Hong Kong’s “housing laboratory” is looking at following Singapore’s lead to waive a resale levy for the city’s elderly if they want to downsize their subsidised homes to save for retirement.
Outgoing Housing Society chairman Marco Wu Moon-hoi revealed on Wednesday that the initiative was under consideration.
Wu, who is due to retire next week, said the society would start discussing details of the plan with the government later this year. The non-profit organisation is the city’s second largest public-sector housing provider.
“For many retirees, when their children grow up and move out, they may not need to continue living in big flats,” Wu said. “But then you ask them to pay [the levy] to downsize their homes, of course they don’t think it will be worth it … If Singapore can do this and it has been going quite well there, why don’t we give it a try?”
Wu said this should be one of the priorities on the agenda of his successor.
Under the existing system, families within an income limit can buy subsidised flats at a discount on the market price. When they sell the flats, they need to pay back the discounted amount.
A new government scheme allows families to sell their subsidised flats to other eligible families – who have never owned a subsidised flat – without having to pay back the amount.
But after selling the flat, this family – because it has already owned a subsidised flat once – cannot buy another subsidised flat and will have to turn to the private market.
Wu said the society’s plan was to allow elderly households looking to downsize their homes to sell and buy within the subsidised market without having to pay back the discount.
“There is mutual benefit in this plan,” he said. “On the one hand, elderly families can make some money from downsizing for their retirement. On the other, families living in crowded environments can have bigger homes available.”
Lennon Choy Hung-tat, associate head of the University of Hong Kong’s real estate and construction department, said the plan could help increase the circulation of subsidised housing to serve more people in need.
He said the society could also consider ways to link the plan with the Mandatory Provident Fund.
Choy said a similar savings scheme in Singapore allowed people to retrieve pensions for housing down payments, but Hong Kong only allowed savers to withdraw the money after they reached 65. “It’s much more flexible than the Hong Kong scheme.”
This article Hong Kong Housing Society looks to Singapore in waiving resale levy for elderly first appeared on South China Morning Post