Families are more encouraged to right-size their HDB flats since the Government has made the Silver Housing Bonus (SHB) Scheme more attractive from 1 February 2013. The top-up requirement per household was lowered to $60,000 which is subject to a $100,000 cap on cash proceeds for those who have not achieved the prevailing Minimum Sum (MS). The SHB provides additional help to lower-income elderly households who right-size from a larger flat to a smaller flat and use their net sale proceeds to enhance their retirement income.
But what happens if your household is unable to top up the full $60,000 into your CPF Retirement Accounts (RA) because your net sale proceeds amount below $60,000 or you would exceed the prevailing MS if you do so? You will receive a $1 cash bonus for every $3 you could top-up. Which means that for example, your net sales proceeds amount is $58,667 you only need to top-up an additional $1,000 and you will receive a cash bonus of $333.
What are the enhancements to the SHB Scheme?
Previously, elderly households were required to use all the net sales proceeds to top up their RA up to the prevailing MS; and they would receive a $20,000 bonus to the household – $15,000 cash and $5,000 CPF top-up.
But now, elderly Singaporeans will need to top up less of their net sale proceeds, and the $20,000 bonus will now be given entirely in cash.
How to compute the net sale proceeds?
The net sale proceeds are calculated as follows:
Net sale proceeds = selling price of the existing property less any outstanding loan on the existing property, refund to CPF Account, resale levy, deductible of up to $15,000 for ancillary costs, and cash used for the purchase of next property.
How to right-size?
If you own a bigger flat type, you can choose to right-size your flat and supplement your retirement income through the SHB scheme.
You can choose to right-size by selling your existing flat and buying either:
- Smaller and cheaper flat from the resale market, or
- Smaller flat from the HDB, such as a 2-room Flexi or 3-room flat
How to qualify for SHB?
To qualify for the SHB, eligible elderly households must either:
- Book a new HDB flat or studio apartment or
- Apply to buy a resale flat before selling their existing property or within 6 months of completing the sale of their existing property.
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