Future blue chip BTO owners will face a minimum ten-year occupancy period, subsidy clawback rules
SINGAPORE: Buyers of future built-to-order (BTO) apartments in prime locations will face a longer minimum occupancy period (MOP) of 10 years, as part of a new model to keep homes in these locations accessible to Singaporeans, the Housing and Development Board (HDB) said on Wednesday, October 27.
This 10-year MOP – that is, the length of time owners must occupy their apartment before they are allowed to sell it on the open market – is double that of typical BTO projects.
Depending on the model, these apartments will also receive additional subsidies, but those who end up selling their units will have to reimburse HDB a percentage of the apartment’s resale price.
The measures come more than two years after it was first announced that thousands of homes would be built on the Greater Southern Waterfront, a prime location that required a new housing model.
Speaking at a press conference, National Development Minister Desmond Lee said that if left entirely to private market forces, these prime locations would become expensive and exclusive, with accommodations that only the rich can afford.
“We are seeing this happening in many cities around the world … But we are determined not to let this happen in Singapore,” Lee said.
The new Prime Location Public Housing (PLH) model, comprising a multitude of reinforced rules, follows 10 months of public commitment.
It will only apply to future projects – the first to be launched in Rochor during the next BTO sales exercise in November.
RECOVERY OF SUBSIDIES
As apartments located in these prime areas will “naturally hold higher market values”, units will be priced with additional subsidies, in addition to those currently provided for all BTO apartments.
âThis will keep the fixed prices affordable for a range of Singaporeans,â HDB said.
But those who sell their apartments later will have to pay a percentage of the unit’s resale price to HDB, allow the authorities to “fairly recover the amount of additional subsidies” initially granted.
Mr Lee said this would resolve concerns about additional subsidies leading to “excessive windfall gains” and whether it would be fair to BTO buyers in other parts of Singapore.
âThe subsidy clawback rate will reflect the extent of the additional subsidies given at launch and the same rate will apply regardless of when the apartment is resold in the future,â HDB said in response to questions from CNA .
More details will be announced during the BTO exercise in November, but Lee added that the percentage could be adjusted for other projects in the future, depending on market conditions and necessary grants.