Still no clarity on uneven HDB resale levy

The HDB's Mrs Lily Chan-Wong Jee Choo said in her letter on Oct 17 ("Fairer distribution of subsidies through resale levy"): "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."

The previous resale levy rate (by percentage) before March 2006 was very effective in deterring second-timers from taking the second subsidy, thus, reducing their numbers.

Some sellers have forgone their second subsidy for many years because of the high resale levy rate of the 1980s.

There are some who enjoyed the second subsidy by paying the resale levy.

But in its Oct 17 reply to readers' queries ("Have uniform HDB levy for second BTO flat purchase" by Mr Richard Chan Yong Huat; Sept 26, and "Review HDB resale levy policy" by Madam Liu Siok Ming; Forum Online, Oct 1),

HDB did not explain why the resale levy changes in March 2006 to a flat rate could not be applied to those who sold their flats before March 2006.

The majority of these sellers held on to their first subsidy flats for a much longer period (more than 10 years), thus, not depriving first-timers of the subsidy during that period.

So why are they being disadvantaged, compared with those who bought their first subsidy flat more recently (about five years ago)?

It is also "unfair" that some people who bought premium HDB flats, Design, Build and Sell Scheme flats and executive condominiums on a first subsidy and subsequently sold their flats after March 2006 could be paying a much lower resale levy, compared with sellers who sold their HDB flats before March 2006 but have not taken the second subsidy yet.

HDB should apply the new resale levy rate regardless of the date of sale of the first subsidy flat, since the purpose of the resale levy is to maintain fair allocation of public housing subsidies between first- and second-timers.

Baharudin Nordin

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A version of this article appeared in the print edition of The Straits Times on October 30, 2015, with the headline Still no clarity on uneven HDB resale levy. Subscribe