On 3rd September 2014, the Ministry of National Development (MND) and the Housing & Development Board (HDB) announced four enhancements to the Lease Buyback Scheme (LBS) with effect from 1 April 2015.
Only household with at least one of the owner a Singaporean and all owners must be at least at CPF Draw-Down Age in order to participate in this LBS.
Firstly, the LBS will be extended to 4-room HDB flats. On top of the proceeds the owners receive from selling the tail-end lease of their flat to HDB, they will receive a further $10,000 cash bonus per household if the total CPF top-up is $60,000 or more. If the total CPF top-up is less than $60,000, the household gets a pro-rated bonus of $1 for every $6 CPF top-up.
Secondly, the income ceiling for participating in the LBS will be raised from $3,000 to $10,000 per month. The income ceiling for the Silver Housing Bonus (SHB) scheme will be raised from $3,000 to $10,000 correspondingly.
Thirdly, each owner of a household will only be required to top up his/her CPF RA to half the age-adjusted prevailing CPF Minimum Sum (MS), instead of the full age-adjusted prevailing MS currently. Therefore, they will be able to retain more cash upfront from participating in the LBS. However, for any cash proceeds above $100,000, the owners will still be required to top up the excess amount into their respective CPF RAs. However, if you are a sole-owner of the HDB flat, this rule does not apply to you and you will still be required to top up your CPF RA to the full age-adjusted prevailing CPF MS.
Fourthly, 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 lived for at least 5 years and have at least 20 years of lease to sell to HDB to be eligible for the LBS.