Lease Buyback Scheme to be enhanced starting April 1

The Lease Buyback Scheme will be enhanced starting April 1 to include elderly households who previously owned four-room or bigger flats.

It was launched a year ago to help elderly household owners currently living in three-room and smaller flats unlock the value of their homes.

Under the scheme, the elderly will continue to live in their homes, but sell the tail-end of their lease back to the government in exchange for a lifelong income stream.

Before the change, those who once owned a four-room or bigger units before downsizing were not eligible for the scheme.

HDB said the rationale for this restriction was because the flat owner would have received substantial proceeds from the sale of their earlier flat before moving to a smaller flat.

National Development Minister Mah Bow Tan said that despite having received substantial sale proceeds from the first flat, some elderly households may still be in need of financial help.

The restriction on outstanding loans has also been lifted.

Currently, elderly households living in three-room or smaller flats and who have an outstanding loan exceeding S$5,000 are not eligible for LBS.

With the change, such households can apply for the scheme, but must have minimum proceeds of S$60,000 for the purchase of an immediate annuity under CPF LIFE.

Source : Channel NewsAsia – 5 Mar 2010

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