Annual value of up to $31k: Scheme for elderly to 'right-size' to HDB flats from private properties to be extended

More seniors who own private properties will be eligible for a scheme to supplement their retirement income when they move into a three-room or smaller HDB flat.

Speaking in his ministry's Budget debate on Wednesday (March 5), National Development Minister Desmond Lee said that the Silver Housing Bonus (SHB) will be extended to include seniors who own a private property with an annual value up to $31,000.

A property's annual value is the estimated rent a property can fetch in a year if rented out, and is determined based on market rents of comparable properties and other factors.

The SHB scheme - launched in 2013 - currently provides a cash bonus of up to $30,000 for those aged 55 and above who sell an HDB flat or a private property with an annual value of less than $21,000.

Lee said that from Dec 1, seniors whose private property has an annual value of between $21,000 and $31,000 will receive $10,000 if they "right-size" to a three-room flat.

This amount will be pro-rated at $1 bonus for every $6 that seniors commit towards their CPF Retirement Account. 

Seniors will receive up to $20,000 if they move into a two-room flat, he added.

More than 15,000 additional seniors can qualify for SHB with this extension, said the minister, adding that the scheme will cover more than three in four residential properties.

MND added in a press release that seniors moving from a private property to a 4-room or smaller HDB resale flat are exempted from the 15-month wait-out period.

While senior private property owners who wish to buy new BTO flats are subjected to the 30-month wait-out period, they are exempted if they right-size to a short-lease two-room Flexi flat or a Community Care Apartment. 

Other changes to SHB 

To qualify for SHB and its cash bonus, seniors who sell their existing property must currently commit to a net increase of up to $60,000 in their CPF Retirement Account after right-sizing, with the sum going towards their retirement payouts.

Minister Lee on Wednesday said that the amount can now come from the seniors' CPF housing refunds, which is credited to their CPF Retirement Account from the sale of their flat.

This means that seniors may no longer need to make a cash top-up to qualify for SHB.

From Dec 1, seniors who "right-size" to a two-room or smaller flat, including Community Care Apartments, will receive an additional $10,000 cash bonus from the scheme.

This brings the maximum SHB cash bonus to $40,000.

SHB changes 'not expected' to impact HDB resale market

The enhancements to the SHB are not expected to have a significant impact on the HDB resale market, said MND and HDB on Wednesday.

In a joint media release, they said there was "no spike" in resale prices of smaller HDB flats after SHB was introduced in 2013, and later enhanced in 2020 to increase the maximum cash bonus from $20,000 to $30,000.

MND and HDB said that there will be a "strong pipeline" of new flats, including 1,800 two-room Flexi and three-room flats for the upcoming July Build-To-Order sales exercise.

MND and HDB has also launched four Community Care Apartments, and said that they will continue to ensure a "steady supply" of such senior-friendly housing options.

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chingshijie@asiaone.com

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