Additional CPF Housing Grant
One of the goodies being handed out is the increase in the payout of Additional CPF Housing Grant to $30,000 from the current $20,000. The maximum grant is for household whose income is $1,500 or below.

To lower the barrier, the household income ceiling will be raised from $3,000 to $4,000 to cover about half the households in Singapore. The new policy change will draw in an additional 1,300 households every year and cost the government an estimated additional $35 million a year.

To qualify for the AHG, at least one of the flat owners must be working continuously for a minimum of two years when they apply to buy the flat.

The additional housing grant can be used for new as well as resale HDB flats.

The details of revised grant are as follows:

HDB Buy-back scheme for older Singaporeans
For elderly citizens who are 62 years and older, HDB will buy back the balance lease period after setting aside 30 years lease for the flat owners. The payout will be given in a lump sum upfront and subsequent monthly payments in the form of annuity for the remainder of their life. This is to help the elderly with living expenses after they have dried up their retirement funds.

The big advantage of the proposed new scheme is that the elderly persons do not need to move out of their own homes when savings run out. This is despite the fact that the payments are set to be modest.

Resale prices set to rise
With the introduction of the above goodies, resale prices for smaller HDB flats are expected to rise due to higher demand. To put it in perspective, the additional housing grant is equivalent to about 20% to 30% of a 3-room flat. As for the buy-back scheme, some flat owners may sell their flats at a premium and realising cash now rather than wait for the annuity later.

Edited by Sam Gian
(Singapore's Independent Real Estate Trainer & Consultant)