Introduced in 2009, the Lease Buyback Scheme allows elderly home owners to sell part of the lease of their flats back to the Housing Board for retirement income.
The scheme was initially only for three-room and smaller flats, but it was expanded in April 2015 to include four-room units.
Soon, all HDB flat types will be eligible. Details regarding implementation are being worked out, the Government said.
The flat owners, however, must be at least 65 years old, and have a combined household income of less than $12,000 a month. They must not own another property, and their flats must have at least 20 years of lease to sell to HDB.
For example, if a flat has 70 years of lease left and the owner wants to live there for another 30 years, he can sell the remaining 40-year lease, which HDB will buy at market rate.
The sale proceeds will be used to top up the owner's CPF Retirement Account.
The savings in the Retirement Account can be used to buy a CPF Life plan, which will give the owner a monthly income for life. Part of the proceeds can be withdrawn in cash, if the owner meets his Retirement Account requirements.
If the owner dies before the expiry of the 30-year lease, his family is paid for the remaining years.
Should owners outlive the length of their flats' remaining lease, the Government has assured them that appropriate housing arrangements would be made and they will not become homeless.
One key advantage of the Lease Buyback Scheme is that owners get to live in their homes while receiving a lifelong income.
The downside is that they have no property to bequeath their loved ones. They also have to forgo any gains should their flats' value appreciate.