Photo: Andrea Ang on Unsplash
If you’re buying an HDB flat in Singapore for the first time, you’re just beginning to realise how much it costs to live in what is essentially a tiny space in the sky. Fortunately there are HDB grants to help those of us who aren’t exactly rolling in cash.
HDB grants are technically CPF housing grants, since they are disbursed in the form of CPF top ups and have to be returned to your CPF when you sell the flat. Still, that’s not gonna stop most Singaporeans from seeing them as “free money” or “gahmen give discount”.
The thing is, these grants are a confusing bunch, with different conditions to fulfil before you can qualify. This article breaks down the requirements and how you can get as much as you can qualify for.
HDB grants (i.e. CPF housing grants) at a glance
CPF (or HDB) Housing Grants are given to lower- and middle-income families to help make their home purchases more affordable.
The grants will be fully credited into an applicant’s CPF Ordinary Account (no, you don’t get to see it in cash) after flat booking, and and be used to offset the purchase price of the flat, hence lowering the home loan amount required.
Assuming you’re applying for an HDB flat as a couple, you’re both Singapore citizens, and are first time buyers, this is an overview of HDB grants available for different housing types:
|HDB type||CPF housing grant||Income ceiling||Grant amount|
|BTO / resale||Enhanced CPF Housing Grant (EHG)||$9,000||$5,000 to $80,000|
|Resale||Family Grant||$14,000||$40,000 to $50,000|
|Resale||Proximity Housing Grant (PHG)||None||$20,000 to $30,000|
|EC||Family Grant||$12,000||$10,000 to $30,000|
Totalling it up, this is the maximum grant you can get for the different flat types, assuming you qualify for all:
HDB BTO grant: EHG = $5,000 to $80,000 (also applies to new HDB flats under SBF or ROF)
HDB resale grant: EHG + Family Grant + PHG = $65,000 to $160,000
EC grant: Family Grant = $10,000 to $30,000
Wondering why the HDB grant structure looks different from how you remembered it? That’s because HDB has updated the housing grants recently, effective 11 Sep 2019. Previously, there were different grants available for varying income tiers, but now HDB has consolidated it all into one catch-all: The Enhanced CPF Housing Grant (EHG).
The rest of the grants remain the same, but since the new EHG is near-universal, almost everyone will be affected in some way. Let’s go into each of the 4 grants, one by one.
#1 Enhanced CPF Housing Grant (EHG) — for HDB BTO & resale
Who is it for: Couples / families earning $9,000 or less per month, calculated as average household income across the past 12 months. At least one applicant has to be working for at least a year.
HDB flat eligibility: Both new (BTO / SBF / ROF) and resale flats are eligible. For resale flats, the remaining lease + the youngest buyer’s age must be at least 95 years. (That is, the flat lease should be long enough for you to stay in it for your whole life.) Otherwise, the grant will be pro-rated.
Amount: From $5,000 to $80,000. The grant amount is inversely proportionate to your household income, so the less you earn, the more you get.
The Enhanced CPF Housing Grant is a catch-all HDB grant that is meant to help lower- to middle-class couples afford a home.
Previously, the income-related HDB grants were more restrictive. In order to get the maximum grant, you had to apply for a smaller BTO flat in a non-mature estate. Resale HDB flats and BTOs in mature estates entitled you to a much smaller grant,
The new consolidated Enhanced CPF Grant, however, is applicable to all HDB BTO and HDB resale flats and there is no restriction on flat size or estate. Woohoo!
What about singles? Singles aged 35 applying for a resale HDB flat are eligible for EHG. Naturally, the income requirement is halved, and the amount you get is also halved. (For BTO flats, though, the old 2-tier grant system is still in place.)
#2 Family Grant a.k.a HDB Resale Grant — for HDB resale flats
Who is it for: First-timer couples / families buying a resale flat. The combined income ceiling for couples is $14,000 (effective 11 Sep 2019; was originally $12,000). If you’re applying together with more family members, such as with your parents, the household income ceiling is $21,000.
HDB flat eligibility: Any resale flat, 2-room and larger. For 5-room flats or larger, you can still get a Family Grant, but the amount is $10,000 less.
Amount: For couples / families who are all Singapore citizens, the Family Grant is $50,000 for 2- to 4-room flat ($40,000 for 5-room and up). If you are applying as a citizen-PR couple, you get $10,000 less, but you can get it back later on if the PR converts into citizen or if you have a child.
Buying an HDB resale flat is a good option for those who don’t want to wait years for a BTO / want complete control over the fengshui of their flat.
But since HDB resale prices are unsubsidised and usually more expensive than BTOs, applicants are entitled to a significant one-off HDB grant called the Family Grant.
The grant amount is based on your citizenship status, as well as the size of the HDB flat. The maximum grant is for families with at least 2 Singapore citizens, who buy smaller flats.
Now that you can “stack” the Family Grant together with the new EHG (above), HDB resale flats are starting to look a whole lot more attractive as a first home for engaged couples / newlyweds.
These 2 HDB grants essentially level the traditional price difference between resale flats and BTOs, making resale viable even if your household income is not very high.
What about singles? There’s a singles version of this, known as the Singles Grant. As with the EHG, the income ceiling and grant amounts are halved. The Singles Grant is $25,000 for a 2- to 4-room resale flat, or $20,000 if you buy a 5-room resale flat.
#3 Proximity Housing Grant (PHG) — for HDB resale flats
Who is it for: HDB resale flat buyers who want to live with, or within 4km of, their parents. It also applies to older couples who want to move closer to their married children. There is no income ceiling and you do not have to be a first-time applicant.
HDB flat eligibility: Any resale HDB flat (2-room or bigger) as long as the lease has at least 20 years left. (Note: The parents’ / married children’s home need not be HDB flat; it can be private property too.) This is a one-time grant.
Amount: For buyers applying as a couple / family unit, you get $30,000 if you opt to live together, or $20,000 if you live separately but within the 4km radius.
There are lots of advantages to living with or near your parents, especially if they’re retired. They can look after your young children. They can sign for deliveries that come during the day while you’re out at work. They can tell your spouse how to be a better child-in-law.
Okay, that last one might not be an advantage…
If you have an okay relationship with your parents / in-laws, it’s a good idea to consider the Proximity Housing Grant when shopping for a resale flat.
Even if you don’t want to live together in the same flat, you can still find a place within 4km (near enough to be convenient but not claustrophobic) and get a $20,000 grant. Note that this can be stacked with the EHG and Family Grant, which really stretches your dollar when it comes to buying a resale flat.
What about singles? Don’t worry, the Proximity Housing Grant applies to filial singles too. As with all the other grants, you get half the grant amount. Not a bad reward for ensuring you can always go visit your parents for dinner whenever you feel like it.
#4 Family Grant — for HDB executive condominium (EC)
Who is it for: First-time housing applicants applying for an executive condo as a couple or family unit, with a household income ceiling of $12,000.
HDB flat eligibility: ECs of any type, when bought directly from the developer. You can apply for the Family Grant at the point of booking your EC unit.
Amount: Assuming the buyers are both Singapore citizens, you can get $10,000 to $30,000, depending on your income. For citizen-PR households, the income ceiling is lowered to $11,000 and the grant is $10,000 less. You can get a $10,000 top-up later on if you have a child or the PR converts into a citizen.
All ECs start their lives as quasi-public housing that’s geared towards the “sandwich class” of middle-bordering-on-higher income families / couples. Therefore, first-time homeowners can also benefit from a Family Grant, although it’s less than what you would get for a resale flat.
If one of you is a first-timer and the other is a second-timer — like, say, you met after one of you got his / her HDB flat under the singles’ scheme — you can also qualify for the “Half Housing Grant”, which is basically half of the Family Grant.
What about singles? Erm… Sorry, singles are not even allowed to buy brand new ECs, at least on your own. You have to apply jointly with another single. And of course, both of you must be at least 35. However, there’s no grant available if you do so.
So for example…
Let’s say you and your fiancee (straight couple, both citizens) are fresh grads, have been working for a year, and command a princely $6,000 a month in combined salaries.
You may be feeling pretty broke at this point, but, assuming your relationship does work out, it’s also the best time to apply for an HDB flat since your income is at its all time low (so you qualify for all public housing types and for most grants).
Here’s how the HDB grants factor into your options:
|Purchase price||HDB grant amount||Final price|
|HDB BTO||$350,000||$35,000 (EHG)||$315,000|
|HDB resale flat||$450,000||$50,000 (Family Grant) + $35,000 (EHG) + $20,000 (PHG) = $105,000||$345,000|
|Executive condo||$800,000||$30,000 (Family Grant)||$770,000|
As you can see, the stacked HDB grants close the gap between HDB BTOs and resale flats.
Now let’s consider another couple who are a few years into their careers and earning a combined $9,000 a month. Perhaps at this point, they may be considering only HDB flats in the more prestigious “top school” locations, which impacts the price of the properties:
|Purchase price||HDB grant amount||Final price|
|HDB BTO||$550,000||$5,000 (EHG)||$500,000|
|HDB resale flat||$650,000||$50,000 (Family Grant) + $5,000 (EHG) + $20,000 (PHG) = $75,000||$575,000|
|Executive condo||$800,000||$30,000 (Family Grant)||$770,000|
The HDB grants level out the playing field a little, although the price disparities are still there. However, they may not mind paying more for a resale flat if it means not having to wait another 3 or 4 years to start having kids. Meanwhile, they qualify for the maximum possible grant for an EC. So if they are confident about taking on this financial burden, then it might be quite worth it to spring for an EC.
Other things you should note about CPF housing grants
There are just 3 quick points we need to make:
#1 You may need to pay a resale levy when buying a new property
If you buy a new HDB flat, or receive a CPF Housing Grant, you will need to pay a resale levy if you plan to buy another new HDB flat or a new EC unit. This is the government’s way of ensuring you don’t enjoy too many property subsidies in your lifetime.
The amount of the resale levy is based on the size of your first HDB flat. There is no resale levy if you buy a resale flat or private property.
#2 You can’t use the grants to skip out on your downpayment or monthly repayment
All the HDB grants are used to subsidise the initial purchase price — you cannot use it to avoid making any home loan repayments.
If you have taken out a bank loan, you will need to pay 5% of the purchase price in cash. You can’t use the grants to pay that portion. You also can’t use the grants to offset entire monthly repayments.
If you’re trying to decide between taking an HDB loan or bank loan, you can easily speak to MoneySmart’s Mortgage Specialists to figure out which makes more financial sense for you.
#3 What if my spouse is not a Singapore Citizen/PR, but we’re both first time buyers?
As a general rule of thumb, you would get half of the amounts stated above, since the amounts above are intended for 2 Singapore Citizens/PRs. Simple right? Still, it’s best to check with an HDB officer to get confirmation.
This article originally appeared on MoneySmart.