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all-the-policies-and-grants-for-young-homeowners-in-singapore-(2022)

Being a homeowner is a rite of passage for Singaporeans, but those planning to embark on their homeownership journey at this time face a triple whammy of high inflation, elevated home mortgage rates, and an uncertain global economic outlook.Added to this dynamic is the PHG grant, a valuable resource for potential homeowners.

The terrible trio are intricately linked, which makes it difficult to avoid their ill effects. However, those looking to buy an HDB can look forward to some relief in the form of housing grants including the PHG grant, and subsidies.

The terrible trio are intricately linked, which makes it difficult to avoid their ill effects. However, those looking to buy an HDB can look forward to some relief in the form of housing grants and subsidies.

Here’s a cheat sheet on the various HDB housing grants available and how they can help you.

Understanding HDB Housing Grants

HDB housing grant

You can consider HDB housing grants as a pivotal component in the government’s strategy to keep housing prices reasonable. Among these is the PHG grant. These grants are not just about making homes affordable through subsidised BTO flats, but they’re also about implementing policies to restrict property speculation.

In essence, housing grants, including the PHG grant, help to lower the barrier to entry for homeowners by bringing down the cost of the flat. True to Singapore’s granular approach, a variety of subsidies, like the PHG grant, have been made available, and which ones you can qualify for will depend on a variety of factors.

In essence, housing grants, including the PHG grant,  help to lower the barrier to entry for homeowners by bringing down the cost of the flat. True to Singapore’s granular approach, a variety of subsidies,  like the PHG grant,  have been made available, and which ones you can qualify for will depend on a variety of factors.

Before we get into the details, here are some guidelines that are key to understanding HDB housing grants.

Housing Grant Who It Is For
Enhanced CPF Housing Grant Singles, couples and families buying a BTO or resale flat
CPF Housing Grant Singles, couples and families buying a resale flat
Proximity Housing Grant Singles, couples and families buying a resale flat to live with or within 4km of a parent or child
  • New BTO purchases are only eligible for EHG. Resale flats can avail all three, including the PHG grant. This means you can potentially receive a larger subsidy when buying resale flats.
  • Depending on your marital status and family unit, you will be eligible for one version or another of these three grants.
  • Grants are not mutually exclusive and can stack with each other. In other words, you will receive every grant you are eligible for.
  • Grants are only available for Citizens and Permanent Residents. Couples applying with one non-resident will receive half the grant amount, i.e., the same amount of grant a single Singaporean applicant would receive.

Related: Best Home Mortgage Loans in Singapore 2022

With that in mind, let’s take a closer look at each of the three grants, including how much you can receive.

Enhanced CPF Housing Grant (EHG)
Grant amount Couples: S$5,000 to S$80,000
Singles: S$2,5000 to S$40,000
Income ceiling S$4,500 per applicant
Applicable for BTO flats
Resale flats

The EHG is the most widely applicable housing grant, given that it can be used for both BTO flats and resale flats.

The maximum grant amount is S$80,000 (or S$40,000 for a single applicant), tiered according to your household income.

To be eligible for this grant, your average monthly household income must not exceed S$4,500 per applicant (i.e., S$9,000 for couples).

CPF housing grant
CPF Housing Grant Details
Grant amount First-timer couples:

  • S$50,000 (2- to 4-rm flat)
  • S$40,000 (5-rm flat or larger)
  • If one applicant is a PR, total grant is reduced by S$10,000

First- and second-timer couples:

  • S$25,000 (2- to 4-rm flat)
  • S$20,000 (5-rm flat or larger)
  • If one applicant is a PR, total grant is reduced by S$5,000

Singles:

  • S$25,000 (2- to 4-rm flat)
  • S$20,000 (5-rm flat or larger)
Income ceiling Singles:

  • S$7,000 if purchasing flat on your own
  • S$14,000 if purchasing flat with family or other singles

Couples:

  • S$14,000
  • S$21,000 if purchasing flat with family member
Applicable for Resale flats only
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The CPF Housing Grant (also confusingly referred to as Family Grant; this is inaccurate as singles are also eligible!) offers up to S$50,000 in subsidies for couples and families and up to S$25,000 for singles.

It is affected by several modifiers. For one, only first-time applicants are entitled to this grant, so if your spouse is a second-timer, the total grant you will receive is equivalent to half the amount given to first-timer couples.

Next, buying a 5-room or larger flat will see you receiving a slightly lower grant amount.

housing grant PR

Thirdly, if one of the applicants is a PR, there is a further reduction to the overall grant amount you will receive.

However, on the plus side, the income ceiling is rather generous at S$7,000 per single applicant and S$14,000 per couple. The grant is also not tiered, you’ll receive the maximum eligible amount as long as you meet the qualifying criteria.

Note that there is a separate CPF Housing Grant for those seeking to buy an Executive Condo (EC). This is because ECs are sold by a property developer and not the HDB.

Proximity Housing Grant
Grant amount Couples:

  • S$30,000 (living with your parents/child)
  • S$20,000 (living near your parents/child)

Singles:

  • S$15,000 (living with your parents/child)
  • S$10,000 (living near your parents/child)
Income ceiling n/a
Applicable for Resale flats only

The Proximity Housing Grant was introduced to encourage family bonding by offering an additional subsidy for resale flats purchased to live with or near your immediate family members.

If your parents or married child are living with you in the resale flat you are purchasing, you will be eligible for the higher amount available under this grant.

Otherwise, if the resale flat you are buying is located within 4km of where your parents or married child is residing, you will be eligible for the lower grant amount.

There is no income ceiling requirement, and neither are there any tiers to the grant amount received.

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Related: Best Housing and Property Loans in Singapore

Tips for Young Homeowners to Build Their Housing Fund

Even with heavily subsidised BTO prices and the various housing grants extended, buying a flat represents a major financial commitment, especially for young homeowners. As such, planning ahead is important.

Here are some tips to help you build your housing fund.

Know Your Budget

housing budget

Knowing how much you need is the first step. Look up past BTO launch exercises to get a gauge for how much each type of flat costs so you can work out a budget. This will also help you pick the right home for your income level.

Put More Funds In Your CPF OA

grow your CPF

If you’re planning to use your CPF funds to pay for your future home, consider putting your spare cash into your CPF Ordinary Account. Not only can you earn interest of 2.5% per annum, but you will also be able to make a larger downpayment when purchasing your flat. This, in turn, will lower your monthly mortgage payments.

Set Up an Automated Savings Account

automate savings

If you’re truly serious about owning your own home, get a separate bank account that is solely for your housing fund. For consistency, set up an automatic transfer every month to deposit a fixed amount of money. That way, you won’t conveniently “forget”.

Ready to invest? Check out our round-up of the best investment tools in the market — from Robo-advisors to online brokerages — as well as asset classes like stocks to ETFs.

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The article originally appeared on ValueChampion.

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