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The HDB Lease Buyback Scheme could be a useful way for boosting your CPF Retirement Account savings to enjoy greater monthly payouts, without needing to sell your home and “right size”. We take a look at how it works to help you decide whether it is something you or your aged loved ones would want to consider. |
Photo: Unsplash / Chuttersnap
Read Also: Early Retirement In Singapore: Here Are 5 Important Questions You Need To Answer Today
What Is The HDB Lease Buyback Scheme?
The HDB Lease Buyback Scheme allows elderly homeowners who wish to continue to live in their HDB homes, while unlocking the value of their properties and receive cash and higher CPF LIFE payouts in return for the extra years of lease that they are unlikely to need.
The scheme was launched in 2009 and enhanced in 2015 with a higher income ceiling for eligibility, allowing households with multiple owners to receive more cash upfront, and giving homeowners a choice of lease durations to retain.
How Does The HDB Lease Buyback Scheme Work?
Your household will first need to choose the length of lease to retain, based on the age of the youngest owner. This determines the amount of net proceeds you can unlock.
| Age Of Youngest Owner | Choice Of Lease To Retain |
| 65 to 69 | 30, 35 |
| 70 to 74 | 25, 30, 35 |
| 75 to 79 | 20, 25, 30, 35 |
| 80 and above | 15, 20, 25, 30, 35 |
When you sell your remaining lease to HDB, you’ll receive a cash payment upfront depending on your flat size (ranging from $10,000 to $20,000) and the net proceeds will be used to top-up your CPF Retirement Account (RA).
Cash Payment: Your household will receive the full cash payment as long as the total top-up to the flat owners’ RA is $60,000 or more. If you are unable to do so, you will receive a pro-rated bonus of $1 for every $3 CPF top-up for 3-room or smaller flats or $1 for every $6 CPF top-up for 4-room flats.
CPF Top-Up: For flats with one owner, they will need to top-up their RA to their age-adjusted Full Retirement Sum (FRS). For households with multiple owners, each co-owner will need to use their share of the proceeds to top-up their RA to the current age-adjusted Basic Retirement Sum (BRS). Any excess proceeds after you topped-up your RA can be withdrawn in cash, up to a maximum of $100,000. Additional proceeds beyond $100,000 will need to be used to further top-up homeowners’ respective RA to the current FRS.
| Flat Owner’s Age | Top-up Requirement For One Owner | Top-up Requirement For Multiple Owners |
| 65 to 69 | $171,000 | $85,500 |
| 70 to 79 | $161,000 | $80,500 |
| 80 and above | $151,000 | $75,500 |
Read Also: Here’s What Your CPF Full Retirement Sum Might Look Like When You’re 55
Eligibility For HDB Lease Buyback Scheme
The eligibility criteria has been greatly expanded over the years, allowing more Singaporeans the option to participate in the scheme.
| Criteria | Eligibility |
| Age | All owners must be at least 65 or older |
| Citizenship | At least one owner must be a Singaporean |
| Income | Have a gross monthly household income of $12,000 or less |
| Property Ownership | No current ownership of second property |
| Minimum Occupation Period (MOP) | All owners must fulfilled the MOP of 5 years |
| Minimum Lease | There must be at least 20 years of lease remaining |
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Conditions You Should Know About Once you enrol in the HDB Lease Buyback Scheme, your lease is non-transferable in the open market, which means you cannot sell or sublet your flat. If you wish to end your lease prematurely, you would need to return it to HDB and receive a pro-rated refund based on the remaining lease. |
Application Procedure And Fees
If you’ve carefully considered and would like to make use of the HDB Lease Buyback Scheme, study the application procedure in detail first.
These are the fees payable for your application under the current Lease Buyback Scheme: an admin charge of $100, which will be deducted from the proceeds from the sale of the tail-end lease and legal fees of between $300 to $500, which will be deducted from the proceeds from the sale of the tail-end lease.
This article is republished with permission from Dollars and Sense.
