Owners of five-room or larger HDB flats now qualify for Lease Buyback Scheme

SINGAPORE — When his daughter got married and moved out of his five-room flat in 2016, Mr Tang Lum Sui wanted to tap the Lease Buyback Scheme but was turned down, as his house was too big.

He does not want to rent out any of the rooms in the house, in which he lives alone, because he treasures his privacy. He does not want to move to a smaller flat either, because he loves his neighbours.

The new year, however, has brought a solution to his problem.

From Tuesday (Jan 1), the 68-year-old security officer will be able to qualify for the Lease Buyback Scheme, as the Housing & Development Board (HDB) has expanded it to include five-room and bigger flats.

The scheme, which was introduced in 2009, allows senior citizens to sell part of their flat’s remaining lease back to the government. It applies to homeowners aged 65 and above and who have a gross monthly household income of S$12,000 or less.

Previously, it was only for those living in four-room or smaller flats.

Now that larger flats are included in the scheme, the HDB noted that around 34,000 more households will qualify, bringing up the total number of eligible households to about 130,000.

Mr Tang, who now qualifies, plans to take advantage of the expanded scheme. He intends to use the funds from selling part of his flat’s remaining lease of 68 years to top up his Central Provident Fund (CPF) retirement account, and receive some cash.

National Development Minister Lawrence Wong first signalled of such an extension last August, a day after Prime Minister Lee Hsien Loong outlined in his National Day Rally speech the government’s plans to systematically upgrade older HDB flats.

Giving details of the extension on Tuesday, the HDB said households living in five-room and larger flats will qualify for a S$5,000 cash bonus on top of the proceeds they receive from the scheme, if their CPF top-up is S$60,000 or more.

Households living in four-room flats currently get a S$10,000 cash bonus if they top up S$60,000 or more, while those living in flats three-room or smaller get a S$20,000 cash bonus.

If the total CPF top-up is less than S$60,000, households living in five-room and larger flats will receive a prorated bonus of S$1 for every S$12 topped up.

Currently, households living in four-room flats get S$1 for every S$6 topped up, while households living in flats three-room or smaller get S$1 for every S$3 topped up.

To qualify for the scheme, homeowners cannot own a second property concurrently, and must have been living in the flat for at least five years.

As such, those who rent out their whole flat will not qualify. However, seniors can still rent out spare bedrooms to supplement their retirement income even if they take up the Lease Buyback Scheme.

There are no changes to these eligibility conditions, the HDB said on Tuesday.

The announcement has given 25-year-old Cheryl Teng some peace of mind.

She will likely move out of her parents’ five-room Pasir Ris HDB flat in two to three years after getting married, and she was initially worried about their retirement finances.

“I don’t think my parents will be keen to move out of their flat... The sense is that houses are getting smaller and smaller. Being able to keep the house under this scheme makes sense,” she said.

“It is something my parents will definitely consider. But we will also have to ensure that they won’t end up in a situation where they have nowhere else to be in the last few years of their lives.”