We thank Mr Lee Yong Se for his letter (Relook resale levy for more equitable housing policy; July 8).

The Government is committed to helping Singaporean families own their first home and provides generous housing subsidies for first-timers to buy a flat.

In particular, low-and middle-income families are given additional grants to help them buy their first Housing Board flat.

First-time flat buyers can receive up to $80,000 in grants when they buy new flats on top of the already subsidised price, and up to $120,000 in grants when they buy resale flats.

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 is not intended to be a tax on capital gains, but rather, to reduce the subsidy on the second subsidised flat.

This maintains a fair allocation of public housing subsidies between first-and second-timers, and helps to ensure that housing subsidies are equitably distributed among households.

We regularly review our policies to ensure that they stay relevant.

For instance, 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 plan better.

As Mr Lee has rightly pointed out, HDB flats are meant for owner occupation.

Flat owners may sell or rent out their whole flat only after they have met the five-year minimum occupation period.

Lily Chan-Wong (Mrs)

Director (Policy & Property)

Housing & Development Board