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Should HDB resale levy be waived or tweaked for owners of older flats?

The issue of decaying leases for ageing Housing and Development Board (HDB) flats was thrown into the spotlight this week, after a TODAY reader, who has been living in his flat for nearly 40 years, urged the HDB to relook the resale levy which is imposed on those selling their flats. The levy is aimed at reducing the subsidy given for a second unit, ensuring a fairer allocation of subsidies.

Should HDB resale levy be waived or tweaked for owners of older flats?

A letter by a TODAY reader urging the HDB to waive the resale levy on his 1984 flat has stirred up a heated debate.

The issue of decaying leases for ageing Housing and Development Board (HDB) flats was thrown into the spotlight this week, after a TODAY reader, who has been living in his flat for nearly 40 years, urged the HDB to relook the resale levy which is imposed on those selling their flats. The levy is aimed at reducing the subsidy given for a second unit, ensuring a fairer allocation of subsidies.

The letter prompted a heated debate online, with some also writing in to Voices. 

Many TODAY readers noted that the writer’s flat would have been worth much more than his original purchase price in 1984 and questioned why he should have a second bite at housing subsidies without paying the levy. Others agreed with him, arguing that the fixed sums in the resale levy are hefty and blunt, and that the costs of Build-To-Order (BTO) flats now would mean that sellers of old flats would not get to keep much of the proceeds if they have to pay a resale levy. 

Policies are there to benefit the majority of people. There is no one size fits all solution. Sometimes policies are not in our favour when it comes to our turn to buy a house. Blame the timing? Best is to prepare ourselves to be self-sufficient and plan our assets from young. JACKY TAN

If the intention of resale levy is to stop property speculation, those who have resided in their flat for more than 30 years are no speculators. They should not be subjected to resale levy. SIMON PANZER

Bought a flat on the cheap, and now a new BTO project in prime area launches, he whines about not being able to profit as much, and proceeds to advocate change that could threaten the chance of young couples getting their first home. Classic boomer. ARTHUR ZHAO MING

I’m not sure why a lot of people are saying he will earn a lot of money. That may be true if he sold his house and migrated, but he is still going to buy another flat here. Please do the research, how much does he need to pay for the new BTO flat? I don't think he can earn much. KIMPONG NG

The resale levy is equitable. Many have yet to buy their first HDB flat. PETER NG

For a HDB unit bought 40 years ago, the resale price definitely won't be lower than the purchase price. However, it might not be sufficient to fully fund his new one. The writer paid for his HDB for 40 years, so he wants to switch to a new HDB and he feels the resale amount should enable him to pay in full for it. In short, he wants to have his cake and eat it. KATHY WOON TAN

I fully agree with this homeowner who has occupied his flat for 40 years. S$40,000 is a hefty sum to pay back to HDB, not forgetting he needs to fork out another hefty sum for renovation of his second new flat. As we age and sell our flat so as to reap a profit for our retirement, the high levy is too much for us, the old, to bear. Hopefully HDB could review the hefty levy and reduce it, especially for people who have reached 55 or 60 years of age. PETER HO

I am a first-time owner of a maisonette. I am going to be retired and need to downgrade to a four-room BTO. I need to pay a resale levy of S$50k which will eat into my sales proceeds which are meant for my retirement. Please reconsider reducing this. TAN POH GUAN

Making hundreds of thousands from heavily subsidised HDB flats is still not enough for him. He wants to be able to make more. Only in Singapore is one able to make hundreds of thousands in profits from publicly subsidised HDB flats at the expense of taxpayers, future generations and those who are not allowed to purchase HDB flats. ANNA HAND

Can the HDB relook the resale levy if we have already lived in our flat for over 20 years? I didn't have any HDB grant during my purchase so the levy of S$50,000 is a lot of money for my next BTO as a second-timer. Worse, regardless of whether I downgrade or upgrade, the levy is the same amount. JOYCE ONG

He wants to be subsidised fully twice when some people who buy resale don’t qualify for any single subsidies even once. This is just greed. WAISEE CHEN

I agree with the writer that the resale levy should be waived or reduced for second time buyers of new BTO flats. Current BTO flats in mature estates are already very highly priced and beyond the reach of many homeowners living in old flats looking to change to new ones within the estate they are residing in. Many of them want to utilise their second chance to buy new BTO flats within the same estate but are financially put-off by the highly priced BTO flats and the levy they have to fork out.

It is high time that the HDB looks into the needs of second timers too as many are staying in old mature estate flats with maintenance issues. They should reduce the price of these new BTO flats and reduce or remove the resale levy so that second timers are able to utilise the benefit of buying a second BTO flat within the same estate as many are in their 50s or 60s and would not want to move to a new location. TAY GUEK PENG

The value of your house today cannot be less than the amount you bought for in 1984. The marginal difference cannot be merely S$40,000. Hence I don’t know what “financial blow” the writer is talking about. DARRYL DIAMOND LIMANSUBRONOTO

As first-time homeowners, we kept our flat even though prices were very good and we did not sell our flat for profit. I have lived in my flat since 1986 and thought of downgrading to stay with my unmarried daughter. But due to the resale levy, I am still considering it as our current flat’s size is very big and good for working from home. I sincerely hope the Government will give us sincere homeowners a chance to downgrade and have a smaller levy so that we will not have a financial burden and have some savings in our old age. PEGGY YEO

I am 54 years old and have lived in my Woodlands Drive 62 flat for 23 years. It’s my first and only BTO flat purchase. I genuinely want to downgrade to a smaller BTO flat but twice, my appeals for a waiver of the resale levy did not succeed. SUTRISNO AHAMED

To pay a levy of S$40,000 and be able to buy a new flat and possible further appreciation on the new flat is definitely very fair. Next, the levy will be able to benefit the next generation of HDB owners if they qualify for any grants. JASON LEONG

If the writer is concerned about the resale levy and high price of BTO now, then why sell? There is a lease buyback scheme where he will get some money back and not have to worry about depreciation. RICHARD WONG

 

These comments were first posted to TODAY’s Facebook page or sent in via email to Voices. They have been edited for clarity, accuracy and length. If you have views on this issue or a news topic you care about, send a letter to voices [at] mediacorp.com.sg with your full name, address and phone number. 

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HDB flat resale BTO Housing and Development Board

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