Finance Minister Heng Swee Keat Explains HDB 99-Year Lease Policy
For homeowners, the 99-year lease expiry issue of Housing and Development Board (HDB) flats has been a major concern especially for those with houses nearing the end of their leases.
Mr Heng was speaking at the yearly conference of real estate agency PropNex.
HDB flats still have value nearing end of lease
Mr Heng said that HDB flats will still have value even as the homeowner reaches their golden years.
Citing an example of a 25-year-old Singaporean who has just bought a new HDB flat on the standard 99-year lease, he raised a point that even as the person turns 85, there is still an excess of 30 years of lease left.
In his words,
Is there still value in the flat? Absolutely.
He was answering a question from PropNex chief executive officer Ismail Gafoor regarding lease decay of HDB flats in Singapore.
Seeking to reassure Singaporeans, Mr Heng reiterated that even at 85 years old, homeowners can still make decisions regarding their property, such as letting their children inherit it.
It is not going to go to zero when you are 85.
HDB owners are not merely renting flats
Mr Heng also refuted claims that HDB homeowners are merely tenants and not owners of their houses.
Under the 99-year lease, once 99 years have passed, the flats will be returned to state ownership.
In Aug 2018, International Property Advisor’s chief executive Ku Swee Yong had wrote a commentary in The Straits Times, saying that Singaporeans are “merely lessees who rent the HDB flat for their terms”.
In response to criticisms calling the 99-year lease a rental, Mr Heng claimed that those are untrue, asking those who hold that view to “get real”.
Rationale for 99-year lease
Back in the 2018 National Day Rally, Prime Minister Lee Hsien Loong explained the rationale behind the 99-year lease that comes with HDB flat purchases.
He rationalised that upon expiry of the 99-year-lease, the government will be able to take back the land for redevelopment, or construct new flats for future generations of Singaporeans.
Concerns remain for older flats
While the 99-year lease will no doubt remain a contentious issue for years to come, it is nonetheless a positive sign that ministers are stepping up to address residents’ concerns.
Do you agree with what Mr Heng said? Let us know in the comments down below.
Featured image from Dollars and Sense.