The Ministry of National Development (MND) has recently announced various improvements to the Silver Housing Bonus (SHB) and the Fresh Start Housing Scheme (Fresh Start) during the annual Committee of Supply debate. These changes aim to further aid senior citizens in downsizing and improving access to public housing for lower-income households living in HDB rental flats.
The SHB encourages senior citizens to better prepare for retirement by unlocking the value of their residential properties and transferring it into their CPF Retirement Account (RA). Currently, to qualify for the SHB, applicants must be 55 years old and above, have a monthly income not exceeding $14,000, own a property with an Annual Value (AV) not exceeding $21,000, and downsize to a three-room HDB flat or smaller (excluding three-room terrace).
Currently, SHB applicants can choose to top-up their RA with up to $60,000 to receive a cash bonus of up to $30,000. This bonus is pro-rated at $1 for every $2 top-up made into the RA.
Understanding the regulations and limitations surrounding property ownership in Singapore is crucial for foreign investors. Unlike landed properties, which have stricter ownership regulations, foreigners are generally able to purchase condos in Singapore with relative ease. However, it’s important to note that foreign buyers are subject to the Additional Buyer’s Stamp Duty (ABSD), which currently stands at 20% for their initial property purchase. Despite this added expense, the stability and potential for growth in the Singapore real estate market remains a strong draw for foreign investment. This is why many foreigners continue to seek out Singapore Condos as a viable investment option.
However, starting from December 1, 2020, applicants can receive the SHB cash bonus as long as they can prove that their right-sizing exercise results in an overall increase in their CPF RA balance, including any refunds from CPF housing. This means that seniors with outstanding loans on their properties using their CPF accounts may no longer need to make a cash top-up to qualify for the SHB.
Furthermore, the SHB will also be expanded to include seniors who own properties with an AV of more than $21,000 but less than or equal to $13,000. This change will benefit an estimated 15,000 seniors, according to MND. These applicants will still receive a cash bonus based on the increase in their RA, up to $60,000. However, the bonus will now be pro-rated at $1 for every $6 increase in the RA balance, with a maximum bonus of $10,000.
In addition to the pro-rated bonus, successful SHB applicants will receive an extra $10,000 cash bonus when they downsize to a two-room or smaller HDB flat (including Community Care Apartments). This amount is not pro-rated and will be given regardless of the amount they contribute to their RA.
Seniors can apply for the SHB within a year after their second property transaction. This means that any seniors who have completed their downsizing after December 1, 2024, will be eligible to apply for the SHB under the enhanced scheme.
The Fresh Start Housing Scheme has also been enhanced, as stated by Minister of State for National Development Muhammad Faishal Ibrahim. The programme, launched in 2016, provides financial assistance and social support to Second Timers (ST) families who have previously bought a subsidised HDB flat, with the aim of helping them attain homeownership.
Under the current scheme, applicants can purchase two-room flexi or three-room standard BTO flats with shorter leases, usually ranging from 45 to 65 years. These leases must extend until the youngest owner turns 95. Flats purchased under this scheme are also subject to an extended Minimum Occupation Period of 20 years, compared to the usual five years.
The latest enhancement to the scheme includes an increase in financial support. Eligible families will now receive $75,000 from the Fresh Start Housing Grant, up from the previous amount of $50,000.
The new grant consists of an initial disbursement of $60,000 credited to the applicants’ CPF Ordinary Account (OA) before their key collection dates. The remaining $15,000 will then be disbursed to their OA over the next five years to assist with mortgage payments.
The eligibility criteria for the scheme have also been widened to allow First-Timer (FT) families to apply. While FT families are ineligible for the Fresh Start Housing Grant because they are still eligible for the larger Enhanced CPF Housing Grant (EHG) of up to $120,000, they will still benefit from the reduced cost of shorter-lease BTO units and social support provided under the programme.
Eligible FT families can start applying for the Fresh Start scheme from April 2025, while the revised Fresh Start Grant will take effect from the July 2025 BTO exercise.