COS 2015 - Helping Singaporeans Own Their Homes And Build Strong Families

Minister for National Development Khaw Boon Wan said in Parliament today that public housing affordability has improved since 2011, and efforts to tame the housing market have seen results. The housing market is still in transition. The Ministry of National Development (MND) will continue to monitor the market closely and work towards a soft landing. Through the lens of five Singaporean families, Minister Khaw outlined the following plans to help Singaporeans own their homes and build strong families. Key highlights are at Annex A.

I. A Home for Life

First, a home for life. The HDB flat is both a home and an asset which Singaporeans can monetise in their old age to supplement their retirement income.

With effect from 1 April 2015, we will implement four previously announced enhancements to the Lease Buyback Scheme (LBS).

a) The LBS will be extended to elderly households in 4-room HDB flats.

b) The qualifying household income ceiling will be raised from $3,000 to $10,000 per month. The income ceiling for the Silver Housing Bonus will be raised from $3,000 to $10,000 correspondingly.

c) For households with two or more owners, each owner will only be required to top up his or her CPF Retirement Account (RA) to the age-adjusted prevailing Basic Retirement Sum, instead of the age-adjusted prevailing Full Retirement Sum, hence allowing more upfront cash.

d) Elderly can choose the length of lease to retain, from 15 to 35 years (in 5-year increments), subject to the lease covering the youngest owner till age 95, instead of a standard 30-year lease.

These four changes will avail the LBS to more elderly households, and provide greater flexibility to suit different preferences and needs. Details on the LBS enhancements and other monetisation options available are at Annex B.

MND will also study a new 2-room flat scheme, offering varying lease tenure and lease terms, to cater to the needs of different groups. When the Studio Apartment (SA) scheme was introduced in 1998, it provided a smaller flat option for seniors who wanted to right-size, as HDB had stopped building small flats then. Since 2006, HDB has re-introduced new 2-room flats. The new scheme, if implemented, will unify the existing SA and 2-room schemes.

To help more Singaporeans own an HDB home, MND will look into how to help those who marginally exceed the current income ceiling. MND last raised the income ceiling in 2011. To date, this has helped 18,800 more households purchase subsidised HDB flats and Executive Condominiums.

II. One Family, Two Flats

Second, one family, two flats. Helping extended families live together or close by, for mutual care and support, continues to be a priority.

MND will study whether to further help extended families who wish to buy a resale flat to live with or near one another, a feedback some Singaporeans have raised at the series of Housing Conversations on “Closer Families; Strong Ties” which MND held last year. This will be on top of recent enhancements which apply largely to BTO flats.

In November 2014, MND enhanced the Married Child Priority Scheme (MCPS) to a quota-based scheme where up to 30% of the flat supply for first-timer families, and up to 15% of the flat supply for second-timer families are is set aside for those applying to live with or near their parents/married child.

At the same time, MND also launched 56 units of Three-Generation (3Gen) flats in a mature estate at Tampines North in the November 2014 BTO exercise. We will launch another 50 3Gen flats in Tampines in May this year. More details on existing schemes and initiatives to encourage mutual care and support are at Annex C.

III. Single and Secure

Third, single and secure. While marriage and parenthood will remain at the core of our housing policy, MND will help more single Singaporeans own their homes.

With effect from the May 2015 BTO exercise, up to half of the 2-room flats in the non-mature estates in each BTO launch will be set aside for single Singaporeans, up from 30% currently. The higher quota will help provide greater assurance to singles and reduce the demand backlog. More details are at Annex D.

IV. A New Beginning

Fourth, a new beginning. MND will continue to find ways to meet the housing needs of vulnerable families, including divorced and widowed parents, and help them start afresh.

MND will look into new measures to help divorced and widowed parents with children own their homes. Over the last three years, MND has improved support for divorced couples by reducing the time bar within which only one party can own a subsidised flat from 5 to 3 years, waiving the need for a divorced parent with custody, care and control of all children below 18 to get the ex-spouse’s consent to buy a subsidised flat, and introducing priority for divorced and widowed parents applying for a new flat with their children under the Assistance Scheme for Second Timers (Divorced/Widowed Parents). Details are in Annex E.

V. From Tenant to Owner

Fifth, from tenants to owners. For Singaporeans who cannot afford a home immediately and have no family support, MND provides heavily subsidised quality public rental flats, not as an alternative or substitute, but as a stepping stone to homeownership.

As part of a more inclusive and compassionate approach, MND will study ways to help more public rental tenants own their homes, including those who have previously enjoyed housing subsidies, but now no longer qualify. This will include greater incentive for self-reliance, conditions to prevent moral hazard, and stronger social support to ensure that families are able to sustain homeownership. More details on existing schemes to help low-income families, including public rental tenants, own a flat are in Annex F.