Building Under Construction (BUC) properties and completed resale (EC and condo) units are the two types of new private properties in Singapore. BUC properties are projects which have not yet been finished or for which a Temporary Occupation Permit has not yet been acquired. Applying for a buc loan singapore may be a good option for people looking to buy properties that aren’t quite finished.
Before you apply for an Under-Construction Home Loan, there are a few things you should check with your builder.
- Check that your contractor has all of the required approvals in addition to the documents.
- Builders must obtain a commencement certificate as well as several other authorizations from local and other authorised bodies before beginning construction work on any building. Lacking these documents can cause delays in project finalisation, and even turn an otherwise legal project into an illegal one.
- Your contractor should be a licenced contractor.
- Payment Plan that is convenient for everyone.
- Your builder should provide you with a repayment schedule based on their estimates. If you try, this may be negotiable as well. It is critical to ensure that you do not pay the majority of the compensation before the task is finished.
The Loan Disbursement Process for Properties That Are Still Under Construction
Banks would not disburse the loan amount to the lender in one lump sum, but rather in instalments for an under-construction property loan. However, you may be required to pay the EMI on the sanctioned loan amount rather than the disbursed loan amount, but in the case of a home loan for a property under building projects, you must pay the EMI only on the disbursed sum or the involvement on your borrowed amount.
Tax Advantages for a Home Loan on a Pre-Construction Property
A home loan for an under building property can be asserted for tax benefits, but only after the builder issues the Occupancy Certificate or after possession is obtained.
The term of a home loan for under construction is usually divided into two parts. The “pre-construction period” refers to the time between the time the loan was obtained and the start of home construction. The timespan until the construction is completed or acquisition is created is known as the “Prior Period.” PPI refers to the interest paid on the loan during these two periods (Prior period Interest).
