Sunday, 18 October 2015

Fairer distribution of subsidies through HDB resale levy

Mr Richard Chan Yong Huat ("Have uniform HDB levy for second BTO flat purchase"; Sept 26) and Madam Liu Siok Ming ("Review HDB resale levy policy"; Forum Online, Oct 1) asked about HDB's resale levy policy.

Singapore citizen households enjoy a housing subsidy when they buy a new flat from HDB or a resale flat in the open market with a Central Provident Fund (CPF) housing grant.

Flat owners who have sold their first subsidised flat have to pay a resale levy when they buy another subsidised flat from HDB.

The levy reduces the subsidy on the second subsidised flat, so as to maintain a fair allocation of public housing subsidies between first and second-timers.

Owners can pay the levy when they sell their first subsidised flat, or choose to defer the levy, but with accrued interest, to be paid when they buy their second subsidised flat (before key collection).

HDB regularly reviews its policies to ensure that they stay relevant.

In 2006, we refined the resale levy policy to adopt a fixed levy amount instead of a percentage of the selling price of the first subsidised flat. This gives second-time flat buyers greater clarity on the levy payable and allows them to better plan ahead.

In August this year, a further refinement was introduced to help the elderly who wish to right-size to a smaller flat.

For those aged 55 and above who sold their first subsidised flat before March 3, 2006 and have not paid their resale levy, HDB will waive the accrued interest on their levy if they are buying a new two-room or three-room flat. They need pay only the graded resale levy, without the interest accrued.

As an example, the interest on Madam Liu's resale levy will be waived should she decide to right-size to a new two-room or three-room flat. She could also consider buying a two-room flexi flat on short lease and pay a smaller, pro-rated resale levy.

In implementing our policies, we are mindful that there could be cases that merit special consideration.

We will look into the circumstances of each case and consider the best way to help our home buyers. Home buyers can approach our sales office or call us on 1800-866-3066 if they need advice on the housing options available to them.

Lily Chan-Wong Jee Choo (Mrs)
Director (Policy and Property)
Housing and Development Board
ST Forum, 17 Oct 2015

Have uniform HDB levy for second BTO flat purchase

I recently inquired with the HDB on the levy payable if I were to buy another new flat under the Build-to-Order (BTO) scheme.

I was informed that the amount payable is about $210,000 - comprising $116,250 (25 per cent of the sale price of my first flat bought in 1996/7) and accrued interest amounting to about $93,000 since the day I sold my first flat at the end of 2003.

The amount shocked me, as I had read that for a similar flat size, the levy payable, if one were to buy another BTO flat, is $50,000.

The HDB customer officer said that the $50,000 levy applies to those who had bought their flat from 2006 onwards and had sold theirs five years later to buy a second new flat under the BTO scheme.

Considering that flats built 10 years earlier in 1996 were significantly cheaper than those built in 2006, would the market subsidy that flat buyers enjoyed not be significantly lower than those of flat buyers who bought their new flats after 2006?

Paying a levy when one buys a second new flat directly from the HDB is equitable, but paying four times the amount, with interest continuing to accrue until a second purchase is done, seems rather unfair.

Perhaps the HDB could reconsider this current policy and make the levy payable uniform for all who qualify for a second BTO flat.

Richard Chan Yong Huat
ST Forum, 26 Sep 2015

Review HDB resale levy policy

I share the sentiments of Mr Richard Chan Yong Huat regarding the HDB levy under the Build-to-Order (BTO) scheme ("Have uniform HDB levy for second BTO flat purchase"; Sept 26).

My first home with my husband was a four-room flat, bought directly from the HDB.

We then sold it so we could upgrade to a resale five-room flat to accommodate our growing family.

I inquired with the HDB in March 2013 about downgrading to a BTO flat, now that my husband and I are approaching retirement age.

I was shocked to learn that the resale levy payable would amount to about $193,000, comprising $91,350 (22.5 per cent of the resale price of my first flat sale in December 1997) and accrued interest (5 per cent a year from December 1977 to March 2013).

I also learnt that the revised levy of $40,000 payable on a four-room first flat was applicable only to those who made the application to sell their first subsidised flat on or after March 3, 2006.

The high levy has made it difficult for my husband and me to downgrade. Perhaps, the authorities could consider the predicament of those like Mr Chan and myself.

Liu Siok Ming (Madam)
ST Forum, 1 Oct 2015

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