More tapping HDB's Lease Buyback Scheme to boost retirement income

Owners in Singapore are tapping their homes and other schemes to add to their retirement kitties.

- Chor Khieng Yuit

There is a steady increase in the number of homeowners, for instance, who are selling part of the lease of their flats back to the Housing Board, with most of them getting between $100,000 and $300,000 in proceeds.

As at Dec 31, 2024, 13,734 households have taken up the Lease Buyback Scheme, an HDB spokesperson said in response to queries from The Straits Times.

This is up from 12,656 families as at June 30, 2024, a jump of 8.5 per cent in the space of six months.

Professor Sing Tien Foo, provost's chair professor of real estate at the NUS Business School, said interest will pick up further over time, as more will meet the scheme's age requirement of 65 and older by 2030.

The proportion of these citizens will grow to 24.1 per cent by then, up from 19.9 per cent in June 2024.

The Lease Buyback Scheme was introduced in 2009 and allows those aged 65 and above to sell part of the remaining lease on their flats to HDB. These seniors can continue to live in their flats.

The HDB spokesperson added that about 52 per cent — or 7,182 — of the households that took up the scheme live in three-room or smaller flats, about 34 per cent, or 4,623, live in four-room flats, and the remaining 14 per cent, or 1,929, live in five-room and bigger flats.

About nine in 10 households received between $100,000 and $300,000 in proceeds, the spokesperson said.

The money goes into their Retirement Account (RA) to increase their monthly payouts under the CPF Life annuity scheme, and any balance proceeds are returned to the homeowners in cash.

The flat owners qualify for a cash bonus as long as there is a top-up to their RA. Those who stay in three-room or smaller flats can get a maximum cash bonus of $30,000 if they make a top-up of $60,000 or more; if they top up less than $60,000, they will get a $1 bonus for every $2 they top up.