by MP for Aljunied GRC, Sylvia Lim
The rationale for the HDB resale levy is stated as achieving a fairer allocation of subsidies between first and second timer purchasers of HDB flats. Thus, a flat owner who purchases a flat directly from HDB, or purchases a resale flat with CPF housing grant, will have to pay back a portion of the sales proceeds to the HDB after the flat is sold. The levy may be paid at the point of resale, or deferred to the point of purchase of a 2nd subsidized flat, which will attract interest at 5% p.a.
It seems to be quite a blunt instrument, which may need review in some cases. One group is those who sold their “first” flats some years ago. I have come across residents who had sold their first flats as long ago as in 1999. They had to sell their flats then due to indebtedness. Now they wish to purchase a new flat. The applicable resale levy policy requires them to repay HDB a certain % of the flat’s resale price or valuation, and interest at 5% pa for 13 years, which could easily work out to more than $100,000. This is a prohibitive sum, which has made further purchases from HDB unaffordable for them.
Could HDB review the resale levy for those who sold their ‘first flat’ more than 10 years ago, especially those who have lower household income? This group of Singaporeans is generally of older age, as they would have sold their first flat more than 10 years ago and lived there at least for 5 years prior to the sale. Some of these people are not as employable or credit worthy as in the past and need a second chance to move on.
As a second alternative, could HDB consider allowing these households to add the levy to their loan for the new home, to be repaid over time?