Today, the Ministry of National Development (MND) and the Housing & Development Board (HDB) announced four enhancements to the Lease Buyback Scheme (LBS). The enhancements will avail the LBS to more elderly households, and provide greater flexibility to suit different preferences and needs.
2First, the LBS will be extended to 4-room HDB flats. With this extension, the LBS will cover 75% of elderly HDB households compared to 35% currently. 4-room households will receive a $10,000 cash bonus per household when they participate in the LBS. This is on top of the proceeds they receive from selling the tail-end lease of their flat to HDB.
3Second, the income ceiling for participating in the LBS will be raised to $10,000, from $3,000 per month. The income ceiling for the Silver Housing Bonus (SHB) scheme will be raised from $3,000 to $10,000 correspondingly. The increase in income ceiling will allow elderly who are still working and/or living with their family members to qualify for these monetisation options.
Third, the requirement for households with two or more owners to top up their CPF Retirement Accounts (RA) with the LBS proceeds will be relaxed. Currently, about half of the LBS-eligible households have two or more owners. For these households, each owner will only be required to top up his or her CPF RA to half the age-adjusted prevailing CPF Minimum Sum (MS), instead of the full age-adjusted prevailing MS currently (see Table 1). They will be able to retain more cash upfront from participating in the LBS (see illustrative worked examples at Annex A
(PDF 148KB)). We will retain the $100,000 cap on the household’s cash proceeds by requiring owners to top up the excess of $100,000 into their respective CPF RAs.
Table 1: Change in CPF Top-Up Requirement* for Households with Two or More Owners
(0.5 x Age-Adjusted MS)
CPF Draw-Down Age
(now 63) to 69
70 to 79
80 or older
* Based on prevailing CPF MS of $155,000
5The relaxation in the CPF top-up requirement will provide greater flexibility to joint owners to decide how much of the LBS proceeds to retain upfront in cash vis-a-vis disbursed in a monthly income stream. With this relaxation, they can choose to retain more in cash. Alternatively, they can decide to use the cash proceeds to further top up their own CPF RA or the CPF RA of their spouse, beyond the minimum required up to the prevailing MS to get higher payouts under CPF LIFE.
6Fourth, elderly households will have the flexibility to choose the length of lease to retain, based on their age and preferences, instead of having one standard 30-year lease for all. Those aged 70 to 74 will have the option of a 25-year lease, those aged 75 to 79 will have the option of a 20-year lease, and those aged 80 or older will have the option of a 15-year lease. On the other hand, those who prefer longer leases can choose to retain more than the minimum required for their age, in 5-year increments, up to a maximum of 35 years. Any unconsumed lease will be refunded to the owner’s estate. A household must have at least 20 years of lease to sell to HDB to be eligible for the LBS. The lease options available are shown in Table 2.
Table 2: Options for Lease Retained
Age of Youngest Owner
CPF Draw-Down Age (now 63) to 69
70 to 74
75 to 79
25, 30, 35
80 or older
20, 25, 30, 35
The new LBS after the enhancements is summarised at Annex B
8The enhancements to the LBS were made in response to feedback received during the Our Singapore Conversation on Housing, where MND engaged Singaporeans, including the elderly, their children and experts, on monetisation options for the elderly.
9Together, CPF and home ownership form twin pillars of retirement adequacy for Singaporeans. Today, about 290,000 HDB flats are owned by Singaporeans aged 55 or older; 80% of these flats are fully paid up, with no outstanding mortgage loan. They have various options to monetise their housing asset for additional retirement income should they need or choose to. These include a) renting out a room, b) renting out the whole flat and moving in with their children, c) selling their flat and moving to a smaller flat or Studio Apartment with the option of the SHB, and d) the LBS. The LBS provides one option for the elderly to monetise their HDB flat to supplement their retirement income, while continuing to age in place in their own home.
10These changes to the LBS and SHB will come into effect on 1 April 2015, after computer system changes. MND and HDB will step up outreach efforts to help elderly households understand the changes, so that they are aware of the options that are available to them.
11In the meantime, the LBS will continue to be available to eligible elderly households in 3-room or smaller flats under existing terms until the changes are implemented. Applicants can apply online via the HDB InfoWEB using their SingPass, or approach any HDB Branch for assistance if they need help completing the application.
12For more information on the LBS, please call HDB Branch Service Line at 1800-225-5432 between 8.00am and 5.00pm from Mondays to Fridays.