OWNERS of four-room Housing Board flats can now sell part of their lease back to the Government to supplement their retirement income, Prime Minister Lee Hsien Loong announced last night.
These apartments are now eligible for the Lease Buyback Scheme, which was previously restricted to three-room and smaller flats.
Introduced in 2009, the scheme lets older home owners sell part of their flat's 99-year lease back to the Government, keeping only a 30-year lease.
The proceeds are used to top up their Central Provident Fund Retirement Accounts, thus enabling them to receive larger monthly payouts under the CPF Life scheme.
The rest of the sales proceeds will go to the home owners as a lump sum in cash.
Mr Lee gave the example of a couple who own a four-room flat worth $450,000.
At age 65, if they have lived in the flat for 34 years, they still have two-thirds of the lease left.
"Let's say you live in this house for another 30 years. Then you really don't need the rest of the lease beyond that," said Mr Lee.
If they sell the remaining 35 years of the lease back to the HDB, they can receive $27,500 in cash and an additional $900 a month in CPF payouts. The change could improve the poor reception to the Lease Buyback Scheme since its launch in 2009. Up until January last year, only 471 households took part.
The rules were relaxed in February last year, allowing home owners who have enjoyed more than one housing subsidy and previous owners of private property to qualify.
Since then, another 312 households have signed up, according to a parliamentary reply last month.
Now, by extending it to four-roomers, more than half of all public flat owners here will qualify to monetise their flats through the scheme.
Flats are eligible if all the owners have reached the CPF draw-down age, which is 65 for those born after 1953. At least one owner must be a Singapore citizen, and the gross monthly household income must be no higher than $3,000.
The move to extend the scheme comes after feedback from the ground, said Mr Lee.
He added that in last year's Our Singapore Conversation exercise, many seniors living in larger flats wanted to be eligible too.
Other options such as selling their flat and moving into a studio apartment were attractive, but these older Singaporeans still preferred to grow old in their own homes.
Mr Lee said he fully understood this. "The surroundings are familiar, your old friends are around you. Your neighbours, you've known them for so long - you don't want to uproot yourself," he said.
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