Does it make sense to pay stamp duty regardless of whether the buyer wants to proceed or if HDB approves the purchase?

You're right to question the logic. It would not make sense for buyers to pay stamp duty before they decide to buy, or before HDB approves the resale. In the case of an HDB resale flat purchase, Buyer's Stamp Duty is paid only after the buyer exercises the Option to Purchase and receives HDB's in-principle approval. This means there is already a clear intent to buy, and both parties are moving ahead with the transaction.

Stamp duty is generally required so that the transaction can be completed—especially if a loan is involved, as the bank or HDB will need to see proof of stamp duty payment before they release funds to complete the purchase. If the buyer eventually does not proceed (for example, if the transaction fails before completion), the buyer may be able to apply for a refund under special circumstances.

So, stamp duty is not paid at the very beginning. It's paid after exercising the OTP and HDB gives in-principle approval, which means the buyer and seller have both agreed, and the chance of the deal not going through is low. This system helps ensure stamp duty is not paid unnecessarily by buyers who are not ready or by deals that are not approved.