Lease Buyback expanded
Posted by Singapore Property Match on March 7, 2010
THE Lease Buyback Scheme will be expanded to include an additional 3,800 households of elderly folk.
It will now include people who have owned four-room or bigger flats. Previously, the scheme was restricted to those who own three-room or smaller units.
The HDB said in a statement yesterday that although these homeowners would have received substantial proceeds from the sale of their earlier flats, some could still be in need of help. They include those who may have downsized many years ago.
The second group added into the scheme are households with an outstanding mortgage exceeding $5,000 but who would be able to buy an immediate annuity under CPF Life for at least $60,000 with the HDB payout. Previously, the household had to have less than $5,000 outstanding on a home loan.
The changes, which were outlined in Parliament yesterday, kick in on April 1.
They will make 3,800 more elderly households living in three-room or smaller flats eligible for the scheme, said HDB.
This will bring the total number of eligible households to 34,800 – which is 82 per cent of elderly households in three-room and smaller flats.
The Lease Buyback Scheme started in March last year and helps the elderly sell their HDB flats to the Government for cash. HDB buys back the tail-end of a flat lease at market valuation, leaving a 30-year lease for the household.
For example, if a flat has 70 years left on the lease, HDB buys 40 years of the lease from the owner at market rate with the cash going into a CPF Life annuity in the owner’s name. He receives a monthly income stream for life.
To be eligible, a home owner must be 62 or over, own a three-room or smaller flat, have enjoyed only one housing subsidy and must have lived in the flat for at least five years. The household must also not have owned or currently own a private home and must not have a monthly household income exceeding $3,000.
Ang Mo Kio GRC MP Lee Bee Wah hopes to see the scheme extended to elderly households currently living in four-room flats.
Source : Straits Times – 6 Mar 2010
