Proposal to Use Life Expectancy Factor of 83.5 Years When Calculating CPF Savings for Property Purchases
Ministry of National DevelopmentSpeakers
Summary
This question concerns MP Foo Cexiang’s proposal to align Central Provident Fund (CPF) property purchase lease requirements with the average life expectancy of 83.5 years instead of the current 95-year threshold. MP Foo Cexiang highlighted that the 95-year rule hinders specific groups, such as mid-career renters and long-term Housing and Development Board (HDB) tenants, from transitioning into homeownership due to affordability and lease tenure issues. Minister Chee Hong Tat responded that the "Home for Life" condition is designed to safeguard retirement and housing adequacy by ensuring the remaining lease covers the youngest owner until at least age 95. Minister Chee Hong Tat noted that using the average life expectancy would leave many seniors without a home if they live longer than 83.5 years. While the Ministry of National Development and HDB will explore appropriate ways to assist these specific categories of residents, Minister Chee Hong Tat emphasized that ensuring a home lasts for life remains a crucial policy safeguard.
Transcript
18 Mr Foo Cexiang asked the Minister for National Development whether the CPF Board will consider aligning the life expectancy factor with the Department of Statistics Singapore's reported average of 83.5 years when tabulating how much CPF savings can be used to purchase a property, instead of the existing 95 years.
The Minister for National Development (Mr Chee Hong Tat): Mr Speaker, our rules on Central Provident Fund (CPF) usage for property purchases are intended to encourage Singaporeans to buy a home for life, which safeguards their housing and retirement adequacy.
Under the current Home for Life condition, the remaining lease must cover the youngest owner till at least age 95. So, if we set the requirement at 83.5 years, many seniors would live longer than this average lifespan.
Mr Foo Cexiang (Tanjong Pagar): Thank you, Speaker. I thank the Minister for his response. And I acknowledge that there are many seniors who are living beyond 83.5 years. At the same time, there are also many others who do not live till 83.5. And in my interactions with several of my residents, I have met a couple of categories who are unable to get onto the home ownership journey but who have extenuating circumstances that I think may merit a deeper look into this requirement.
The two groups of residents are: one, they are renting on the open market, typically mid-career, hit by some midlife crisis, perhaps career, perhaps marriage. Their incomes are too high to rent Housing and Development Board (HDB) flats, but at the same time they cannot own in the private sector. So, therefore rising rental cost in the private market is a big concern for them.
The second category are those who have been renting HDB flats for a long time and they have been making good income, working hard, trying to get out of the rental spiral. However, because of this 95-year-old requirement, they are a couple of years short of a lease tenure of a price that they will be able to afford to own their own HDB flat.
So, I seek HDB's consideration to review whether we can do something for these categories.
Mr Chee Hong Tat: Mr Speaker, I understand where Mr Foo is coming from. And the two groups of residents that he spoke about, I think many of us would have encountered them in our constituencies too. So, certainly I think the Ministry of National Development and HDB will take a look and see what are some of the appropriate ways that we can help these individuals.
But I would say that in helping them, we got to be also mindful that we are helping them not just to find a house for the immediate period, but also for a home that can last them for life. And that is why I think this safeguard of ensuring that the remaining lease can last them till at least age 95 is an important one.
If there are other ways in which we can help them, I think we are open to reviewing and looking at different possibilities.