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Extra grant for HDB buyers
- Feb 6 2009 |
HOUSEHOLDS earning up to $5,000 a month will get an extra subsidy to buy
their first home.
National Development Minister Mah Bow Tan on Friday announced in Parliament
details of the enhanced Additional CPF Housing Grant Scheme (AHG) to help
first-timers buy a home.
Background of additional housing grant scheme
The Government first introduced the AHG on March 3 2006 to help lowerincome
citizen families buy their first HDB flat. It was enhanced in August 2007,
with a higher income ceiling of $4,000 (from $3,000) and a higher maximum
grant of $30,000 (from $20,000).
To date, the AHG scheme has disbursed about $140 million to help about
10,000 families buy their first flat. The beneficiaries of the AHG have
extended beyond the lower income to the middle-income families.
... more
The scheme, introduced in March 2006, is an additional grant over and above
the regular market subsidy and CPF Housing Grant that new and resale flat
buyers enjoy respectively. It offsets the purchase price of a new or resale
HDB flat, thereby further reducing the loan a flat buyer needs to take.
The enhancements are:
* Increase in the income ceiling from $4,000 to $5,000. This will increase
the coverage of the AHG from 50 per cent to 60 per cent of resident
households.
* Increase in maximum grant quantum from $30,000 to $40,000.
* Reduction of the two-year continuous employment condition to one year.
The enhanced AHG will make owning an HDB home within easier reach,
especially for the lower-income. For instance, a family with a monthly
household income of $1,500 can comfortably own a new two-room HDB flat
priced at $90,0001.
With the help of the maximum AHG quantum of $40,000, they only have a
monthly mortgage instalment of about $200. This is about 13 per cent of
monthly income and can be serviced entirely from monthly CPF contributions.
The increase in amount will also give more help to middle-income families.
For instance, a family with a monthly household income of $4,000 will get an
AHG of $15,000, an increase of $10,000. They can also get a higher CPF
Housing Grant of $40,000 if they stay near their parents.
This revision, to take effect from Feb 6, is expected to benefit an
additional 2,700 first-timer HDB buyers yearly, bringing the total
benefiting households to about 8,000 a year.
Overall, it will almost double the estimated cost of the scheme to
Government to about $150 million per year.
Background of additional housing grant scheme
The Government first introduced the AHG on March 3 2006 to help lowerincome
citizen families buy their first HDB flat. It was enhanced in August 2007,
with a higher income ceiling of $4,000 (from $3,000) and a higher maximum
grant of $30,000 (from $20,000).
To date, the AHG scheme has disbursed about $140 million to help about
10,000 families buy their first flat. The beneficiaries of the AHG have
extended beyond the lower income to the middle-income families.
Implementation Details
As with the current scheme, the enhanced grant is to be used as capital
payment for the flat purchase. Upon subsequent sale of the flat, the AHG has
to be reinstated to the recipient's CPF account, according to the prevailing
CPF Board's rules.
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