NATIONAL DAY RALLY
Lease Buyback: 'Better, but limited take-up expected'
Experts say extended scheme will likely appeal to only a small segment
Published on Aug 19, 2014 11:24 AM
While letting owners of four-room Housing Board flats sell part of their lease back to the Government is a good move, it will probably appeal to only a small section of the population, said property experts and academics.
They do not expect a spike in applications in response to this extension of the Lease Buyback Scheme, which was previously for three-room and smaller flats. Rather, the scheme will continue to have a limited appeal, they said - to low-income households who are short of retirement funds on the one hand, and savvier owners on the other.
Under the scheme, flat owners sell part of their flats' lease back to the HDB. The proceeds from selling the lease are used to top up owners' Central Provident Fund (CPF) Retirement Accounts, for larger monthly payouts under the CPF Life scheme.
The required top-up level is the Minimum Sum for those aged 70 and younger, and slightly less for older flat owners. The owners will receive the funds in excess of this as cash.
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FOR THE KIDS
This bequest motive is a very strong motivation.
- NUS Associate Professor Chia Ngee Choon, on how many Singaporeans wish to keep their flats so they can leave them for their children.
Response has been lukewarm since the Lease Buyback Scheme's launch in 2009.