Enhanced CPF Housing Grants
The Minister for Finance announced that the CPF Housing Grant for first-timer families and singles would be changing in the coming year. The Government have introduced plans to increase Central Provident Fund (CPF) Housing Grants for first time property buyers purchasing HDB homes from the resale market. Families looking to buy their first home will be entitled to an increase from $30,000 to $50,000 in CPF Housing Grants for 4-room or smaller flats and to a total of $40,000 if the family were planning to buy a 5-room or larger resale flat. In combination with the additional CPF Housing Grant and Proximity Housing Grant, young families were previously entitled to up to $90,000 in subsidies but can now they can receive up to $110,000 in subsidies with the enhanced CPF Grants that are coming into effect, depending on the flat’s location, flat type and personal income.
This enhancement of CPF Housing Grants is also available to singles that are buying their first HDB resale flat on the market. For a young person, the CPF Housing subsidy of $15,000 will now increase to $25,000 if you are buying a 4-room or smaller resale flat and will also go up to $20,000 for a five-room resale flat. This means singles can enjoy up to $55,000 in total housing grants when purchasing their first home.
The increase in CPF Housing Grants will take affect for first timer resale applications from 20 February 2017 and is expected to create more affordable housing options for first time buyers alongside buying a new Build-to-Order (BTO) flat from HDB. As Singapore is a small country with limited land, supply of BTO flats might not be able to meet the strong demand. With the increased grants, young families will be able to consider resales public housing in the open market as well. The new enhancement aims to help young families and singles move into new homes sooner and into a specific location of their choosing, whilst encouraging prudent housing choices.
This enhancement of CPF Housings Grants and access to the additional subsidies is predicted to increase resale transactions in the market by 10 per cent. Last year, there was a total of 20,813 resale flats in the market that changed owners and this number is set to increase to more than 22,000 by the end of this year.
The enhancement of CPF Housing Grants for first time family and single buyers is said to cost the Government an additional $110 million per year.