15/02/2006- News Release By Central Provident Fund Board Housing & Development Board
The CPF Board will continue to pay interest to its members at the rate of 2.50% per annum for CPF savings in their Ordinary Account from 1 April 2006 to 30 June 2006. The CPF interest rate is reviewed quarterly.
The computed CPF interest rate derived from the major local banks' interest rates for the three-month period, 1 November 2005 to 31 January 2006, works out to be 0.73% per annum. However, the Board will be paying the higher rate of 2.50% per annum as the CPF Act provides for a minimum CPF interest rate of 2.50% per annum. This minimum rate is higher than the 12-month fixed deposit and savings rates of the major local banks for the November 2005 to January 2006 period.
Savings in the Medisave Account, Special Account and Retirement Account will earn interest at 4.00% per annum. This is 1.5 percentage points higher than that for the Ordinary Account.
The concessionary interest rate for HDB mortgage loan, which is pegged at 0.1 percentage point above the CPF interest rate for the Ordinary Account, will remain unchanged at 2.60% per annum from 1 April 2006 to 30 June 2006.
The next revision of the CPF interest rate will be made on 1 July 2006.
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COMPUTATION OF CPF INTEREST
RATE AND HDB MORTGAGE RATE FOR
APRIL 2006 TO JUNE 2006
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|
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12-MONTH DEPOSIT RATE
(% PA)
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SAVINGS RATE
(% PA)
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AVERAGE
80FD:20SD
(% PA)
|
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MONTH/YEAR
|
DBS (1)
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OCBC (2)
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UOB (3)
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DBS (4)
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OCBC (5)
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UOB (6)
|
|
30 Nov 05
|
0.8250
|
0.8250
|
0.8250
|
0.3500
|
0.2500
|
0.2500
|
0.7167
|
|
31 Dec 05
|
0.8250
|
0.8250
|
0.8250
|
0.3500
|
0.5000
|
0.3000
|
0.7367
|
|
31 Jan 06
|
0.8250
|
0.8250
|
0.8250
|
0.3500
|
0.5000
|
0.3000
|
0.7367
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(A)
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NORMAL CPF INTEREST RATE
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Average for 3 months (NOV 2005 TO JAN 2006)
(Using the 80 FD : 20 SD formula)
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0.73%
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(computed interest rate)
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|
|
|
|
|
|
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CPF Interest Rate for APR 2006 TO JUN 2006
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2.50%
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(legislated minimum rate)
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|
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(B)
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HDB MORTGAGE RATE
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|
|
|
|
|
|
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CPF Interest Rate for APR 2006 TO JUN 2006
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2.50%
|
|
|
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Plus: Fee to cover Cost of Loan
Administration
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0.10%
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|
|
|
|
|
|
|
|
|
--------
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HDB Mortgage Rate for APR 2006 TO JUN 2006
|
2.60%
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|
|
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--------
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NOTES:
(1) Balances between $20,000 to < $50,000
(2) Balances > $20,000 to $50,000
(3) Balances < $50,000
(4) Balances > $3,000 to $50,000 (AUTO-SAVE Account)
(5) Balances > $5,000 to $50,000 for Nov 05 (EASI-SAVE Account)
Balances > $10,000 to $50,000 for Dec 05 and
Jan 06 (EASI-SAVE Account)
(6) Balances > $3,000 to <$50,000 (UNIPLUS Account)
Phasing out of HDB's Listed Housing Agents Scheme (LHAS)
The Singapore Accredited Estate Agencies (SAEA) Scheme was launched on 11 November 2005. It will be jointly administered by the Singapore Institute of Surveyors and Valuers (SISV) and the Institute of Estate Agents (IEA). Together with the Ministry of Finance and Inland Revenue Authority of Singapore, HDB has worked with SISV and IEA to develop the accreditation scheme. The scheme sets the guidelines, minimum educational standards and
practice standards for real estate agents.
Although it is not mandatory for resale flat buyers and sellers to engage housing agents, the majority of resale flat transactions are facilitated by housing agents. Hence, housing agents play an important role in facilitating the buying and selling of flats in the open market. The Listed Housing Agents Scheme (LHAS) was implemented by HDB in Dec 1995 to encourage housing agencies to adhere to HDB's rules and procedures when handling resale flat transactions. Currently, 275 agencies with some 4,000 agents are under this scheme.
Since the LHAS and SAEA schemes share the same objective of instilling greater professionalism in the estate agency industry, HDB will phase out the LHAS on 1 June 2006. The benefits enjoyed by the listed agencies under LHAS will be cut-over to the accredited agencies under the SAEA Scheme. SAEA accredited agencies will be given priority in the 1st appointment date for resale transactions and exclusive subscription to the HDB-ResaleNet System.
Existing listed housing agencies who join the SAEA Scheme by 31 March 2006 will enjoy a 50% discount on the accreditation fees.
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03/03/2006- Additional CPF Housing Grant, Building of 2-Room Flats and Revised Resale Levy
Minister for National Development has announced in Parliament during the Committee of Supply debate on 3 March 2006 that the Additional CPF Housing Grant will be implemented with immediate effect. He has also announced details of the new 2-room flats that HDB will build, as well as changes to the HDB resale levy policy.
Additional CPF Housing Grant
The Additional CPF Housing Grant (AHG) is meant for lower-income families who are financially ready to own an HDB flat but who need some assistance to buy their first flat. The grant is given to eligible families on top of the existing housing subsidies they would get when they buy a flat from the HDB or when they buy a resale flat from the open market. It aims to help such families to become homeowners so that they can progress together with other Singaporeans as one people.
Currently, eligible first-timer Singapore Citizen households can buy a new flat from HDB at subsidized prices. For those who purchase a resale flat from the open market, they can apply for a CPF Housing Grant of $30,000/$40,000.
To help first-timer lower-income households to level up and become homeowners, they will be given an additional housing subsidy of between $5,000 and $20,000 in the form of an Additional CPF Housing Grant when they buy a new or resale HDB flat.
To be eligible for the grant, at least one of the flat buyers must have worked continuously for at least two years when they apply to buy the flat. Buying a flat is a long-term financial commitment and flat buyers should purchase one within their means.
The income of applicants for the Additional Housing Grant will be based on the average monthly income of the household over the 2-year period and must not exceed $3,000. This income will be used to determine the amount of grant the household will receive, which is graduated over four income brackets to give more assistance to those earning less.
| Average Monthly Household Income
over the last 2 years |
Quanta for Additional CPF Housing
Grant |
| $1,500 or less |
$20,000 |
| $1,501 - $2,000 |
$15,000 |
| $2,001 - $2,500 |
$10,000 |
| $2,501 - $3,000 |
$5,000 |
6,000 households, or roughly 40% of the first-timers applying to buy HDB flats, are expected to benefit from the grant annually.
The Additional Grant will be provided to eligible first-timer households for their purchase of new and resale HDB flat. The cut-off dates for application are as follows:
| Category of Flats |
Cut-Off Date |
| Purchase of New Flats |
Date of Booking of Flats |
| Purchase of Resale Flats |
Date of Resale Application |
Like the existing CPF Housing Grant, the Additional CPF Housing Grant can only be used as capital payment for the purchase of the HDB flat. Upon the sale of the flat, the Additional Grant has to be reinstated to the recipient's CPF account, according to the prevailing CPF Board's rules. Click here for the eligibility conditions and the procedure to request the Additional CPF Housing Grant.
The Additional CPF Housing Grant will only be given once to each eligible family. In addition to the current eligibility conditions to buy a new flat, you will have to meet the following eligibility conditions to request the Additional CPF Housing Grant:
Family Nucleus
You are applying with
your:
· Spouse; or
· Fiancé fiancée*; or
· Parents and siblings; or
Children
under your legal custody (if you are widowed or divorced).
*Special Condition - You must submit
a copy of your marriage certificate to HDB on or before you take possession
of the flat.
Employment Status
You or your co-applicant(s) must be in continuous employment for 2 years before the flat application.
Income Ceiling
Your average gross household income for the 2-year period does not exceed $3,000 a month. Please click here for the guidelines for assessment of household income.
Household Status
You and the other essential family members listed in the application for purchase of the flat:
· are currently not owners of a flat bought direct from HDB or a resale flat bought with the CPF housing grant; and
· have never sold a flat bought direct from HDB or a resale flat bought with the CPF housing grant; and
· have not enjoyed other forms of housing subsidy (for example, bought an Executive Condominium from developer, enjoyed benefits under the Selective En bloc Redevelopment Scheme, privatization of HUDC estate etc).
Undischarged Bankrupt
The recipients of the housing grant must not be an undischarged bankrupt.
Example: How AHG can help you to buy your first new flat
Mr A, aged 36, has been working continuously for the past two years. His wife is not working.
| Average monthly household income |
$1,500 |
| Savings in CPF Ordinary Account |
$8,000 |
| Amount of AHG eligible for |
$20,000 |
| Buying a 3-room flat from HDB |
$100,000 |
Benefits of AHG
· No need cash for down payment
· AHG helps to reduce the loan required
· No need to use cash to pay the monthly installment
If you are buying the flat with a bank loan, the AHG will be treated as part of your CPF fund. It can be used to pay for the CPF portion of the initial payment towards the purchase of the new flat or to reduce the mortgage loan. It will be included in the computation of the CPF withdrawal limit. The Grant cannot be used to pay the monthly installments.
Buying a New Flat under the DBSS
If they buy a new flat in Tampines from the developer under the Design, Build and Sell Scheme, they can request the Additional CPF Housing Grant, on top of the CPF Housing Grant for Family.
Building Of New 2-Room Flats
To provide low-income households with more affordable housing options, HDB will re-commence the building of 2-room flats later this year for sale to eligible applicants. For a start, HDB will offer about 90 units under the Build-to-Order (BTO) System in Sengkang by the middle of this year.
To ensure that those with higher income do not compete with lower-income households for the new 2-room flats, the monthly household income for purchase of these flats must not exceed $2,000 per month. All the eligibility conditions for the purchase of a new flat from HDB, such as citizenship, family nucleus and non-ownership of private property will apply to the new 2-room flats.
The monthly household income ceiling for the purchase of 3-room buy-back flats under the monthly Walk-In Selection (WIS) Exercise will be revised from $2,000 to $3,000 with immediate effect. This would enable more households to qualify for the purchase of these flats. Following the revision, the monthly income ceiling for the purchase of 3-room flats from HDB under the various modes of sale (BTO, Balloting Exercise, WIS) will all be aligned at $3,000.
Revision Of Resale Levy Policy
Singapore Citizen households enjoy a housing subsidy when they buy a new flat from HDB or a resale flat in the open market with a CPF Housing Grant. Each family can purchase a maximum of two subsidized flats. The resale levy reduces the subsidy on the second subsidized flat to ensure a more equitable allocation of subsidies between first- and second-timer citizen families.
The resale levy is currently computed as a percentage of the transacted resale price or 90% of the market value of the first subsidized flat, whichever is higher. This percentage ranges from 15% for a 2-room flat to 25% for an Executive flat. Under the current policy, the levy is payable at the point of resale of the first subsidized flat. The ex-lessees, now classified as second-timers, are allowed to defer the payment of the resale levy with interest until they purchase the second subsidized flat from HDB. They are not required to pay the levy if they do
Not buy another subsidized flat from HDB.
Under the revised policy, the resale levy will be a fixed amount, pegged to the flat type of the first subsidized flat. This makes it clear how much levy is payable and lessees can plan ahead if they need to buy a second subsidized flat from HDB. The levy is payable only when the second-timer purchaser buys another subsidized flat from HDB. As with the current resale levy,
It will have to be paid for in cash, to ensure financial prudence.
The amount of resale levy by flat type payable under the new policy is as follows:
| First Subsidized Flat Type |
New Resale Levy |
| 2-room |
$15,000 |
| 3-room |
$30,000 |
| 4-room |
$40,000 |
| 5-room |
$45,000 |
| Executive Flat |
$50,000 |
For single citizens who purchased resale flats with the lower CPF Housing Grant for Singles, they need only pay half the levy quantum when they subsequently form a family and buy a
second subsidized flat from HDB.
The revised resale levy policy will only apply to second-timer applicants
who book their second subsidized flat from HDB and submit their application
to sell their first subsidized flat, on or after 3 Mar 2006.
The cut-off date to apply the revised resale levy policy for the various methods of submitting resale applications to HDB is as follows:
| Method of Submitting Application |
Cut-off Date Based On |
| ResaleNet |
Date of receipt of application via ResaleNet |
| e-Resale |
Date of receipt of application via e-Resale |
| Drop Box at Toa Payoh HDB Hub |
Date of receipt of application in the Drop Box |
| By Post to HDB |
Date of Postmark by Singapore Post |
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