SINGAPORE – About 9,700 households have taken up the Housing Board’s Lease Buyback Scheme as at December 2022, with nearly 70 per cent of them receiving between $100,000 and $200,000 for selling part of their remaining flat leases to the board.

Giving an update on the scheme on Sunday, HDB said that about 55 per cent of the households who took it up live in three-room or smaller flats, while about 31 per cent live in four-room flats, and the remainder – about 13 per cent – live in five-room or larger flats.

HDB noted that since 2020, the yearly take-up of the scheme has “remained steady at around 1,500 households”.

Under the scheme, which was launched in 2009, those aged 65 and older can sell part of their flat’s lease back to HDB, while retaining lease lengths from 15 to 35 years, in five-year increments.

The scheme, which requires retained leases to cover the flat’s youngest owner until the age of 95, provides an option for seniors to convert part of their remaining leases into retirement income.

Most households chose to retain 30 years of their lease, with about 61 per cent doing so. About 19 per cent opted for 25 years, 9 per cent went for 20 years, while about 5 per cent each chose 15- and 35-year leases, respectively.

Sunday’s update by HDB comes on the back of a two-day debate on public housing policies in Parliament, in which retirement adequacy was among the issues that MPs raised when airing their views on housing affordability.

For those who tap the Lease Buyback Scheme, the proceeds from selling part of their lease will be used to top up their Central Provident Fund (CPF) Retirement Account and purchase a CPF Life plan, which provides monthly payouts for life. Any balance proceeds after the retirement account top-up will be returned to them in cash.

HDB said that about 69 per cent of households on the scheme had balance proceeds, which they received in cash after topping up their CPF Retirement Accounts to the basic retirement sum. The median monthly CPF Life payout for these 6,702 households was about $950.

In addition to the proceeds from selling part of their remaining leases, those who topped up their CPF Retirement Account with these proceeds were also eligible for a Lease Buyback Scheme bonus of $7,500 to $30,000, depending on their flat type and top-up amount, said HDB.

Those who top up their CPF Retirement Accounts with $60,000 or more receive the full bonus they are eligible for, based on flat type, and HDB said 91 per cent of households on the scheme qualified for full bonuses.

HDB also gave an update on its Two-Room Flexi Scheme, which offers seniors the option to sell their existing property and “right-size” to a two-room flexi flat, to supplement their retirement income.

Since this scheme’s introduction in November 2015, HDB has offered about 46,500 two-room flexi flats.

Booking exercises for about 71 per cent of these units were completed as at December 2022, while selection exercises for the remaining units are ongoing, said HDB.

Seniors aged 55 and older accounted for 58 per cent of the booked flats, while about 35 per cent were booked by singles who were not seniors, and 7 per cent by families.

Among the seniors, nine in 10 opted for short-lease two-room flexi flats, while the rest opted for 99-year leases, said HDB.

For those in short-lease flats, 40-year leases were the most popular, with 30 per cent choosing them. About 27 per cent went for 35-year leases, 17 per cent for 30-year leases, and 14 per cent for 45-year leases. The remaining 11 per cent went for 15- to 25-year leases.

HDB added that in 2021 and 2022, about 82 per cent of the 6,728 two-room flexi flats on short leases that it offered in non-mature estates were priced below $100,000 for a lease length of 45 years. It noted that the prices of such flats take into the account the lease length, with buyers paying less for shorter leases.

“HDB will continue to launch Build-To-Order projects with two-room flexi flats islandwide to provide seniors with more housing choices,” it said.

Separately, HDB said that as at the end of 2022, more than 1,500 households have benefited from the Silver Housing Bonus.

This scheme – launched in 2013 – gives seniors a bonus of up to $30,000 for “right-sizing” to a three-room or smaller flat.

To qualify, seniors should be right-sizing from an HDB flat or private property with an annual value not exceeding $13,000. They are also required to top up their CPF Retirement Accounts with $60,000 of the proceeds from selling their property, and join CPF Life.

HDB said it will study how the bonus scheme can be refined to benefit more senior flat buyers.

Madam Teo Siew Lian, 75, who lives in a four-room flat at Block 79A Toa Payoh Central, was among those who opted for the lease buyback scheme.

She chose to retain 25 years of her remaining lease, receiving about $400,000 in proceeds for selling the rest of it back to HDB in September 2022.

About half went to her CPF Retirement Account and CPF Life plan, and the other half was given back to her in cash.

The freelance travel agent, who is unmarried and lives alone, had considered selling her home after living there for more than 10 years. But after looking around at smaller flats in other estates, she decided it was too much of a hassle to move.

Another factor is that her flat is on the 38th storey, with breezes and a view that are hard to find elsewhere, she said.

“Frankly, at this age, I don’t feel like moving house any more. This scheme allows me to stay on and also provides me with some assurance. With CPF Life, at least your future is a bit more secure,” she added.