Lease Buyback Scheme open to all HDB flats

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Government also reviewing easing rules for using CPF savings to buy older flats

Elderly owners in all Housing Board flats - even those in five-room flats or executive maisonettes - can soon sell a part of their lease to the Government and use that income to fund their retirement years.

The Government is also looking to update rules so that people can dip more freely into their Central Provident Fund (CPF) savings when they buy older flats.

National Development Minister Lawrence Wong announced these moves in a blog post yesterday, a day after Prime Minister Lee Hsien Loong outlined the Ministry of National Development's (MND) plans to systematically upgrade older HDB flats.

Residents in selected precincts may even get to vote on whether to take up the Government's offer to buy back their flats.

"These are long-term plans, which will be implemented over several decades," noted Mr Wong.

"Meanwhile, MND will be making several shorter-term moves to help seniors unlock the value of their HDB flats for retirement."

Introduced in 2009, the Lease Buyback Scheme was restricted to four-room or smaller flats.

But Mr Wong said there are seniors who prefer to age in place.

"This (move) will enable many more Singaporeans to benefit from the scheme," he said.

Currently, to qualify for the scheme, home owners must be at least 65 years old and have at least 20 years of lease to sell to HDB, among other eligibility conditions.


The sale proceeds will be used to top up the owner's CPF Retirement Account.

The savings in the Retirement Account can be used to buy a CPF Life plan, which will give the owner a monthly income for life.

Part of the proceeds can be withdrawn in cash, if the owner meets his Retirement Account requirements.

The MND is also looking into how to let buyers of shorter-lease flats use more of their CPF monies for their purchase, without compromising on their retirement savings.

Improving the liquidity of the resale market for older flats, he added, would facilitate an elderly resident's move to a smaller unit.

Currently, CPF can be used for the purchase of older HDB flats but is subject to certain restrictions, which kick in when the remaining lease is less than 60 years.

For example, a home owner can use his CPF money if his age plus the number of years left on the remaining lease of the property is at least 80 years, but that too is subject to certain restrictions.

No CPF money can be used if the remaining lease is less than 30 years.

"These rules are meant to ensure that buyers purchase a home for life, without compromising their retirement savings," he said.

But there is "scope to provide more flexibility for buyers of shorter-lease flats while safeguarding their retirement adequacy".

About 2,500 families have taken up Lease Buyback Scheme

When former security officer Abdul Rahman Kemat sold more than half the lease on his four-room flat to the Housing Board, he saw two benefits.

The first - a good passive income on which he can retire.

Mr Abdul, 70, sold 46 years of his four-room Jurong West flat's lease - which had 81 years left at the time - to HDB for $144,000 two years ago.

He got about $36,000 in cash. The rest is paid out through Central Provident Fund Life plans, which provide him and his wife with a combined monthly payout of $1,000.

"I like that we don't have to worry too much about life," he said.

The other upside? "I don't have to live with my children," he joked.

Mr Abdul is among some 2,500 families who have sold part of their leases to HDB for retirement income since the Lease Buyback Scheme was implemented in 2009.

Yesterday, Minister for National Development Lawrence Wong announced that the scheme would be expanded to those living in five-room and larger flats.

Not everyone, however, is enticed by the scheme.


Hawker Choo S. S., 66, who lives in a five-room Ang Mo Kio flat with his wife, said he finds it hard to "give up" his flat - even though their two grown-up children have their own homes.

"If I need the money for retirement, I would rather rent out a room, or get a smaller flat," he said. - RACHEL AU-YONG