Lease buy-back kicks off next year

Aug 27, 2008
Lease buy-back kicks off next year
By Lee Siew Hua

FROM January next year, elderly home-owners of small flats will
receive $550 each month if they join a new plan to sell part of their
lease back to the Housing Board.

The proceeds from this sale will go to a Central Provident Fund Life
annuity, which gives them a stream of monthly payouts for retirement
even as they continue to stay comfortably in their homes.

This plan is open to people who are at least 62 years old.

Senior Minister of State for National Development Grace Fu yesterday
gave Parliament an update of the scheme, first announced last August
by Prime Minister Lee Hsien Loong.

Said Ms Fu: 'This is really a good solution to cater to a group of
the elderly who probably do not have as many options as those who are
staying in the bigger flats.'

Their two- to three-room flats are 'sizeable assets which they can
monetise' by turning to the lease buy-back scheme, she added,
replying to Madam Cynthia Phua (Aljunied GRC) and Mr Baey Yam Keng
(Tanjong Pagar GRC).

She projected that 25,000 households can sign up for it. This
represents 70 per cent of the elderly who own two- and three-room
flats.

She addressed two common questions.

First, what happens if the flat owner outlives the lease? 'No elderly
will be left homeless,' she assured the House.

One option is to buy a lease extension. But not all can afford this,
so the HDB will assess the housing options of each family and
be 'sensitive' to their financial health, she said.

Next, what happens if an elderly person dies prematurely? In this
case, his estate will receive a 'pro-rated refund on the residual
lease', Ms Fu said.

For the elderly, studio flats are another option and the Government
is building more of these, she noted in her reply to Madam Phua.

Ms Fu said: 'In many of the new estates we are building, two-room
flats are available.

'In fact, they are not as well subscribed as the bigger flats so once
the flats are ready, they are available straightaway.'