Under the Lease Buyback Scheme (LBS), the value of the flat’s lease is determined from the market value of the flat, based on industry-accepted standards and valuation practice, Minister for National Development Khaw Boon Wan said in Parliament on Monday (Sep 8).
Responding to a question from MP Foo Mee Har, who asked how HDB determines the value of the lease under the scheme, Mr Khaw said: “The Lease Buyback Scheme proceeds is the market value of the flat with its full remaining lease, less the value of the first 30 years of lease retained by the household and any outstanding housing loan.”
A professional valuer from the Housing and Development Board (HDB)’s Panel of Private Valuers first assesses the market value of the flat with its full remaining lease, after a physical inspection of the flat and reference to recent comparable market transactions, Mr Khaw said.
“Adjustments are made to reflect restrictions placed on the LBS flat – namely no subletting of whole flat and no resale. Because of these adjustments, the LBS proceeds are higher,” he said.
Workers’ Party MP Png Eng Huat also asked if HDB would consider relaxing restrictions on the subletting of flats under the scheme, as well as the minimum occupation period.
Flat owners who have spare bedrooms can choose to sublet them after taking up the LBS, Mr Khaw said. There are no plans to relax the minimum occupation period which is applied to the purchase of all HDB flats, he said.
Source : Channel NewsAsia – 8 Sep 2014