Bigger housing subsidy to help lower income families buy flats
By Wong Siew Ying, Channel NewsAsia | Posted: 19 August 2007 2229 hrs


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The dream of owning a home may come sooner for many lower income families.

The government is planning to enhance the Additional CPF Housing Grant subsidy.

Speaking at this year's National Day Rally, Prime Minister Lee Hsien Loong also announced a new initiative that could help older Singaporeans monetise their flats.

The Housing and Development Board is set to improve the Additional CPF Housing Grant scheme which was introduced last year.

The grant will be increased from S$20,000 to S$30,000, and it will give needy families a leg up to buy their first subsidised flat.

PM Lee said: "Now, a 3-room flat, new from HDB today, cost you $120,000, so $30,000 out of that is a lot of money.

Not only will they be getting more subsidy, more lower income families will also be eligible for the Additional CPF Housing Grant.

HDB will be raising the household income ceiling from S$3,000 a month to S$4,000.

This, Mr Lee said, would cover about half of all households in Singapore.

The government also wants to put more money in the hands of older Singaporeans to aid retirement.

By helping them to unlock the value of their flats, especially those living in 2 or 3-room flat who have only had one bite of the housing cherry.

PM Lee said: "Right now, they can sell it, move to a studio apartment, 30-year lease. But we will introduce a new alternative, a new scheme. Instead of letting you move out of a flat and into a new place with 30 years, we will just let you stay in your flat and take back the tail of your lease and leave you with 30 years lease on your present flat."

The payout will be in two parts - an upfront lump sum payment and monthly payments for the rest of their lives, much like an annuity.

The scheme will target those aged 62 and above.

Mr Lee added that the 30-year lease should see them through their twilight years, and ease concerns that they will have nowhere to stay.

The government will work out some arrangements for those who live longer. - CNA/ch