All Singaporean families buying a Housing Board (HDB) resale flat near or with their parents or married children will receive a new $20,000 grant, regardless of their income level and whether they have received housing subsidies before.
Eligible singles now get $10,000 if they buy a resale flat with their parents.
Details of the Proximity Housing Grant (PHG) and other housing policy changes were released by the Ministry of National Development (MND) and HDB yesterday, after Prime Minister Lee Hsien Loong announced the moves at the National Day Rally on Sunday.
Kicking in yesterday, it is the latest move to help families live closer together.
Under the PHG, resale buyers receiving a subsidy for the first time get $10,000 more than what they would have received under the previous Higher-Tier CPF Housing Grant. Singles get $5,000 more than before.
The Higher-Tier grant, which was only for first-timers buying resale flats with or near their parents or married children, will be discontinued.
The PHG is open to buyers previously ineligible for grants. These include private property owners who have to sell their property within six months of buying the resale flat.
Buyers can get the PHG only once. Grant recipients and their parents or married children must live near or with each other for at least five years afterwards.
Property experts believe the move could boost transaction volumes in the sluggish resale market. But R'ST Research director Ong Kah Seng said: "It is unlikely to have a major impact on resale prices as (loan curbs) can effectively curb lifting of prices by sellers."
At the rally, Mr Lee also announced that the income ceiling for HDB flats will be raised from $10,000 a month to $12,000, and for executive condominiums, from $12,000 to $14,000.
"With more couples hitting the income ceiling at a much quicker rate, the rise in the ceiling is welcome news to us," said operations manager Ken Lee, 30, who is applying for a Build-to-Order (BTO) flat with his girlfriend, a 27-year-old accountant. Their combined pay is $1,000 above the old ceiling.
The new income ceilings, effective as of yesterday, apply to those buying new homes, as well as those who qualify for the CPF Housing Grant to buy resale flats and the tiered CPF Housing Grant for executive condominiums.
This will likely boost resale transaction volumes, according to ERA Realty key executive officer Eugene Lim. But he added: "Prices are unlikely to spike as negotiations focus more on prices that were transacted recently, rather than future prices."
The income ceiling for singles buying new two-room flats has been raised accordingly from $5,000 to $6,000, half the overall ceiling for HDB flats.
Also announced were wider eligibility and larger sums of the Special CPF Housing Grant (SHG), for lower and middle-income first-time BTO buyers.
From the next BTO launch next month, the maximum SHG will be $40,000, up from $20,000.
Households earning up to $7,000 a month will get the full $20,000 increase. Those earning more than $7,000 and up to $8,500 are newly eligible. They will get $5,000 to $15,000.
Together with the existing Additional Housing Grant of up to $40,000, low-income first-timers could get up to $80,000 in grants.
Some new two-room flats cost even less. When the grant amount exceeds 95 per cent of the BTO price, buyers must pay 5 per cent of the flat price in cash or using Central Provident Fund (CPF) savings.
For instance, for a $75,000 flat, they have to pay only $3,750.
Any excess grant amount can be used to pay for optional items such as flooring, or will go into buyers' CPF.
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