For a small country like Singapore, housing can be a complex and challenging issue.
Prime Minister Lee Hsien Loong, in his 2018 National Day Rally speech, explained that HDB flats are sold on a 99-year lease to allow the Government to continually provide affordable new flats for future generations in land scarce Singapore. A 99-year lease means that the flat can be handed down one or two generations before it is returned to the state for redevelopment.
This is also essential so that we can re-plan and redevelop older towns to provide new amenities and infrastructure, and even introduce new town typologies.
99-year or shorter leases are not unique to Singapore, or to public housing. Cities like Hong Kong have residential properties sold on 50-year leases and Canberra has a 99-year leasehold system.
Since 1967, all sites for private residential land in Singapore have also been sold on leases no more than 99 years.
What happens if I outlive the 99-year lease?
Understandably, some are concerned about outliving the 99-year lease.
The 99-year-lease is needed to enable us to recycle our land to build flats for future generations.
The Government wants to ensure that every generation will be able to have an affordable and quality home in Singapore. Your children will be able to buy BTO flats with a full 99-year lease.
For the minority who may outlive your lease, the Government will ensure that no one will be left without a roof over their heads.
As the number of shorter lease flats increases in the market, flat buyers and owners need to do their part, to plan ahead and make prudent housing choices. One possible guide is to buy a flat with sufficient lease to cover you and your spouse till at least age 95. This would cover most of us for life and give us peace of mind in our golden years.
Helping older flats maintain their quality
Currently, the oldest HDB flats are around 50 years old.
As flats age, the Government will pay for upgrading to help maintain the quality of your flat.
Every HDB flat will be upgraded twice during its lease:
In about 20 years’ time, the Government will also begin to progressively redevelop older towns through the Voluntary Early Redevelopment Scheme (VERS) so that they continue to remain vibrant.
VERS is a voluntary scheme that will allow flat owners in selected precincts to vote on whether they want to let the Government take back their flats for early redevelopment. This will happen when the precincts are aged 70 years or older.
Read more about the difference between VERS and the Selective En bloc Redevelopment Scheme (SERS) here.
In addition, to give Singaporeans more flexibility, the Government has made changes to the CPF usage and HDB loan rules. Previously, the rules focused on the remaining lease of the property. Under the new rules, the total amount of CPF that can be used and HDB loan that can be taken depends on the extent the remaining lease of the property can cover the youngest buyer to the age of 95.
Helping you to unlock the value of your flat
You have various options to unlock the value of your flat
1. Rent out
2. Silver Housing Bonus
3. Lease Buyback Scheme