Duty (BSD)
You’ll need to take note of the Buyer’s Stamp Duty, which can be paid from your CPF OA, but not from your contra sale proceeds or CPF refund.
Find out how much BSD you might be liable for in our post here.
Legal or conveyancing fees
For both transactions – the sale of your existing flat and purchase of your new one.
For contra, expect to use HDB’s solicitors rather than your own. This typically works out to roughly $1,000 to $1,500 once the fee for acting in the purchase and the fee for acting in the mortgage are added together.
You can check your estimated HDB legal fees here.
HDB’s ECF terms state that where private solicitors have to be engaged, or where there is a bank mortgage or CPF charge on either flat, HDB reserves the right not to approve the ECF application. Confirm your solicitor arrangement with HDB before appointing anyone.
Here are some rough estimates:
- Buying (with a mortgage): $1,500 – $3,500
- Selling (with mortgage discharge): $1,500 – $2,800
- A combined package for simultaneous sale and purchase (contra): $3,500 – $5,500 in total
Resale levy
The resale levy is triggered by what you buy next, not by what you sell.
You’ll only pay it if your next purchase is a second subsidised flat – a new BTO or SBF flat from HDB, or a new EC from a developer. If you’re buying a resale flat on the open market, there is no resale levy, even if you’re using a CPF Housing Grant.
In practice, this means the levy is a cost to budget for under the Contra Facility (buying new from HDB), but not under the Enhanced Contra Facility (buying resale).
It’s a fixed amount based on the type of flat you’re selling, ranging from $15,000 for 2-room flats to $55,000 for ECs — check out our full guide here on the resale levy to find out more.
Can you continue staying in your flat after completion?
As you’re timing your sale and purchase to complete together, you may need a short buffer period to move or renovate.
However, it is possible for you to negotiate it with your buyer using a Temporary Extension of Stay (EOS), and remember to do this earlier on to avoid any misunderstandings or delays.
This can be agreed upon with your buyer as part of the Option To Purchase (OTP) terms, and will let you better manage timelines.
How much can contra reduce your cash outlay and housing loan?
Let’s work out the math for this using an example. If you’re selling your current flat for $600,000 and buying your next one for $750,000, here’s how it will compare:
What your sale actually gets you
| Item | Amount |
|---|---|
| Sale price | $600,000 |
| Less: Outstanding HDB loan | $150,000 |
| Less: CPF refund + accrued interest to OA | $130,000 |
| Cash proceeds you’ll receive | $600,000 – ($150,000 + $130,000) = $320,000 |
What your next purchase requires
| Item | Amount | Typically paid using | Can you use your sale proceeds to offset this with contra? |
|---|---|---|---|
| Option + exercise fees | ~$5,000 | Cash | No |
| Legal and conveyancing fees | Varies | Cash and/or eligible CPF savings | No |
| Buyer’s Stamp Duty (BSD) | ~$17,100 | CPF OA | No |
| Downpayment (25%, on HDB loan) | $187,500 | CPF OA | Yes |
The contra effect
In this example, your $320,000 in net cash proceeds and $130,000 in refunded CPF add up to $450,000 from the sale of your existing flat.
With ECF, these funds can be channelled towards the purchase of your $750,000 resale flat instead of waiting for the sale to complete separately before using them.
HDB requires you to use your available CPF OA savings and CPF refunded from the sale that are available under ECF before using the cash proceeds from your sale.
If the full $450,000 in our simplified example is available and applied towards the $750,000 purchase, the remaining amount to finance would be around $300,000, before taking into account any other available CPF savings, grants or payments.
This can significantly reduce the housing loan you need and, consequently, your monthly mortgage repayments.
However, contra does not mean you have no other upfront costs.
You should still budget separately for expenses such as your Option and Option Exercise Fees, Request for Value fee, resale application fees, stamp duty, legal fees and any Cash Over Valuation (COV), where applicable.
The main benefit of contra therefore isn’t that it “saves” you $450,000.
Instead, it lets you use money that would otherwise only become available after selling your existing flat towards your next purchase as part of a coordinated transaction.
How to apply for HDB contra
1. You have to first decide which contra facility applies to you.
If you’re purchasing a new flat, then you’ll request for a contra facility, if you’re purchasing a resale flat, then you’ll request for the ECF.
2. Next, you’ll have to sell your current flat.
Get your buyer to exercise the OTP on your flat before you exercise your OTP on your new one – this helps to protect you from committing to a purchase before your sale is even secured.
3. Confirm that there are no conflicts within the chain.
Double check with your buyer and seller that they won’t be applying for contra on their own transactions.
4. Submit resale application.
Submit your resale application and indicate your request for contra accordingly, or have your appointed property agent submit it on your behalf.
You, your buyer, and your seller must submit both resale applications within 7 days of each other.
Remember to provide your supporting documents promptly, else that will lead to further delays.
Once that has been completed, HDB will review your eligibility and funding, and arrange the necessary flat inspections.
Once all parties involved have endorsed the documents, you can book and attend your appointment at HDB for completion. Both your sale and purchase transactions will be settled on the same day.
Pros and cons of an HDB contra
Still undecided or cautious about using contra? Let us weigh the pros and cons to help you better understand the risks involved.
| Pros | Cons |
| • No dilemma over whether to sell first or buy first • Reduces the cash and loan quantum you need upfront • Lowers your monthly mortgage significantly, or eliminates it completely if your sale proceeds are sufficient • No need for a bridging loan |
• ECF cannot be used if you take a bank loan for your resale purchase, while the Contra Payment Facility requires an HDB housing loan • Requires tight timeline coordination across three parties • Any problem that arises affects both transactions • Doesn’t cover BSD or legal fees, you still need to budget cash for those • Short 7-day window for submissions leave little room for error |
Should you use the HDB contra facility?
If you’d like to eliminate the arduous waiting period between receiving your sale proceeds and purchasing your next flat, using contra would be the preferable option.
This is of course assuming that your projected sale proceeds are substantial enough to offset the cost of your next flat purchase, and that you have strong cash and CPF reserves.
However, if you don’t want the headache of having to deal with multiple parties and factors involved in the contra transaction chain, want more control over your loan options, and prefer to not risk having both your sale and purchase combined in one transaction – then contra might not be ideal for you.
Are there any alternatives to using HDB’s contra facility?
If contra still doesn’t sound like an attractive option to you, here are some alternatives you can consider.
Sell first, rent in between
You may choose to sell your property first and get the full sales proceeds. Once you have this, you can rent while looking for your next home.
This provides you with breathing room and gives you more control over the timeline and flexibility without rushing into buying your next property.
Buy first, and bridge the gap
You can opt to get a bank bridging loan, which is a short-term loan that allows you to bridge the cash gap between purchasing and selling your homes.
This will help to cover the downpayment for your new property while you wait for the sale proceeds from your existing flat to come through.
However, do note that it incurs higher interest rates than standard home loans, and is usually capped at 6 months.
Buy first, sell later with savings or cash on hand
If you have enough liquidity to cover both a downpayment and your existing mortgage simultaneously, without relying on your sale proceeds at all, this is an option you can explore.
Frequently Asked Questions
Can I use the HDB contra facility if I’m taking a bank loan?
No you can’t use the HDB contra facility if you’re taking a bank loan. It is a requirement for you to be using a HDB loan for your new purchase, or pay it in full with your cash and CPF.
Can I use contra if my current flat is fully paid off?
Yes you can use contra if your current flat is fully paid off. If your flat does not have an outstanding loan, you will be able to get your full sale price (excluding your CPF refund amount) paid to you as cash proceeds, which can be use for contra for your next purchase.
Does contra cover stamp duty and legal fees?
Contra does not cover stamp duty and legal fees. You will need to set aside separate cash or funds in your CPF OA account for these fees.
What if I’m 55 or older – does contra still work the same way?
The mechanism will work the same way. However, when you sell your flat at 55 and above, the CPF refund doesn’t flow into your next purchase automatically. Some of it might get diverted to top up your Retirement Account (RA) first.
As this will affect how much you have available for your next purchase, it’s best to talk to an experienced property agent to run through these numbers with you.
What happens if my sale falls through after contra is approved?
As your sale and purchase transactions are linked and dependent on both transactions, if the sale collapses, it will affect your purchase too.
Do I pay ABSD if I’m selling one HDB and buying another?
If you’re selling your existing HDB flat and buying another HDB flat, you generally do not have to pay ABSD upfront simply because you still own your existing flat at the point of purchase.
This is because eligible HDB buyers can receive upfront ABSD remission, as HDB rules require them to dispose of their existing residential property within the stipulated timeframe.
Using HDB’s Enhanced Contra Facility is therefore not what gives you the ABSD remission.
Instead, contra coordinates the sale of your existing flat with the purchase of your next resale flat, allowing your sale proceeds and refunded CPF savings to be channelled towards your next purchase.
Keen to find out more about contra or use it?
Contra can make your move much smoother – but only if your sale and purchase are timed properly.
With multiple OTPs, submission deadlines, and completion dates to coordinate, one mistake can affect both sides of the transaction.
This is why having an expert to rely on will help you immensely.
Our Real Estate Consultants at Propseller can help you plan both legs of the transaction together, rather than treat your sale and purchase as two separate jobs.
They’ll be right by your side from day one – helping you find the right buyer, sequencing your buyer’s OTP, assisting with your next flat search, and ensuring your contra submission and completion dates line up cleanly.
If you’re still weighing your options and can’t decide if contra fits your move, speak to our Real Estate Consultants at Propseller before you list your flat so we can better advise you.
We’d be happy to help!
