Deferred Payment Schemes Explained: How They Work for Property Investors (Updated)
- Stuart Chng
- Dec 25, 2025
- 5 min read
If you have been actively searching for an investment property over the past year, you may have noticed developers promoting various Deferred Payment Schemes (DPS). These schemes, once phased out in October 2007 during a strong economic and property upswing, have quietly made a return in more creative forms.
Recent developments such as 8 St Thomas, South Beach Residences, Brooks I & II, Reflections at Keppel Bay, The Crest, and Nouvel 18 have introduced rebranded versions of DPS. These are often marketed under names like “Stay and Pay Scheme,” “Reserve and Stay Scheme,” or “Reservation Scheme.” Despite the different labels, the core concept remains the same — deferred payment with adjusted timelines and fees.
Why Deferred Payment Schemes Are Back
The re-emergence of DPS reflects developers’ efforts to boost sales in projects that are slower to move or face pressure from Qualifying Certificate (QC) deadlines and Additional Buyer’s Stamp Duty (ABSD) penalties if units are not sold within a specified timeframe.
Previously, deferred payment options were limited to new launches, allowing buyers to postpone up to 90% of the purchase price until the project reached its Temporary Occupation Permit (TOP) stage.
Today’s DPS structures are different. They are only permitted after a project has obtained the Certificate of Statutory Completion (CSC), is de-licensed, and no longer regulated by the Controller of Housing. This gives developers greater flexibility in structuring payment terms.
How Deferred Payment Schemes Work
At their core, DPS arrangements differ mainly in:
The initial booking fee
The timing of option exercise
The length of the deferred completion period
Under a standard new-launch payment scheme, buyers typically:
Pay 25% upfront (5% cash, 20% cash or CPF)
Settle stamp duties within two weeks of exercising the Option to Purchase (OTP)
Begin progressive loan repayments 6–9 months later
Are unable to assign the OTP without incurring Seller’s Stamp Duty (SSD)
In a resale transaction, buyers also pay:
25% upfront
Stamp duties within two weeks
The remaining 75% loan within 10–12 weeks, after which monthly instalments begin immediately
Resale buyers may, however, resell their OTP before exercise if the clause “And/Or Nominee(s)” is included.
With DPS, developers can redesign payment structures to attract buyers with different financial goals — something made possible once projects are de-licensed.
Case Study 1: Upgrading Homeowners
Profile: Singaporean owner-occupier upgrading to a new home
John Tan wants to upgrade his family home but still has an outstanding mortgage. Under MAS financing rules, purchasing another property would require:
25% cash down payment
Another 25% in cash or CPF
A reduced 50% loan limit
Payment of ABSD
A deferred payment scheme with an extended completion timeline allows John to:
Reduce his upfront cash outlay to 10%
Move into the new home earlier
Gain sufficient time to sell his existing property
Eventually qualify for a 75% loan
Mitigate cash-flow strain during the transition
This approach was previously used in projects such as The Interlace and d’Leedon, making upgrading more manageable for homeowners.
Case Study 2: Investors Seeking Flexibility and Upside
Profile: Property investor expecting medium-term market upside
Dylan Lee wants to invest in income-generating properties but believes ABSD rules may be revised in the next two years. Rather than leaving capital idle, he prefers to deploy funds while maintaining flexibility.
With a DPS that allows:
Lower upfront cash commitment
Deferred exercise and completion
Immediate possession and rental income
Dylan can potentially benefit from:
Reduced ABSD exposure if policies change
The ability to sell within the deferred period without SSD
Rental income despite having no loan instalments during that period
Projects like The Peak @ Cairnhill I & II offered such structures, where buyers could rent out units immediately and exercise their OTP 18–24 months later. The inclusion of a nomination clause also allowed investors to assign the option to another buyer if market conditions improved.
This setup enhances return on equity while lowering overall investment risk, as rental income offsets holding costs and reduces effective entry price.
Key Considerations Before Choosing a DPS
While DPS can offer flexibility, buyers should always:
Compare prices against projects using standard payment schemes
Evaluate whether the DPS premium outweighs the benefits
Assess personal cash flow, loan eligibility, and exit strategy
Many DPS projects offer smaller discounts, so if the financial advantage is marginal, a conventional payment scheme may be the more prudent choice.
Final Thoughts
Deferred Payment Schemes can be powerful tools when used strategically, whether for upgrading homeowners or seasoned investors. However, due diligence remains critical to ensure the pricing and structure align with your financial goals.
If you would like to receive an updated list of projects currently offering Deferred Payment Schemes, feel free to WhatsApp me for the latest information.
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Stuart Chng, Executive Group District Director at Huttons, is a renowned leader and personality in the real estate industry.
He adores music and can play a few instruments decently without upsetting his neighbours. When not doing so, he enjoys pillow fighting with his son and coming up with silly puns which barely amuses his wife.
Professionally, he is a licensed real estate agent, avid investor in options, stocks and real estate, team leader, speaker and columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 8, PropertyReport, PropertyGuru and other publications.
Throughout his career, he has helped many clients grow their wealth through selecting great real estate investments and managing their portfolios actively. Read his clients' reviews here.
Stuart has also coached many top million dollar producing agents from top Singapore real estate agencies. Read his agents' reviews here.
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