Fairer distribution of subsidies through resale levy

Mr Richard Chan Yong Huat ("Have uniform HDB levy for second BTO flat purchase"; Sept 26) and Madam Liu Siok Ming ("Review HDB resale levy policy"; Forum Online, Oct 1) asked about HDB's resale levy policy.

Singapore citizen households enjoy a housing subsidy when they buy a new flat from HDB or a resale flat in the open market with a Central Provident Fund (CPF) housing grant.

Flat owners who have sold their first subsidised flat have to pay a resale levy when they buy another subsidised flat from HDB.

The levy reduces the subsidy on the second subsidised flat, so as to maintain a fair allocation of public housing subsidies between first and second-timers.

Owners can pay the levy when they sell their first subsidised flat, or choose to defer the levy, but with accrued interest, to be paid when they buy their second subsidised flat (before key collection).

HDB regularly reviews its policies to ensure that they stay relevant.

In 2006, we refined the resale levy policy to adopt a fixed levy amount instead of a percentage of the selling price of the first subsidised flat. This gives second-time flat buyers greater clarity on the levy payable and allows them to better plan ahead.

In August this year, a further refinement was introduced to help the elderly who wish to right-size to a smaller flat.

For those aged 55 and above who sold their first subsidised flat before March 3, 2006 and have not paid their resale levy, HDB will waive the accrued interest on their levy if they are buying a new two-room or three-room flat. They need pay only the graded resale levy, without the interest accrued.

As an example, the interest on Madam Liu's resale levy will be waived should she decide to right-size to a new two-room or three-room flat. She could also consider buying a two-room flexi flat on short lease and pay a smaller, pro-rated resale levy.

In implementing our policies, we are mindful that there could be cases that merit special consideration.

We will look into the circumstances of each case and consider the best way to help our home buyers. Home buyers can approach our sales office or call us on 1800-866-3066 if they need advice on the housing options available to them.

Lily Chan-Wong Jee Choo (Mrs)
Director (Policy and Property)
Housing and Development Board

A version of this article appeared in the print edition of The Straits Times on October 17, 2015, with the headline 'Fairer distribution of subsidies through resale levy'. Print Edition | Subscribe