An Option to Purchase (OTP) is the legally binding contract on HDB’s prescribed form that a resale flat seller grants to a buyer once they have agreed on a price.
Key takeaways
- The HDB-prescribed OTP is the only valid contract for a resale transaction — side agreements are not valid under the Housing and Development Act.
- The Option Period is 21 calendar days from the date the OTP is granted, including weekends and public holidays.
- The buyer pays the seller an Option Fee of between SGD 1 and SGD 1,000 when the OTP is granted.
- On exercising the OTP the buyer pays an Option Exercise Fee, which together with the Option Fee cannot exceed SGD 5,000.
- If the OTP is not exercised it lapses, the Option Fee is forfeited, and the seller has to wait for expiry before granting another OTP.
How the OTP works
- Buyer and seller agree the resale price, with the buyer holding a valid HDB Flat Eligibility (HFE) letter
- The seller grants the OTP and the buyer pays the Option Fee
- During the 21-day Option Period the buyer confirms the mode of financing and submits a Request for Value
- The buyer exercises the OTP by signing it and paying the Option Exercise Fee, or lets it expire
- Both parties then submit their portions of the resale application to HDB
Option Fee and Option Exercise Fee
The Option Fee is any amount between SGD 1 and SGD 1,000, negotiated between the parties and paid when the OTP is granted. The Option Exercise Fee is paid when the buyer exercises the OTP, and the two together cannot exceed SGD 5,000. Both fees form part of the resale price rather than sitting on top of it. Where the buyer does not proceed, the Option Fee is forfeited to the seller.
Getting the flat valued during the Option Period
A buyer using CPF savings or taking a housing loan submits a Request for Value to HDB by the next working day after the Option Date, attaching page 1 of the OTP. The processing fee is SGD 120 including GST, and the outcome is typically available within 10 working days and stays valid for 3 months. Buyers paying entirely in cash do not need a Request for Value.
Expiry and timing
The Option expires at 4pm, 21 calendar days after the Option Date. HDB’s worked illustration is an Option granted on 1 April expiring on 22 April at 4pm. The Option Period was lengthened from 14 to 21 calendar days from 5pm on 10 March 2014, when HDB began accepting valuation requests only after an OTP had been granted.
Key OTP figures
| Item | Figure |
|---|---|
| Option Period | 21 calendar days |
| Option Fee | between SGD 1 and SGD 1,000 |
| Option Fee plus Option Exercise Fee | not more than SGD 5,000 |
| Request for Value processing fee | SGD 120 (including GST) |
| Validity of the Request for Value outcome | 3 months |
Figures as at 2026. Source: HDB.
Worked example
A buyer pays an Option Fee of SGD 1,000 when the OTP is granted on 1 April, and the Option expires at 4pm on 22 April. On exercising it, the Option Exercise Fee is capped at SGD 4,000, so the two payments together stay within the SGD 5,000 limit.
Related terms
All Singapore glossary terms →Related calculator
Estimate what an HDB flat purchase would cost against income, CPF savings and loan limits.
This page is provided for educational and informational purposes only. It does not constitute financial advice. All figures and worked examples are estimates for illustrative purposes, are subject to change, and do not reflect any individual’s circumstances. Always refer to HDB and seek independent professional advice before making any financial decisions.