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Housing Subsidies

(Part of “The Almost Complete Goondu’s Guide to Buying a HDB Flat in Singapore” series.)

In order to make home ownership more affordable for Singaporeans, HDB flats are subsidised through various schemes.

CPF Housing Grant Scheme

Through the CPF Housing Grant Scheme, the government provides eligible buyers of resale flats with a range of subsidies that cater to families and people who are single.

Under the Family Grant, a subsidy of $30,000 in the form of CPF money is given to first-time applicants who have not enjoyed housing subsidies before, and whose household income is not more than $8,000.

Married couples who meet the first-timer prerequisite, and are purchasing a unit near their parents’ or married children’s residential property, are entitled to a higher-tier grant of $40,000. To qualify for this subsidy, the applicants’ flat must either be in the same town as their parents’ or married children’s property, or within a two-kilometre radius if they are in different towns. The income limit of $8,000 applies in this case as well.

The Singles Grant, as its nomenclature suggests, is meant to assist those who are unmarried. To qualify for this grant, the applicant has to be a Singaporean citizen above 35 years old, and must not have previously enjoyed any housing subsidy from the HDB. If the applicant is living on his or her own, he or she can get a grant of $11,000, whereas joint applicants (ranging between two to four people) can obtain a subsidy of $22,000.

Singles who will be living with their parents are eligible for a higher-tier grant of $20,000. As with the Family Grant, the Singles Grant is for people buying resale flats in the open market.

Top-up Grant

The Top-up Grant is essentially for people who have previously applied and qualified for the Singles Grant. Such a grant recipient can subsequently apply for more subsidies if he or she meets either of the following conditions:

    – The recipient marries someone who is a Singapore citizen and satisfies the first-time criterion, or someone who is likewise a Singles Grant recipient.

    – The recipient’s non-citizen spouse or child has become a Singapore citizen or permanent resident (applicable to those who have bought resale flats under the Non-citizen Spouse Scheme).

Applicants can apply for the Top-up Grant either for their existing flat or when they purchase another resale flat. The top-up amount is the difference between the prevailing Family Grant and the collective Singles Grant amount which the applicants previously received.

For example, based on a basic-tier Family Grant rate of $30,000, if both spouses each received $11,000 under the Singles Grant (thereby making a total of $22,000), the top-up amount will be the difference between $30,000 and $22,000, which is $8,000.

Buyers who are eligible for the Top-Up Grant can also apply for the Additional Housing Grant.

The applicant will have to meet a number of eligibility conditions before he or she can qualify for the Top-up Grant.

Additional CPF Housing Grant

The Additional CPF Housing Grant (AHG) made its debut in March 2006. It is meant to give extra financial assistance to people in lower-income brackets. It was enhanced in 2007 to make it easier for first-time applicants to purchase a flat, especially in these difficult times. The latest revisions to the AHG are as follows:

    – Increase in income ceiling from $4,000 to $5,000.
    – Increase in maximum grant amount from $30,000 to $40,000
    – Reduction of the two-years continuous employment prerequisite to one year.

The changes are intended to let more first-timers qualify for the AHG. Applicants have to meet a number of eligibility conditions before they can apply for the grant, including these:

    – Applicants must meet all the prevailing conditions for the CPF Housing Grant for Family or CPF Housing Top-up Grant (whichever is applicable).
    – At least one applicant must have worked continuously for at least one year before the time of application.
    – The average monthly household income over this one year period must not exceed $5,000.

Grant money can be used to offset the purchase price of the flat, thereby reducing the mortgage amount a buyer needs to secure. It can also be used as capital payment for the purchase. The money can only be used for the initial payment: the balance, if any will have to be used to reduce the mortgage loan. Upon subsequent sale of the flat, the AHG (and the CPF Housing Grant) will be refunded to the recipient’s CPF account, according to prevailing CPF rules.

For more details, check out the HDB Infoweb.

(via The Straits Times, 24th April 2009)

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