What Is an Option to Purchase, and What Does the Option Fee Buy?
An option to purchase is the seller's offer to sell at a set price for a set time. The fee pays for that time. How HDB, resale and new launches differ.
An option to purchase (OTP) is a seller’s written offer to sell you a property at an agreed price. The option fee pays for the right to decide within a fixed time. If you go ahead, the fee becomes part of your deposit. If you do not, you lose some or all of it.
Who grants it, and what it costs
The seller grants the option. On a new launch, the seller is the developer. As at October 2026:
| Fee | Time to exercise | If you do not exercise | |
|---|---|---|---|
| HDB resale | Option fee up to S$1,000, agreed with the seller | 21 calendar days, to 4pm on the last day | You lose the option fee only |
| Private resale (standard template) | Amount left blank for the parties to agree | Two weeks is one choice in the template | The option money goes to the seller |
| New launch from a developer | Booking fee of 5% to 10% of the price | 3 weeks from delivery of the documents | The developer refunds 75% of the booking fee |
HDB resale. HDB’s Important Notes on the Option to Purchase set the option fee at no more than S$1,000 and the deposit at no more than S$5,000. Neither the option fee nor the exercise fee can be zero. The gov.sg resale guide (updated 29 June 2026) gives the same range.
Private resale. The Digitalised Property Transactions Workgroup publishes a template (version 1.2, February 2021). Parties may change it. It sets no percentage for the option money, so ask what the fee is before you sign.
New launch. The Housing Developers Rules set the booking fee at 5% to 10% of the purchase price (rule 8). The option stays valid for 3 weeks after the developer delivers the title deeds and the agreement copies (rule 11). If you do not exercise, the form says the developer refunds 75% of the booking fee, so it keeps 25%.
Exercise, and what the fee is credited to
To exercise the option is to accept it in writing and pay the next sum. That makes a binding contract. On an HDB resale, you sign the Acceptance, deliver it to the seller and pay the option exercise fee. On a private resale, you sign the acceptance copy and pay a further sum.
The fee is not an extra cost. On both HDB and private resales, the option fee plus the exercise payment make up the deposit. On a new launch, you pay 20% of the price less the booking fee on exercise or within 8 weeks after the option date. The booking fee counts toward that 20%.
CPF cannot pay option fees. The CPF Housing Scheme terms (updated 7 September 2026) say CPF savings cannot pay option fees, for HDB or private homes. Plan to pay it in cash.
Stamp duty timing
IRAS lists acceptance of an option to purchase as a way of acquiring property. Its guide for properties (updated 14 August 2026) says that accepting an OTP, even by email, forms a document chargeable with stamp duty.
IRAS charges no penalty if you stamp within 14 days after signing in Singapore. The older IRAS BSD FAQ (version dated 28 October 2020) names the exercise of the OTP as the date of purchase. It adds that for an HDB flat, the 14 days run from HDB’s letter of in-principle approval. Confirm with HDB or your lawyer, because the FAQ is older. See our guide to BSD and ABSD.
Limits and exceptions
- The private template is optional, and parties may negotiate its terms. Read your own form.
- The developer figures apply to a “housing project”, which the Rules define as land with 5 or more separate residential units under construction or built.
- The HDB form in the notes took effect on 1 January 2018.
- This is a plain-words definition, not legal advice. Have your lawyer read the form before you sign.
