Payouts will be in 3 parts: a lump sum, instalments and insurance

Payouts will be in 3 parts: a lump sum, instalments and insurance
By Tan Hui Yee, Housing Correspondent

THE new HDB lease buyback scheme, which allows flatowners to sell back a portion of their lease, could mean as many as 25,000 elderly folk cashing in.
That number - an initial estimate - will increase over the years, revealed National Development Minister Mah Bow Tan last night.

The scheme, announced by Prime Minister Lee Hsien Loong last month, will be open to people at least 62 years old who own a two- or three-room unit and who have had only one HDB subsidy.

It is is designed to supplement the retirement savings of older, low-income owners while allowing them to continue living in their own homes.

Under the plan, the Government will shorten a lease to 30 years and pay the owner for the amount of time that has been deducted.

Take a 99-year leasehold flat with 50 years left to run. That 50-year balance would be shortened to 30 and the owner compensated when the HDB buys back the 20-year portion.

New vision for estates
SOME cutting-edge proposals for HDB estates are on show at the HDB Hub in Toa Payoh as part of a Housing Board exhibition. Here are some of the concepts:

The actual amount ‘unlocked’ by the buyback will depend on each flat’s market value, said Mr Mah, who opened an exhibition showcasing future public housing projects last night.

But the Government will give owners a subsidy on top of the market value as a way of encouraging people to sign up for the scheme.

The payout will be divided into three parts. The first is an initial lump sum, followed by monthly instalments over a fixed number of years.

If the owner dies during that period, the unpaid amount will go to his family.

The third portion of the payment, said Mr Mah, will go to an insurance plan that will give owners an income for life after the first two payment batches run out.

Mr Mah said his ministry and the HDB are still working out the details of this ’safety net’ with agencies like the Central Provident Fund Board, which is looking into a way to ensure people have enough savings to get by.

Mr Mah also guaranteed home owners who join the buyback scheme that they will still have a roof over their heads if they outlive the 30-year lease. But some may not be able to continue living in their own flats.

The full details of the plan are expected to be ready by next year’s Budget.

Mr Mah also unveiled a wide range of proposals for housing in Punggol, Yishun and the Dawson estate in Queenstown last night.

On display were designs by three leading architectural firms - Surbana International Consultants, WOHA Architects and SCDA Architects. They conceptualised 3,000 cutting-edge homes in three housing precincts in Dawson Estate in Queenstown.

The new generation of public housing will give buyers more choices of homes and landscaped community spaces while bringing greenery and waterscapes to their doorstep, said Mr Mah.

Punggol, for example, will get a 4.2km waterway that will link two future reservoirs and become a centrepiece for housing.

But, Mr Mah cautioned: ‘All these plans…are really premised on continued growth.

‘That is unspoken, but that must be so. If there is another major crisis or slowdown, it’s not just a matter of building it - who’s going to buy it?’

The exhibition will be at the HDB Hub in Toa Payoh until Sept 8 and then moves to various estates.

The HDB will gather feedback before proceeding with the plans.

Source : Business Times - 01 sept 2007