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Budget 2023 and you: What the measures mean for a young couple

SINGAPORE — Ms Nur Raihan Muhd Razali has been hunting for a home with her husband since they got married two years ago.

Ms Nur Raihan, 31, and her husband Mohamed Fareed, 35, welcomed the Budget 2023 announcements to help first-timers and young families get their first home.

Ms Nur Raihan, 31, and her husband Mohamed Fareed, 35, welcomed the Budget 2023 announcements to help first-timers and young families get their first home.

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  • Young mother Nur Raihan Muhd Razali has been looking to buy a home the last two years
  • New measures in Budget 2023 could increase the 31-year-old senior human resources executive's chances of securing a flat
  • However, she said that despite the increase in grants for resale flats, the affordability of resale flats would also depend on a few factors
  • Ms Nur Raihan welcomed the doubling of paternity leave, noting that her husband had to take unpaid leave previously to help with childcare duties
  • The Government’s increased contributions to the Child Development Accounts will also help her to offset childcare costs in future

SINGAPORE — Ms Nur Raihan Muhd Razali has been hunting for a home with her husband since they got married two years ago.

However, the couple has been unsuccessful so far.

Attempts to apply for a Build-to-Order (BTO) flat in areas near their parents' homes in eastern Singapore have been unsuccessful as their queue number to select a flat was too high, meaning that there were more applicants than flats. 

When Ms Nur Raihan got pregnant with her first child at the beginning of last year, she and her husband started to look for a resale flat so that they could have their own space once the baby came along.

Even then, prices were out of reach, said Ms Nur Raihan, who is currently living in her in-laws' flat in Eunos. 

For example, one seller of a three-room flat around the Kallang area wanted S$20,000 in cash over the flat's valuation.

The 31-year-old senior human resources executive said that she was unable to afford this.

She was therefore happy to hear about Tuesday's Budget 2023 announcements by Deputy Prime Minister and Finance Minister Lawrence Wong on the additional support for families with children as well as married couples aged 40 and below looking to secure their first home.

This includes an increase in the Central Provident Fund Housing Grant for first-timer families and priority for BTOs given to first-timer families with children.

Ms Nur Raihan said she and her husband, a 35-year-old delivery rider, will resume their search for a home again.

“Just now, after hearing the Budget, we actually thought of applying for a BTO again and see how the response is,” she told TODAY, adding that she is hopeful of having a better chance now.

She will also continue to look for a resale flat, although she said she is unsure of how helpful the increased grant would be given the hot property market.

She said that the affordability of resale flats would depend on how much cash couples like hers would have to pay upfront, and the amount they would have to pay to service their mortgage amid high interest rates.

PATERNITY LEAVE

On Tuesday, Mr Wong announced several other measures to help young couples start or expand their families.

These include doubling the paid paternity leave from two to four weeks from next year. For a start, the additional two weeks will not be mandatory for employers to provide and will be on a voluntary basis instead. 

Ms Nur Raihan said that the increased paternity leave would be especially helpful for parents who cannot turn to their own elderly parents for caregiving duties.

She said that her husband had to take one-month unpaid leave to assist her during her month-long confinement period after she gave birth in October last year. 

On top of his delivery rider duties, her husband was also working as a security officer.

“It was really tight for us financially, to be honest, as my partner didn’t earn any income during that point in time,” said Ms Nur Raihan.

CHANGE IN TAX RELIEF CALCULATION FOR WORKING MOTHERS

With an annual income of about S$40,000, Ms Nur Raihan stands to pay less tax if she has a second child following the move by the Government to provide tax breaks based on a fixed dollar relief rather than a percentage of a mother’s earned income.

Under the current system, Ms Nur Raihan would be entitled to tax relief of 20 per cent, which is equivalent to S$8,000 if she were to have a second child from next year.

This is S$2,000 less than what she will now get under the new system.

She said the new tax relief is "good" because she finds her taxes high, and "it’s a bit hard to cope with it alongside expenses for the baby”.

She spends about S$500 a month for child-related expenses such as milk and diapers. The savings from future tax breaks can go towards such expenses, and this is especially important given the current economic climate of high inflation, she added.

She also welcomed the Government’s increased contributions to the Child Development Accounts (CDA).

With the changes, the First Step Grant, which is the initial deposit into the account by the Government, will go up from S$3,000 to S$5,000 for each child.

The Government will also increase the cap in which they match the savings of parents under the CDA. This will apply to a family's first and second child.

Ms Nur Raihan said that some fees at infant care centres can cost up to S$2,000 a month before subsidies.

“So it helps that they are topping up the CDA. It will help to offset childcare centre fees (in future),” she said.

However, she is concerned that the additional top-up by the Government will not be enough by the time her child is ready to start school.

"In future, childcare centres might increase their fees to S$3,000 and that would be really expensive."

 

Click here for latest updates and reports on Budget 2023. 

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