Lease buyback scheme to be extended to all HDB flats
Elderly owners of large Housing and Development Board (HDB) flats can look forward to monetising their flat by selling part of their remaining lease to the government.
This comes as the Lease Buyback Scheme (LBS) will now be extended to all HDB flats, including five-room and bigger units, to enable more Singaporeans to benefit from the scheme, announced National Development Minister Lawrence Wong in a blogpost on Monday (20 August).
“The LBS is a good scheme but it only applies to those living in four-room or smaller HDB flats. The original thinking was that it would make more sense for those living in bigger flats to right-size,” he said.
“But there are seniors who prefer to age in place. Some also have grandchildren who come over to visit regularly, and would like a bigger space for the extended family.”
ERA Realty key executive officer Eugene Lim noted that the government heeded industry and public feedback to extend the scheme to all flat types.
“As public housing is for all, the choices available to monetise one’s flat should and rightfully has now been made available to all,” he said.
Lim believes the expanded scheme will allow cash-strapped owners of bigger flats to raise the funds required for urgent needs without selling their homes.
In view of Prime Minister Lee Hsien Loong National Day Rally announcement to systematically upgrade as well as progressively renew older HDB towns, Wong revealed that his ministry will also be making several short-term moves aimed at helping seniors unlock the value of their HDB flats for retirement.
“We are looking at ways to improve the liquidity of the resale market for older flats,” he said.
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“Currently, CPF can be used for the purchase of older HDB flats but subject to certain restrictions. These rules are meant to ensure that buyers purchase a home for life, without compromising their retirement savings.”
With this, his ministry is working with CPFB to review and update the rules to provide buyers of shorter-lease flats more flexibility while safeguarding their retirement adequacy.
“This is a very welcome move that is targeted at addressing the growing concern amongst HDB flat owners about their depleting leases and the difficulty of selling these flats due to the limitations placed by CPF on prospective buyers for the usage of CPF funds,” said Lim.
Coupled with HIP 1, HIP II and VERS announced by PM Lee, this is likely to “provide a much needed positive nudge to the otherwise lukewarm HDB resale market that was in recent months seem to be heading nowhere due to uncertainties that have not been addressed,” he added.
More: Can you afford an HDB flat? Check your affordability now.
Eugenia Rosaline Shlaen edited this story. To contact her about this or other stories, email eugenia@propertyguru.com.sg
