178 Sign Up For HDB Lease Buyback Scheme

Source : The Business Times, April 20, 2009

Govt may consider making option available to 4 and 5-room flats too

THE Housing Board's Lease Buyback Scheme (LBS) has attracted interest from some 178 households since applications opened last month, and the government may consider extending it to include four-room and five-room flats later.

Speaking at an LBS outreach session in Ang Mo Kio yesterday, Prime Minister Lee Hsien Loong said that opting to join the LBS plan 'is an important decision which flat owners should consider very carefully'. 'Therefore, it is more important to help them understand the scheme so that they can make an informed decision,' he added.

The scheme, which aims to help the elderly monetise their flats, was first unveiled by Mr Lee at the 2007 National Day Rally.

Under the LBS plan, HDB will buy back the tail-end of a flat lease at market valuation, leaving a 30-year lease for the household.

So, for example, if a flat has a remaining lease of 70 years, HDB buys 40 years of the lease from the flat owner.

It pays market rate for the lease it buys and this money goes to the new CPF Life annuity in the flat owner's name.

In addition, the government will also provide a $10,000 subsidy for anyone eligible for the scheme who signs up.

Some $5,000 will be paid immediately in cash, while the other $5,000 goes into the CPF Life annuity.

If the LBS lessee dies before the 30-year lease period is over, his family members who are sharing the same flat can opt to live there for the remaining lease period, or return the flat to HDB for a refund.

Also, if there are beneficiaries of his annuity plan, they will be given the full refund of the unused premium from the annuity plan.

Prior to yesterday's event, HDB has conducted at least five other outreach programmes that 'managed to reach out to about 81 per cent of the eligible households'.

This scheme is available to about 25,000 low-income households in Singapore, and is currently only for those aged 62 and above and who own two- or three-room HDB flats.

Of these, some 2,800 are in Ang Mo Kio GRC, and another 800 in Yio Chu Kang, said PM Lee yesterday.

He added that some elderly owners of four or five-room flats have requested to join the scheme, saying 'this is something we can consider later on'.

More information on the scheme is available at www.hdb.gov.sg.