My last blog on choosing a HDB resale flat generated some discussion and debate. Let me share some additional perspectives.

HDB flats, like many private properties, are sold on a 99-year lease. They provide a good store of asset value, so long as you plan ahead, and make prudent housing decisions.

To begin with, Singaporean couples enjoy significant subsidies when they purchase a HDB flat for the first time, be it a new flat or one from the resale market.

Take for instance a 30-year-old couple, with a combined monthly income of $5,000, looking for a resale flat in Woodlands near their parents.

They can get up to $75,000 in grants off the resale flat price, and should easily afford a flat with a reasonably long lease of 90 years.

35 years later, the couple will be 65 and the remaining lease of the flat will be 55 years.

They still have an asset which can be monetised for retirement.

In fact, this is already happening in Woodlands.

A 65-year-old elderly couple living in a 4-room flat with 55 years of lease remaining in Woodlands can sell their flat and right-size to a nearby 2-room Flexi flat with a 30-year lease.

They can enjoy a Silver Housing Bonus of $20,000 in cash. They can also get quite a lot of money from the sale proceeds – around $100,000 upfront in cash, plus $500 per month of additional income for their retirement (on top of what they would get through CPF Life).

Alternatively, if they prefer to stay in the same flat, they can apply for the Lease Buyback Scheme or LBS. This means they continue living in the flat for 30 years and sell the remaining 25 years back to HDB. They can enjoy a cash bonus of $10,000. In addition, they will get $47,000 in cash plus $400 a month for retirement (again on top of CPF Life).

The cash amount is not as much as if they were to right-size, but that’s because they can continue to stay in the same flat, and also have the option to rent out a room.

I have given some simple examples. But they are typical of many HDB households.

The general point is that your HDB leasehold flat is not only a good home, but also a nest-egg for future retirement needs.

That’s what we have achieved and that’s what we will continue to ensure – both now and in the future.

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