Starting from Jan 1 this year, the lease buyback scheme has been extended to 5 room HDB flats and larger units to enable seniors to monetise their homes while continuing to live there. The scheme was previously limited only to owners of four-room or smaller HDB flats.
File photo: HDB flats in Toa Payoh
To qualify for the scheme, all owners must reach the eligibility age of 65 years and have a gross monthly household income of $12,000 or less, with at least one of the owners being a Singaporean, and have at least 20 years of lease to sell. At the same time, they must keep a minimum of 15 to 30 years of lease, depending on their age.
Sellers will not be able to get the proceeds entirely back in cash after selling part of their leases as they must first top up their Central Provident Fund (CPF) Retirement Accounts to the higher Full Retirement Sum for their age cohort if they are the sole owners, or to the Basic Retirement Sum if there are two or more owners.
After that, households may keep the next $100,000 in cash. If there are proceeds leftover, owners have to top up their respective Retirement Accounts to the prevailing Full Retirement Sum before keeping the balance in cash.
More than 80 percent of Singaporeans live in HDB flats of 99 year leasehold tenure after which they will be returned to the state at zero cost upon the end of their tenure.