If you watched our Prime Minister Lee Hsien Loong’s National Day Rally just a few days ago, you should be aware about the upcoming changes to the public housing system in Singapore.
Singapore’s public housing system, managed by the Housing and Development Board (HDB), is one of the most well-known and iconic aspects of Singapore’s good governance.
The refreshed public housing scheme is meant to keep housing affordable and accessible for locals.
It is no wonder that the Plus HDB flats come with additional restrictions.
Here are the restrictions you may want to take note of if you are considering buying a HDB flat.
Plus HDB Flats Owners Have a $14,000 a Month Income Ceiling
The Prime Minister’s National Day Rally revealed a suite of changes to the public housing system.
One of these huge changes was the retirement of the classification of flats as located in mature and non-mature estates.
Instead, the upcoming build-to-order (BTO) flats will be classified as Standard, Plus or Prime. The Standard flats are the most basic, while the Prime flats are the most “luxurious”. The Plus flats lie in between both ends of the spectrum.
In particular, the Plus flats are located in choicer locations, such as near amenities like MRT stations or town centres.
What, then, does it take for you to own a Plus flat?
Having enough cash to purchase a Plus flat is not enough. You have to be beneath the income ceiling of $14,000 a month.
This is part of the restrictions which Minister of National Development, Desmond Lee, announced recently.
This applies whether you are purchasing the flat alone (as a single) or as a family (with multiple people owning the HDB flat).
In short, to get a Plus HDB flat, you have to be rich (as these flats are not cheap) but also not too rich (in which case, it looks like private property is a better bet).
If you are able to cross the monthly income hurdle, you may still want to think twice about buying a Plus HDB flat.
Those who aspire to “flip” public housing flats to make a quick buck could be discouraged by the suite of measures put in place to prevent abuse of the public housing system.
For example, subsidies which were granted to the Plus HDB flat buyers may be clawed back upon the sale of the flat.
Also, you have to note that purchasing the flat for renting out will no longer be such a lucrative option.
Entire Plus HDB flats cannot be rented out at any point. This restriction applies even if you have passed the ten-year minimum occupation period (MOP), after which you can consider renting or selling your house.
What do you think about these measures?