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New housing rules from 10 May 2019


therock
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I wonder if this is some means to inject 'movement / excitement' in the market, which has been slow.. 

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U are too narrow in scope. Policy needs have a wider view. How about those 65 year old with fully paid private housing? Or people with hdb but not much cpf used? With the extremely low interest rates in the past 10 years, I suspect there are quite a few who do not use much cpf for housing,

 

The point is I don’t think the 30 years or even 20 years serve much of a point. I think the pegging the cpf use to buyers age removes a hard cliff issue when u use solely the age of the property.

 

maybe .... but u may not know HDB dwellers .  last nite I think think again . Possible some after 55 - 65 wanted to downgrade , sell their 5 rm flat and buy 3rm. 

say after kids all married or partner bye bye ...  but then , i also think 1 big group will sell house and stay with kids . Some dont wan to  bother kids , then they can also go for elderly condo too. Newer and better facility.  So those wanted to get from open market is very limited . Mature town is very expensive even for old flat. 

 

If old man with pte housing wan to cash out ... you think they need this rule to get thru meh  ? These new rule will not affect these group .  If they lots of CPF lagi better, they can always get a >40 yr lease flat . No problem at all. I am sure these group will likely to wear rolex too ... T2's target  [smash]

 

There is no need for HDB / CPF to make so much change just to cater for this group ...... that is my point. The reason they

gave is Ho Kua (good to see) bo ho jia  , but just an excuse opener.  You get ? no get ? there is more to meet the eye 

[laugh] but then , some say I got Pa Jiao Bak ....  :wacko:

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Good luck everyone.

 

I know i’ll need it.

 

when ur time comes ...... i rent u one room cheap cheap . Ai Mai .  :D  

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(edited)

That's a very good question and a darn good point.

 

I wonder why too......and if the 65 years old buyer uses full CPF now to buy a 30 years lease left house, how does that affect his monthly payout?

 

Anyway, it is a real issue only 17 years later cos currently the oldest HDBs still have 47 years left.

 

if one at 65 wan to buy  a house , new additional rule applies . based on what is written , anyone buy a flat after 55 , 

if age + flat lease > 95 ,  BRS will be lock in . 

if no house or < 95 , FRS will be lock in . 

 

If old man got house b4 or still have , I think old man will not be much affected since he will gain some Profit from sales. 

but if old man got no house b4 .... and kana lock in FRS . I doubt he will have much left for the house . So at the end,

big loan from HDB , maybe .  -_-

 

The problem may come earlier ...... some pte owners only have 60 yr lease and expiring soon. But again, I think small numbers . 

 

 

Edited by Angcheek
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Turbocharged

This part is a interesting point ..... why they move the lower cap from 30 to 20 yr ...

 

e.g. who can buy 30 yr left flat ........ generally should be someone at > 65 rite ...

basically , allowing those over 65 to use CPF to change house ? but why would anyone at that age

wan to change house ? If they dont have a house all the while , why would they wan to buy a house at

65 ?

Why not leh? Why discriminate?
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Twincharged

This part is a interesting point ..... why they move the lower cap from 30 to 20 yr ...

 

e.g. who can buy 30 yr left flat ........ generally should be someone at > 65 rite ...

basically , allowing those over 65 to use CPF to change house ? but why would anyone at that age

wan to change house ? If they dont have a house all the while , why would they wan to buy a house at

65 ?

Maybe a second home purchase to rent out existing property?
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(edited)

Some info on pro rated CPF used for <95 ... Basically every drop in 5 yrs , CPF drop by 2 X ... 

so 5 yrs --- 10 % drop in CPF

15 yrs    --- 30% drop in CPF

 

 

https://www.mom.gov.sg/newsroom/press-releases/2019/0509-more-flexibility-to-buy-a-home-for-life

 

 

 

 

More Flexibility to Buy a Home for Life While Safeguarding Retirement Adequacy

 

9 May 2019

JOINT MND-MOM PRESS RELEASE

Rules on CPF usage and HDB housing loans have been updated to provide more flexibility for Singaporeans to buy a home for life, while safeguarding their retirement adequacy. The rules will now focus on whether the remaining lease of the home can cover the youngest buyer until at least the age of 95. If so, home buyers will be allowed to obtain maximum CPF usage and HDB housing loan (for HDB flat buyers). Those who do not meet this criteria will still be able to use CPF and take up an HDB housing loan, but the amount will be pro-rated. 

2. The updated rules will take effect from 10 May 2019. Majority of home buyers will not be affected as they are already purchasing a property which lasts them to the age of 95. 

Updates to CPF rules for all properties 

Use of CPF for property purchase 

3. Previously, the use of CPF to buy properties focused on the remaining lease of the property:

Remaining lease of property  Previous rules on total use of CPF

60 years or more  Buyer can use CPF to pay for the property up to the Valuation Limit (VL)

30 years to less than 60 years  • Buyer can use CPF if the remaining lease of the property covers the youngest buyer until at least the age of 80 

• Total amount of CPF that can be used is capped at pro-rated VL

4. These rules have to be updated to take into account the changing needs and higher life expectancy of Singaporeans. Under the new rules, the total amount of CPF that can be used for property purchase will depend on the extent the remaining lease of the property can cover the youngest buyer to the age of 95.

 

 

post-59158-0-85641600-1557733941.jpg

 

 

5. To ensure prudent use of CPF monies, there will still be a minimum lease requirement for the use of CPF for property purchases. This will be lowered to 20 years (from the existing 30 years), in line with the existing criteria for HDB loans. 

CPF withdrawal rules after age 55 with a property 

6. Previously, CPF members above the age of 55 could withdraw their CPF savings above the Basic Retirement Sum (BRS) if they owned a property with a remaining lease of at least 30 years. This was to ensure that they have secured a home in retirement and a basic level of retirement income. 

7. To encourage CPF members to have a home for life and to secure at least a basic level of retirement income, CPF members will now need to have a property with sufficient remaining lease to cover them until at least the age of 95, before they can withdraw their CPF savings above the BRS. 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. 

Updates to HDB housing loan rules for flat buyers 

8. Previously, buyers of HDB flats faced restrictions on the amount of HDB housing loan they could get to purchase flats with remaining leases of less than 60 years. 

9. With this update, buyers will now be able to take an HDB housing loan of up to the full 90% Loan-to-Value (LTV) limit , if the remaining lease of the flat can cover the youngest buyer to the age of 95. 

10. If the remaining lease of the flat cannot cover the youngest buyer to the age of 95, they can still take an HDB loan but the LTV limit will be pro-rated from 90%, based on the extent that the remaining lease can cover the youngest buyer to the age of 95. 

11. Put together, these changes will give buyers more flexibility when buying a home for life while safeguarding their retirement adequacy. A summary of the updated rules on CPF usage and HDB housing loan is in Annex A. Examples of how buyers will be affected by the updates are in Annex B. Further details on the CPF changes are in Annex C

Implementation 

12. The updated rules will apply to: 

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

13. Buyers can click on the following links to use the online calculators to compute their allowable CPF usage (public and private housing) and HDB housing loan: 

CPF usage

• HDB housing loan 
New flat 
Resale flat

14. Buyers who bought properties before 10 May 2019 and are still servicing their housing loans will not be affected by these changes. Members who bought their property and turned 55 years old before 10 May 2019 can continue to apply to CPF Board to withdraw their CPF savings above their BRS under the previous rules. 

15. Those who are mid-way through a property purchase can approach CPF Board or HDB for clarifications and assistance. 

16. For enquiries, members of the public can contact: 

CPF usage 

• CPF Board Service Line : 1800-227-1188 
• Write to us : cpf.gov.sg/askcpf 

HDB housing loan 

• HDB Sales/Resale Customer Service Line : 1800-866-3066 
• HDB Branch Service Line : 1800-225-5432 


Issued by : MND & MOM 

Date : 9 May 2019 

  

Annex A 

Updated Rules on CPF Usage and HDB Housing Loan

 

 

post-59158-0-90259600-1557733803_thumb.jpg

^For HDB flats, the point of purchase refers to the flat application date. For private properties and Executive Condominium units, the point of purchase refers to the Option to Purchase or the Sale & Purchase Agreement exercised date. 

  
Annex B 

What The Updates Mean to Property Buyers 

A. Majority of buyers will not be affected by the changes. 


Example 1: Sammy and Devi are both 25 years old; they just got married and are buying their first home.

Age of Youngest Buyer 25 years old   Property Type  
 5-room resale HDB flat 
85 years remaining lease 
[i.e. lease covers Sammy and Devi until at least the age of 95] Lower of Property Price or Market Value   $430,000

The couple’s maximum CPF usage and HDB housing loan limits are not affected by the updated rules. 

As the property covers them until at least age 95, they may also request to withdraw CPF savings above their Basic Retirement Sum (BRS) when they turn 55.

 

post-59158-0-82634200-1557733569_thumb.jpg

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: 
1. Banks also take reference from CPF restrictions when assessing how much loan to lend. 
2. Actual loan amount is subject to credit assessment which takes into account, among others, buyer’s income and age. 


B. Those who buy a home for life would face less restrictions on their CPF usage.

Example 2: John (age 48) and Jane (age 45) are buying a flat to move closer to their parents’ homes.

Age of Youngest Buyer  45 years old Property Type 4-room resale HDB flat 
50 years remaining lease 
[i.e. lease covers youngest buyer (Jane) until at least the age of 95] Lower of Property Price or Market Value $430,000

Under the updated rules, the couple may use up to $86,000 more of their combined CPF savings to buy the flat. Their HDB housing loan does not change. 

As the property covers them to age 95, they may also request to withdraw CPF savings above their BRS from the age of 55. 

​ post-59158-0-21207100-1557733471_thumb.jpg

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: 
1. Banks also take reference from CPF restrictions when assessing how much loan to lend. 
2. Actual loan amount is subject to credit assessment which takes into account, among others, buyer’s income and age. 

C. Those who buy a home with a remaining lease that does not cover them to the age of 95 will be able to use CPF and take up an HDB housing loan, with limits to safeguard their retirement adequacy. 

Example 3: Nick and Cheryl are both 25 years old; they just got married and want to buy their first home.

Age of Youngest Buyer  25 years old   Property Type 4-room resale HDB flat 
65 years remaining lease 
[i.e. lease does not cover Nick and Cheryl until at least the age of 95] Lower of Property Price or Market Value  
 $430,000

Under the updated rules, the maximum CPF usage is reduced by $43,000 while the HDB housing loan is reduced by $38,700. 

 

post-59158-0-34929800-1557733353_thumb.jpg

 

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: 
1. Banks also take reference from CPF restrictions when assessing how much loan to lend. 
2. Actual loan amount is subject to credit assessment which takes into account, among others, buyer’s income and age. 

As the property does not cover them to the age of 95, they will not be able to withdraw CPF savings above their BRS from the age of 55 (except for the first $5,000 from the age of 55, and 20% of their RA savings from their payout eligibility age). 

If they buy a flat which has a longer lease coverage, they will be able to use more CPF. Their HDB housing loan will also be higher.

 

post-59158-0-78855400-1557733269_thumb.jpg

 

 

*Applicable limit for buyers who have not set aside the BRS. Usage beyond the Valuation Limit (up to applicable limits) is allowed if the property buyers have accumulated their BRS. 
Note: Examples above assume lower of price or market value is $430,000 across all flats. 

Annex C 

Further Information on CPF Changes 

Consequential changes to purchase of multiple properties using CPF: Previously, CPF members needed to set aside the Basic Retirement Sum (BRS) before excess Ordinary Account (OA) monies could be used to purchase second or subsequent properties. From 10 May 2019, members who do not have any property bought using CPF monies that covers them until at least the age of 95 will need to set aside the Full Retirement Sum before using excess OA monies to purchase second or subsequent properties. Members who have a property with remaining lease that covers them until at least the age of 95 will not be affected (i.e. previous rules apply). Members in a buy-first-sell-later situation are not affected if they dispose of their previous property within the six-month grace period. 

Consequential changes to CPF usage after age 55: For purchases from 10 May 2019, the remaining lease of the property needs to cover the buyer until at least the age of 95 for the buyer to use Retirement Account (RA) savings above the BRS to pay for the property. Members approaching age 55 can ask CPF Board to reserve their OA savings so that they may continue servicing their mortgage payments after the age of 55. Those facing difficulty servicing their housing loans can approach HDB or CPF Board for assistance.

Edited by Angcheek
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(edited)

it seems like the changes also want to curb the crazy million dollar resale hdb

so that siaolang dont insanely throw all the cpf$ into million dollar hdb which turn to $0 after 99 years

if they want to pay $1M ... can ... use ca$h

Edited by Wt_know
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it seems like the changes also want to curb the crazy million dollar resale hdb

so that siaolang dont insanely throw all the cpf$ into million dollar hdb which turn to $0 after 99 years

if they want to pay $1M ... can ... use ca$h

 

those over Million one are still young flats ... I think the new changes wont affect this group. 

Easily pass the 95 limit test . Or did I missed somethiing ? 

 

 

for those who have already bought flat over million , if they rich , no problem . 

 

if they expecting to make some quick $ ... I think this will become harder now. 

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those over Million one are still young flats ... I think the new changes wont affect this group.

Easily pass the 95 limit test . Or did I missed somethiing ?

 

 

for those who have already bought flat over million , if they rich , no problem .

 

if they expecting to make some quick $ ... I think this will become harder now.

Must say congratulalation to the idiot!
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Twincharged

$1 million HDB (usually):

 

- central (saves time for family's daily travel)

- near / at MRT

- plenty of amenities

- near workplace

- near premium schools

- (sometimes) premium address

- (sometimes) culturally rich areas

 

If rent such a place, the rent is probably around $3000-3500 per month based on today's low rent price. Some 30 years to recoup the full rent with some length of lease left.

 

May be a good deal for some if they can unleash the value.

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+1

Those people who buy the 1mil HDB aren't fools..

Huge units, great locations, lots of amenities..

 

For example, if the two blocks near Farrer MRT come on sale, I'll buy them in a snap... or the new Dawson area.. also very nice

You can smile at your neighbours who paid 2-3 times more for their fancy condos. 

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Turbocharged
(edited)

+1

Those people who buy the 1mil HDB aren't fools..

Huge units, great locations, lots of amenities..

 

For example, if the two blocks near Farrer MRT come on sale, I'll buy them in a snap... or the new Dawson area.. also very nice

You can smile at your neighbours who paid 2-3 times more for their fancy condos. 

 

The difference is in the potential capital appreciation.

 

The old HDB, while has great conveniences, spacious, etc.....has almost no chance of capital appreciation unless there is some form of policy change which the authorities are trying to tweak now.

 

The below chart tells you the current story.  All Condos $psf appreciation vs All HDBs $psf appreciation.

 

Note : Chart below does not include EC

post-69683-0-83499100-1557981175_thumb.jpg

Edited by Icedbs
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(edited)

$1 million HDB (usually):

 

- central (saves time for family's daily travel)

- near / at MRT

- plenty of amenities

- near workplace

- near premium schools

- (sometimes) premium address

- (sometimes) culturally rich areas

 

If rent such a place, the rent is probably around $3000-3500 per month based on today's low rent price. Some 30 years to recoup the full rent with some length of lease left.

 

May be a good deal for some if they can unleash the value.

who is the idiot pay $3.5k to rent an old HDB with gianpeng furniture and dirty toilet bowl?

muahahahaha ... huat ah!

and the rules to rent out hdb keep changing and tightening

overnight can strike the million dollar hdb rental dream to $0

Edited by Wt_know
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