The Housing and Development Board, or HDB, is the Singapore land authority responsible for the affordable housing units around Singapore, with over 80% of HDB flats under the jurisdiction of the HDB. Majority of these units are leased to Singaporean residents, and are rent-controlled to ensure safe and affordable housing to the average Singaporean.
HDB flats are known for their 99-year lease, which help ensure security and stability in housing for their citizens, removing the threat of landlords and property owners illegally cancelling rental contracts without the notice of the homeowner.
But what happens to your HDB flat at the end of the 99-year lease? Does HDB just kick you out? Is there anything you will need to do to ensure you can continue living in your property, or will you have to resale flats in the resale market? Keep on reading to find out more!
The Singapore Housing and Development Board was established in 1960, following the efforts to urbanize the state in the late 1950’s for national development. The board was founded to take over the public housing sector from the responsibilities of the Singapore Improvement Trust (SIT), which is now responsible for urban planning and renewal.
Starting out with building emergency accommodations for the displaced Kampong residents, the HDB of Singapore then went on to develop public housing up for lease and sale by the late 1960’s. In the 1970’s, the board put its efforts into urbanizing rural areas, and providing residents with affordable but decent housing that can be upgraded as the years go by.
The HDB is known to utilize the 99-year lease scheme, which is a system that rents out a property to a homeowner for 99 years - just a year short of a century! The general idea is to rent out flats to Singapore residents with the assurance that they ‘own’ the property for a period of 99 years, which at the end will be given back to the land owner.
In this case, HDB takes back the ownership rights of a property once the 99-year lease is up. Within the 99 years, a homeowner can opt to stay in the unit, sell the unit, or keep it empty as they please, but these can cause complications nearing the end of the 99-year lease as the ownership draws closer and closer back to HDB.
So how do you find out if your unit is counted in the 99-year lease, and how many years you’ve got left before you lose ownership of your unit? For the remaining lease duration, you can log on to the Singapore Housing and Development Board official website and check under Resale HDB then check for the Resale Statistics.
There, you will be able to see information about your unit, with transaction prices dating all the way back two years prior to your search. You can find the remaining lease for your unit, as well as the year established, and other helpful information.
This information is also helpful when it comes to looking at resale flats in order to check on the status of the flat’s lease period. Flat owners can check their resale flat value, and find out how much they can sell their HDB flat as well.
So far, no HDB housing lease has expired, as older flats tend to be upgraded into modern units under the new lease buyback scheme, Selective En-Bloc Redevelopment Scheme (SERS), created to further national development. The HDB frequently makes plans to ensure that their developed properties continue to serve the residents of Singapore.
Launched almost three decades ago, the SERS project aims to modernize old and outdated housing developments, which should increase the lifespan of their buildings, and upgrade the housing units to fit the current era. However, the HDB is not clear on which buildings they plan to renovate under the SERS project.
Supposedly, the HDB would provide a sure, new flat, grant funds, and provide moving assistance to residents of the old building affected by the SERS project as they move into upgraded units. This may not provide a permanent solution to Singaporean homeowners who have purchased a resale flat with as little as 40 years left on the HDB lease.
Now, you may be thinking that 40 years is still a long time for you to find a new place to live, but keep in mind that you’ll need to sell your old unit before you do. HDB flats at the end of their lease cannot bring back a substantial amount of property appreciation, but can be sold at a modest price instead.
Worried about your lease expiring before you do? You can opt to sit and wait for your building to be chosen as part of the SERS project, but there is no guarantee that your unit will be part of the plans as there have been only 5% of HDB flats under the SERS project to date.
Your best bet is to sell your old unit and purchase a new one under a longer lease. You can find a newer HDB flat with a new 99-year lease, or opt for the more expensive 999-year lease or freehold lease. Either way, you will need to sell your old HDB flat at a cheaper price than one with a longer lease.
For private units nearing the end of their lease term, you may be eligible for a lease top up, which will increase your lease tenure back to the original 99-year lease. You will need to meet with your property manager and discuss terms, and fill out the forms to submit the necessary requirements to complete the lease top up.
However, you may not always be able to top up your lease, as private properties can opt to reject your lease top up for any reason. There are a number of considerations that they will factor in to determine your eligibility. In this case, you will need to scout for a new location to move into instead.