Waiver of Accrued Interest on Resale Levy of HDB Flats
Ministry of National DevelopmentSpeakers
Summary
This question concerns Mr Gan Thiam Poh’s inquiry regarding the waiver of accrued interest on HDB resale levies and the support provided to second-time flat buyers. Minister for National Development Lawrence Wong explained that while post-2006 policies exclude interest, older deferred payments incurred a 5% annual compound interest. HDB received approximately 4,200 appeals to reduce the levy between 2012 and 2016, approving 1,729 cases based on individual merits. The Minister highlighted that accrued interest is waived for elderly right-sizers and flexibility is exercised for households facing financial difficulties. Impacted individuals are encouraged to approach HDB for assistance tailored to their specific circumstances and housing needs.
Transcript
30 Mr Gan Thiam Poh asked the Minister for National Development (a) in the past five years, how many appeals have been received by HDB on waiver of accrued interest on the resale levy of HDB flats; (b) whether HDB will assist second-time buyers of HDB flats with the large amounts of accrued interest on the resale levy; and (c) what is the assistance rendered by HDB to these appellants.
Mr Lawrence Wong: Singaporeans enjoy a significant housing subsidy when they buy a new flat from the Housing and Development Board (HDB), or a resale flat in the open market with a Central Provident Fund (CPF) housing grant. They can also buy a second new flat from HDB but, as second-timers, they are no longer eligible for the full subsidy which is meant for first-timers only. Hence, the resale levy is imposed on all second-time buyers of HDB flats.
Under the current resale levy policy which has been in place since March 2006, second-timers pay the resale levy upon the sale of the first subsidised flat or on the collection of keys to the second flat, whichever is the later. There is no interest component.
However, we recognise that there are some second-timers who had sold their first HDB flat before 2006. Under the prevailing policy then, they were subject to a compound interest of 5% per annum if they chose to defer the payment of the levy until they collect the keys to their second subsidised flat. Some of them are now looking to purchase a second flat from HDB but face high interest on their resale levy accumulated over the years.
HDB does not track the number of appeals it has received specifically for a waiver of the accrued interest on the resale levy. However, for appeals to reduce the resale levy payable in general, HDB received about 4,200 appeals from 2012 to 2016, and acceded to 1,729 appeals.
In 2015, we waived the accrued interest on the resale levy payable by elderly second-timers who wished to right-size to a smaller flat. Beyond the elderly, HDB has also been exercising flexibility for other affected second-timers who are in need and will continue to do so. Those who require assistance, such as households who face financial difficulties or wish to right-size to a smaller flat, can approach HDB, and we will see how best to help them.