1 March 2009
HDB Lease Buyback Scheme kicks off
By Pearl Forss, Channel NewsAsia

SINGAPORE : Singapore's Housing and Development Board Lease Buyback
Scheme started on Sunday, after two years in the works.

Five applications were received in the first hour.

The scheme is designed to help cash-poor, asset-rich seniors meet
their retirement needs.

72-year-old Koh Chiong Eng is afraid he may lose his petrol pump
attendant job soon because of his age.

If that happens, meeting daily expenditure will become difficult, as
his wife does not work.

Hence, they were among the first in Singapore to sign up for the
Lease Buyback Scheme - where HDB buys back the tail-end of the lease
of their flat, leaving them with a shorter 30-year lease.

They will get a first-time payout of S$5,000, and monthly payments of
about S$600 till death. The amount is calculated based on the
estimated valuation of their 3-room flat - at S$236,000.

The payout varies depending on the valuation of the flat, done by
independent assessors.

An estimated 25,000 households are eligible for the scheme, and
concerns have been raised about some seniors' reluctance to part with
their properties. But it is not an issue with Mr Koh.

He said: "I can't take the flat with me if I die. It is better to
sell it to the government and get money to meet my daily needs."

Some seniors are also reluctant because of the Asian value of leaving
property to their children. Commenting on the issue, National
Development Minister Mah Bow Tan said: "I hope at the same time,
their children will also look after them. But you and I know that
this is not a given."

Seniors will get to stay in their homes for 30 years after they sign
up. And if they are still alive after the 30-year lease, alternative
arrangements such as nursing home stays will be made for them.

Mr Mah said: "The benefit of the scheme really is, you stay where you
are and you get a rental income. My instruction to HDB is to make
sure that as many eligible elderly households as possible are
familiar with the scheme."

So HDB will organise exhibitions at 11 towns with a high elderly
population. Officers will also go door-to-door to invite the elderly
to the exhibitions.

To be eligible, home owners must be 62 years old and above, enjoyed
only one housing subsidy, and almost paid off their home loan.

The scheme is not open to those living in four-room or larger flats.
Mr Mah said this is because they have the option of downgrading to
unlock the value of their homes, and get cash. But he said HDB may
consider extending the scheme to them if there is sufficient demand.