Singapore’s Housing and Development Board Lease Buyback Scheme started on Sunday, after two years in the works.
Five applications were received in the first hour.
The scheme is designed to help cash-poor, asset-rich seniors meet their retirement needs.
72-year-old Koh Chiong Eng is afraid he may lose his petrol pump attendant job soon because of his age.
If that happens, meeting daily expenditure will become difficult, as his wife does not work.
Hence, they were among the first in Singapore to sign up for the Lease Buyback Scheme – where HDB buys back the tail-end of the lease of their flat, leaving them with a shorter 30-year lease.
They will get a first-time payout of S$5,000, and monthly payments of about S$600 till death.
The amount is calculated based on the estimated valuation of their their-room flat – at S$236,000.
The payout varies depending on the valuation of the flat, done by independent assessors.
An estimated 25,000 households are eligible for the scheme, and concerns have been raised about some seniors’ reluctance to part with their properties.
But it is not an issue with Mr Koh.
He said: “I can’t take the flat with me if I die. It is better to sell it to the government and get money to meet my daily needs.”
Some seniors are also reluctant because of the Asian value of leaving property to their children. Commenting on the issue, National Development Minister Mah Bow Tan said: “I hope at the same time, their children will also look after them. But you and I know that this is not a given.”
Seniors will get to stay in their homes for 30 years after they sign up. And if they are still alive after the 30-year lease, alternative arrangements such as nursing home stays, will be made for them.
Mr Mah said: “The benefit of the scheme really is, you stay where you are and you get a rental income. My instruction to HDB is to make sure that as many eligible elderly households as possible are familiar with the scheme.”
So HDB will organise exhibitions at 11 towns with a high elderly population.
Officers will also go door-to-door to invite the elderly to the exhibitions.
To be eligible, home owners must be aged 62 and above, enjoyed only one housing subsidy, and almost paid off their home loan.
The scheme is not open to those living in four-room or larger flats. Mr Mah said this is because they have the option of downgrading to unlock the value of their homes, and get cash. But he said HDB may consider extending the scheme to them, if there is sufficient demand.
Source : Channel NewsAsia – 1 Mar 2009