Singapore Aging – Maximising Property Value for Senior Citizens


You may have heard countless people ramble on about how the world of investors has no place for emotions, but what if we told you that every investment is the eventuality of a specific configuration of human emotions. In fact, the recent policy shifts in the Singapore property market made it crystal clear how integral social behavior is towards dictating economic trends. The Ministry of National Development raised the proposal of providing a series of incentives for older couples who choose to move out of mature estates in order to move in close to their children in non-mature estates.

This measure not only reflects the triumph of the heartwarming “Closer Families, Stronger Ties” mantra in Singaporean society, but also facilitates a way to free up more units in mature estates, so that it is more financially prosperous for young married children to stay in close proximity with their parents.

According to an MND-commissioned survey conducted on over 2000 Singaporean citizens, nearly 55% of singles claimed that they would ideally prefer to live with their parents after marriage; whereas, 65% of young couples intended to live close to their parents after marriage. As a result, the government has looked into the possibility of green-lighting more Three-Generation flats for joint families as well as financial benefits for older couples shifting from mature to non-mature estates.

While this policy shift is in the pipeline, there are still a number of useful schemes offered by the Singaporean government to enhance the financial portfolio of senior citizens so that they can enjoy a comfortable retirement. Here are a couple of the most popular ones in practice today that can vastly enhance the asset value of the property owned by a senior citizen:

1. The Silver Housing Bonus Scheme

In order to qualify for this scheme, you must be aged 55 and above. Leveraging this option allows senior citizens selling off their HDB flats enjoy a handsome S$20,000 bonus provided they join CPF Life. This housing bonus is remitted by allocating S$15,000 in cash and $5,000 to the CPF accounts of the senior citizens applying for this scheme.

The ideal way to capitalize on this opportunity is to acquire the proceeds from the sale of their old home to boost up their CPF savings to the required Minimum Sum threshold. Therefore, all amounts above this limit can be cashed out by the beneficiary. The Silver Housing Bonus coupled with the CPF kickbacks will offer a great deal of liquidity to the people who choose to exercise this option.

2. Enhanced Lease Buyback Scheme

In order to qualify for this scheme, you must be aged 63 and above, and own a flat with 3 rooms or less. Under this scheme, one can sell part of their flat’s lease to HDB and uphold it for a 30 year term. The monetary proceeds acquired through this deal can be channeled into your CPF Retirement Account along with an cash entitlement worth S$20,000.

On the flipside, the household loses long-term ownership rights to the HDB property and will not be legally cleared to pass it down to the next generation.

What Else to Look Forward To

Apart from these benefits, the Singaporean government is also proactively analyzing the feasibility of a reverse mortgage scheme that can significantly boost the income each household can receive as a more aggressive elixir against the poison of inflation.

By tapping into this scheme, owners retain the lease of their HDB flat in its entirety and take a loan against it as collateral. Upon termination of the loan period or death of the debtor, the principal as well as the interest is recovered by selling the HDB flat. The success of this scheme will be wholly dependent on the structure of the loan offered to the senior citizens.

For those seeking solitude in retirement, there is some great news as property developer WCL announced its plans to build Singapore’s very first retirement living community over 10,170 sq. meters of land in Jalan Jurong Kechil.

 According to the tender granted to them by the government, the project construction must be accomplished by November 2017. The developer plans to build small studio apartments in close proximity with each other along with special infrastructure including activity rooms, cafeterias, restaurants, and medical clinics. 

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