In an era where the sale of second-hand condos is becoming a viable alternative to first-hand condos, which are continuously increasing in price, second-hand condos may be the answer for those looking for ready-to-move-in options in locations near the subway or in the city center. They can best meet lifestyle needs and daily living requirements. However, second-hand condos come with numerous detailed expenses, and here are important things that buyers of second-hand condos should know.

 

Buying a second-hand condo means lower loan amounts compared to first-hand condos

For purchasing a first-hand condominium, some buyers may be able to secure a loan for up to 100% of the appraised value. However, for second-hand condos, if applying for a loan through a bank, the loan amount will typically be around 60-80% of the appraised value. Therefore, buyers should prepare an additional 20% of the price. In some cases, buyers may be able to borrow more than the appraised value, depending on their financial capacity.

 

Buying a second-hand condo incurs a transfer fee of 2% of the full price

In some cases, the seller of a second-hand condo may cover the transfer fee themselves, which is already included in the sale price. However, generally, the transfer fee is 2% of the full price, and the buyer and seller will split this cost equally as per the sales agreement. Therefore, buyers should thoroughly research the transfer fee before proceeding with the purchase.

 

Buying a second-hand condo incurs business tax

For condominiums owned by the seller of a second-hand condo for more than 5 years or registered as the homeowner for at least 1 year, no business tax will be incurred. However, in other cases, a business tax of 3.3% of the full price will apply, typically designated for the seller to pay, and this is often included in the condo price. In some cases, the contract may specify that both the buyer and seller share this cost equally.

 

Buying a second-hand condo incurs a mortgage registration fee of 1%

If the buyer takes out a loan from the bank, they will need to pay a mortgage registration fee of 1% of the loan amount, which must be paid at the land office. The amount will vary depending on the loan amount secured from the bank.

 

Loan insurance for a second-hand condo

Loan insurance is meant to protect the home and serve as collateral in case the borrower passes away before repaying the loan or cannot fulfill the repayment obligations. Generally, banks will assess this on a case-by-case basis.

 

Utility deposit fees

For purchasing a first-hand condo, the buyer must pay for the water and electricity meter deposits, and this also applies when buying a second-hand condo.

 

Income tax

The income tax (transfer fee) will be calculated according to the regulations of the Revenue Department, and typically, the seller is responsible for this payment.