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HDB sets in motion changes in housing loan rules to meet Singaporeans’ changing needs

The new rules on buying homes using CPF or HDB housing loans will focus on whether the remaining lease of the property can cover the buyer until they are 95, and will be implemented on May 10

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To take into account the changing needs and higher life expectancy of Singaporeans, HDB has put together significant changes in their housing loan rules to give buyers more flexibility when buying a home for life while safeguarding their retirement.

The new rules on buying homes using CPF or HDB housing loans will focus on whether the remaining lease of the property can cover the buyer until they are 95.

This was announced on Thursday (May 9) by the Ministry of National Development (MND) and Ministry of Manpower (MOM).

The changes, which apply to the purchase of HDB flats, private properties and executive condominiums, takes effect on Friday.

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Under the current rules, the amount of CPF allowed to be used is dependent on the remaining lease of the property. For instance, if there is at least 60 years left in the lease, a buyer can use the maximum CPF allowed to pay for the property.

If the property has less than 60 years left on its lease, a buyer is eligible to use CPF if his age plus the remaining lease is at least 80 years.

CPF withdrawal rules

After age 55, there will be changes to CPF withdrawals.

CPF members who want to withdraw their CPF savings above the Basic Retirement Sum will need to have a property with a remaining lease to cover them until at least the age of 95. This is to encourage CPF members to have “a home for life” and to secure a basic level of retirement income.

“This change is not expected to affect most CPF members, as all HDB flats and the vast majority of private properties have leases that can last a 55-year-old member until the age of 95,” the ministry added.

Currently, CPF members above 55 years old can withdraw CPF savings above the Basic Retirement Sum if they own a property with a remaining lease of at least 30 years.

The updated rules will apply to:

  • HDB flats: Flat applications received on or after May 10, 2019
  • Private properties and executive condominium units: Option to Purchase or Sales & Purchase Agreement signed on or after May 10, 2019
  • CPF withdrawals: Applications received on or after May 10, 2019

According to MND and MOM, buyers who purchased properties before May 10 but are still servicing their housing loans will not be affected by these changes. Likewise, members who bought their property and turned 55 years old before May 10 can continue to apply to the CPF Board to withdraw their CPF savings above their Basic Retirement Sum under the previous rules.

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