MORE than 12,000 households have taken up the Housing & Development Board’s (HDB) Lease Buyback Scheme since its inception in 2009, with nearly 90 per cent receiving between S$100,000 and S$300,000 from it.
In an update on the scheme, HDB said 53 per cent of the 12,656 households that opted for the scheme lived in three-room flats or smaller. About 33 per cent lived in four-room flats and the remaining 14 per cent lived in five-room or bigger flats.
The yearly take-up rate has “remained steady” with about 1,680 households on average opting for the agency’s Lease Buyback Scheme, added HDB.
In the first half of 2024, 892 households took it up.
Under the scheme, eligible seniors can sell a portion of their flat’s remaining lease back to the housing authority. These seniors must be aged 65 or older with a gross monthly household income of S$14,000 or less. They must have also lived in the flat for at least five years, have at least 20 years of lease to sell to HDB, and must not own another private residential property.
The proceeds of the sale are then used to top up owners’ Central Provident Fund (CPF) Retirement Account and purchase a CPF Life plan, which provides monthly payouts for life. Any excess after the retirement account top-up will be returned to them in cash.
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This allows seniors to receive a lump sum payment, as a form of retirement income, while continuing to live in their flats for the rest of their lives.
The bulk of households that signed up for the Lease Buyback Scheme – at 60 per cent – chose to retain 30 years of their lease. Around 5 per cent opted for 35 years, nearly 20 per cent for 25 years, around 10 per cent for a 20-year lease, and 5 per cent for a 15-year lease.
Additionally, HDB noted that the majority of households received cash proceeds after topping up their retirement account. Households that enrolled in the CPF Life plan received a median monthly payout of about S$1,000.
Besides the cash proceeds, households that topped up their retirement account also received a cash bonus of S$7,500 to S$30,000, depending on their flat type and contribution to the account.
To receive the full S$30,000, owners would have to contribute S$60,000 or more from their net proceeds to their retirement account. As at end-June, around 93 per cent of households that took up the scheme received the full bonus.
Other than the Lease Buyback Scheme, HDB said seniors can also choose to rent out their entire flat or bedrooms in the flat to supplement their retirement income.
In the first six months of this year, elderly households made 10,301 applications to rent out the whole flat and 21,219 applications to rent out bedrooms.
