MORE elderly flat owners will be able to sell part of their lease back to the Housing Board (HDB) for retirement income under changes to the Lease Buyback Scheme announced yesterday.
Those who co-own flats can also unlock more cash upfront while putting less in their Central Provident Fund (CPF) Retirement Account. All owners can also choose how many years of their lease to keep, within limits.
Currently, they can retain only a 30-year lease. All flat owners will get a new option of keeping a 35-year lease. Depending on their age, they can reduce this to as little as 15 years for those aged 80 and older.
These changes, made in response to feedback, will take effect from April 1 next year, when the scheme will also be extended from three-room and smaller flats to include four-room flats.
However, National Development Minister Khaw Boon Wan said he does not expect the change to result in a spike in interest in the scheme, which has seen a low take-up rate since its launch in 2009.
About 800 households have taken part so far, and Mr Khaw told reporters at a media briefing: "I don't think it will be in the tens of thousands... a few hundred definitely, maybe a few thousand."
Under the scheme, flat owners continue to live in their flats and sell a portion of their remaining lease.
The changes mean that for households with two or more owners, each owner has to top up his CPF Retirement Account to only half of his individual age-adjusted Minimum Sum, using proceeds from the sale of the lease.
Previously, proceeds were first channelled to meeting the full Minimum Sum. With the changes, flat owners can get more cash upfront, capped at $100,000.
"We have always said that the Minimum Sum is enough to look after the basic needs of a couple," said Mr Khaw. Owners will also get a cash bonus if they participate in the scheme - $20,000 for three-room and smaller flats, and $10,000 for four-roomers.
Fearing that some owners might "just spend or invest (the proceeds) unwisely", Mr Khaw urged seniors to be prudent.
The Government will also raise the monthly household income ceiling from $3,000 to $10,000, making more seniors eligible.
The minimum age is 63.
With four-room flats included, 75 per cent of elderly HDB households could potentially take part in the scheme, up from 35 per cent now.
About 290,000 HDB flats are owned by Singaporeans aged 55 or older, and 80 per cent of these flats are fully paid for.
Mr Khaw said that the best option for elderly couples is to live with their children and rent out their flat. "Should you need it, the option is there... but most people do not need it."
Asked if five-room flats might qualify eventually, he said: "Let's do it for the four-room (flats) first."
Property experts welcomed the changes. PropNex Realty chief executive Mohamed Ismail Gafoor said of the scheme: "It is finally ready to take off."
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