Sinking Fund
What is a sinking fund?
A sinking fund is the reserve that a condominium's management corporation (MCST) must keep for major, long-term costs, such as repainting, major repairs and replacing lifts or other common property. Owners pay into it, alongside the management fund for day-to-day upkeep, in proportion to each unit's share value.
Key facts
- Required by
- The Building (Strata Management) Act 2004, section 38
- Pays for
- Painting, major repairs and improvements, renewal or replacement of common property, and buying movable property
- Separate from
- The management fund, which covers regular maintenance, insurance and running costs
- Who sets contributions
- The MCST, by ordinary resolution
- Each owner pays
- In proportion to their unit's share value
- Collective sale
- Can't be used for an en bloc sale (other than convening meetings); returned to owners on completion
As of 6 Nov 2026. Source: Singapore Statutes Online, BCA.
How a sinking fund works
Every strata development wears out: lifts need replacing and facades need repainting. The sinking fund spreads those costs across the years, so owners pay steadily instead of facing one large bill.
| Management fund | Sinking fund | |
|---|---|---|
| Covers | Regular maintenance, common expenses, insurance | Painting, major repairs, renewal and replacement of common property |
| Period | Liabilities over up to 12 months | Future, long-term liabilities |
| Paid by | Owners, by share value | Owners, by share value |
BCA reminds owners that, as members of the MCST, they must ensure sinking funds are collected regularly and adequately. In March 2026 BCA said its review of the Act includes helping MCSTs maintain adequate sinking funds as developments age.
Example
A 20-year-old condo needs lift modernisation costing $1,200,000. Its sinking fund has $700,000. These figures are for illustration.
| Item | Amount |
|---|---|
| Cost of works | $1,200,000 |
| Paid from the sinking fund | $700,000 |
| Shortfall to raise from owners | $500,000 |
| Your share, at a share value of 8 out of 1,000 | $4,000 |
A well-funded sinking fund would have covered this without the extra bill.
Common mistakes
- Choosing a condo for low fees alone. Low contributions can mean an underfunded sinking fund.
- Not reading the MCST accounts. Check the sinking fund balance and planned works before you buy.
- Assuming the fund pays out on en bloc. It can’t be used for the sale itself; only the balance at completion is returned to owners.
Frequently asked questions
What's the difference between the management fund and the sinking fund?
The management fund pays for regular costs: routine maintenance and repairs, common expenses and insurance. The sinking fund is for larger and future costs: painting, major repairs, and renewing or replacing parts of the common property.
What happens to the sinking fund in an en bloc sale?
Money in the management and sinking funds can't be used for the collective sale, except to convene the required general meetings. Whatever remains on legal completion is returned to the owners in proportion to the contributions they paid.
Can the MCST move money between the funds?
Money in the management fund that isn't needed for its liabilities can be transferred to the sinking fund. The sinking fund can only be used for its own purposes and the MCST's functions under the Act.
Related terms
Sources
- Building (Strata Management) Act 2004, sections 38 to 40 (Singapore Statutes Online)
- What to know as a condo owner (BCA)
- Strengthening Singapore's built environment (4 March 2026) (BCA)
Every figure on this page was checked against the official government sources above on 6 Nov 2026. See our editorial policy.
This is general information, not financial, legal or tax advice.