Category: Current Affairs
Published on Monday, 15 September 2014 00:00
There was more discussion in this week's session of parliament about the Ministry of National Development's Lease Buyback Scheme
. Here's some information about what was said within the house about the scheme and how it relates to Singaporeans.
1. Mr Png Eng Huat: To ask the Minister for National Development:
For the Enhanced Lease Buyback Scheme, whether HDB will consider relaxing restrictions on
(i) the sale and subletting of the flat; and
(ii) the minimum occupation period.
The Lease Buyback Scheme (LBS) provides seniors who wish to continue staying in their home, an option to monetise their flat for additional retirement income. If they have spare bedrooms, they can also sublet them after taking up the LBS. Those who wish to move out and sell or sublet their whole flat can already do so without the LBS. We do not have plans to relax the minimum occupation period which is applied to the purchase of all HDB flats.
2. Mr Png Eng Huat: To ask the Minister for National Development in respect of senior citizens who sign up for the Lease Buyback Scheme, what is:
a) their age profile; and
b) the lowest, highest, and average CPF LIFE payout as of 2014.
a) 1,083 senior citizens (in 812 households) have benefitted from the Lease Buyback Scheme (LBS) since 2009. 51% of them are aged between 63 and 70 years, 42% are aged between 71 and 80 years and 7% are aged 81 and above.
b) The lowest CPF LIFE monthly payout is $50, for an owner whose CPF top-up was low because the owner had a 5% share of the flat. The highest is $1,200. The average is $550. The monthly payout depends on various factors, such as when they joined the LBS, share of proceeds, and the starting balance in their CPF Retirement Account.
3. Ms Foo Mee Har: To ask the Minister for National Development what is the basis by which HDB determines the value of the lease under the Enhanced Lease Buyback Scheme when it purchases the lease back from flat owners.
1. The proceeds from Lease Buyback Scheme (LBS) is the market value of the flat with its full remaining lease, less the value of the first 30 years of lease retained by the household and any outstanding housing loan.
2. A professional valuer from HDB’s Panel of Private Valuers first assesses the market value of the flat with its full remaining lease, after a physical inspection of the flat and reference to recent comparable market transactions.
3. The value of the lease retained by the owners is determined from the market value of the flat based on industry-accepted standards and valuation practice. Adjustments are made to reflect restrictions placed on the LBS flat, namely no subletting of whole flat and no resale. Because of these adjustments, the LBS proceeds are higher.
4. Mr Baey Yam Keng: To ask the Minister for National Development with regard to the HDB Enhanced Lease Buyback Scheme (LBS):
(a) what options does the flat owner have if he outlives the 30-year lease;
(b) how can HDB provide greater assurance that these options will be honoured 30 years later;
(c) what will happen if a flat under LBS gets selected for the Selective En bloc Redevelopment Scheme; and
(d) whether the flat owner will receive the full proceeds in a lump sum should the flat owner's CPF Retirement Account meet the Minimum Sum.
1. Under the current Lease Buyback Scheme (LBS), owners retain a 30-year lease. Those who outlive the lease will not be left homeless. HDB will look into the circumstances of each case to work out an appropriate housing arrangement, taking into account the elderly’s health condition, financial status and the availability of family support. From April 2015, we will enhance the LBS to offer a 35-year lease option. Those who are concerned about outliving their lease can take up this longer lease option. Any unconsumed lease will be refunded to the estate.
2. LBS flat owners whose flats are selected for the Selective En bloc Redevelopment Scheme (SERS) will receive compensation based on the balance lease of their flat at the time of SERS announcement. They will also receive SERS rehousing benefits, which include an option to buy a new replacement flat with the same balance lease as their LBS flat, or a fresh 99-year lease, at a subsidised price.
3. Owners can retain LBS proceeds of up to $100,000 in lump-sum cash, after they top up their CPF Retirement Accounts. Currently, all owners top up to the age-adjusted prevailing CPF Minimum Sum (MS). From April 2015, we are relaxing the CPF top-up requirement for households with two or more owners to require each owner to top up to half the age-adjusted prevailing MS. They can retain any remaining proceeds of up to $100,000 in lump-sum cash.