In 2019, 75% of first-time HDB buyers purchased a Build-To-Order (BTO) flat instead of a resale flat. 10 years ago, this number was only at 55%. Due to the unaffordability of resale flats, more people, especially young couples just entering the workforce, choose to buy BTOs instead. However, choosing a BTO means they have to compromise on their desired location and size due to the limited options.

The government recognised that they needed to make resale flats more affordable for first-timers and balance the supply of new flats with the demand. For this reason, the Singapore Government recently introduced the new Enhanced CPF Housing Grant and implemented higher income ceilings for first-time applicants’ grants – the impact of which will be explained for you in-depth in the article below.

  1. New Enhanced CPF Housing Grant & Higher Income Ceilings for First-Timers
  2. Leasehold of Flat Purchased
  3. Am I Eligible to Receive it?
  4. When is it Effective From?
  5. Disbursement – Do I Get it as Cash?
  6. Usage – Can I Use it for Downpayment?
  7. How Does it Help Me?

 

1. New Enhanced CPF Housing Grant & Higher Income Ceilings for First-Timers

In the past, buyers could apply for the Additional CPF Housing Grant (AHG) and the Special CPF Housing Grant (SHG) when buying a new flat or the Family Grant, the AHG and the Proximity Housing Grant (PHG) when buying a resale flat. The AHG had a relatively low income ceiling (any household that had a combined income of over $5,000 per month could not enjoy this grant) and the SHG was limited to those buying 4-room or smaller BTO flats in non-mature estates. 

AHG and SHG have now been combined into the Enhanced CPF Housing Grant (EHG), which has the following features:

  • Grant of up to $80,000
  • Higher income ceiling of up to $9,000
  • No restriction on location/estate of the flat being purchased
  • No restriction based on new (BTO/EC/DBSS) or resale flat 

With the new Enhanced CPF Housing Grant (EHG), buyers will be eligible for almost $40,000 more in grants for resale flat purchases. Additionally, the income ceilings for all grants have been increased for the first time since 2015. You can see the difference between the previous grants and their income ceilings vs the new ones in the table below.

New Enhanced CPF Housing Grant and Other Grants with Higher Income Ceilings
Image 1: CPH Housing Grants and their income ceilings before vs after implementing the new Enhanced CPF Housing Grant (EHG).

 

Enhanced CPF Housing Grant – How Much Can I Get?

How much of the grant amount you can enjoy depends on your average monthly household income (including all applicants and occupiers of the flat) over the 12 months prior to your flat application. The lower your household income, the higher your grant amount. 

Avg. Monthly Household IncomeEHG Amount
≤ $1,500$80,000
$1,501 – $2,000$75,000
$2,001 – $2,500$70,000
$2,501 – $3,000$65,000
$3,001 – $3,500$60,000
$3,501 – $4,000$55,000
$4,001 – $4,500$50,000
$4,501 – $5,000$45,000
$5,001 – $5,500$40,000
$5,501 – $6,000$35,000
$6,001 – $6,500$30,000
$6,501 – $7,000$25,000
$7,001 – $7,500$20,000
$7,501 – $8,000$15,000
$8,001 – $8,500$10,000
$8,501 – $9,000$5,000

 

Other CPF Grants

If you’re buying a resale HDB, other CPF grants such as the Family Grant and the Proximity Housing Grant (PHG) will continue to be available to you along with the new Enhanced CPF Housing Grant (EHG). They will in fact have higher income ceilings as shown in the table earlier, allowing more households to enjoy their benefits.

 

2. Leasehold of Flat Purchased

An additional requirement for receiving the EHG is to ensure that the flat purchased has sufficient remaining lease such that the youngest applicant can live up to the age of 95 in that flat. If that is not the case, the EHG will be prorated. The flat being purchased must also have a minimum lease of 20 years

Example:
Mark and Vivian are of age 30 and 25 respectively. They fulfil all the eligibility criteria to receive the EHG.

New Enhanced CPF Grant Amount Pro Rated Sample Calculations
Image 2: Mark and Vivian will receive a prorated amount of the new Enhanced CPF Grant based on the youngest applicant’s (i.e. Vivian’s) age and the remaining lease of the flat they intend to buy.

If Mark and Vivian would like to receive the full grant amount of $50,000, they have to buy a flat with at least 70 years remaining lease so that Vivian is covered until the age of 95.

 

3. Am I Eligible to Receive it?

Your eligibility to get the Enhanced CPF Housing Grant will be based on the conditions stated below:

Eligibility CriteriaDescription
CitizenshipGrant applicants must be Singapore Citizens. If you are an SC-SPR couple, you can still apply.
Income CeilingAvg monthly household income over the last 12 months must be ≤ $9,000.
First-Timer StatusYou, all your co-applicants and essential occupiers must all be first-timers.
Employment StatusYou or your spouse must be employed at the time of submission of the flat application as well as for a continuous period of 12 months prior to that.
Remaining Lease of FlatFlat must have at least 20 years remaining lease and must cover the youngest applicant up to age 95 (if not, the grant amount will be prorated).
Ownership of Other PropertyMust not have owned, and if owned, sold at least 30 months ago, any of the below properties:

  • Private residential property 
  • HDB/DBSS/EC
  • Land/Landed property
  • Building
  • Overseas property
Applicant Relationship StatusMust apply as a single or with your spouse.

 

4. When is it Effective From?

The grant is effective for all flat applications submitted on or after the 11th of September, 2019. This means, even if you have issued or exercised an Option to Purchase (OTP) prior to that, as long as your resale application itself is made on or after the 11th of September, 2019, you are still eligible.

 

5. Disbursement – Do I Get it as Cash?

There will not be any cash disbursement. The grant will be disbursed directly into your CPF Ordinary Account if you are eligible.

Type of Applicant(s)Distribution of Grant
Single SC applicantFull grant amount in your account
Joint SC applicants (husband and wife)Half the grant amount in each person’s account
Multi-nuclei SC applicants, e.g.:

  • Married couple and their parents
  • Two siblings and their respective spouses
Grant given to a maximum of 2 applicants who are husband and wife

 

6. Usage – Can I Use it for Downpayment?

Yes and no. 

What you can use it for:

  • You can use it for the CPF part of your downpayment (i.e. 20% for bank loan and 10% for HDB loan).
  • You can use it to decrease the overall cost of the flat and hence lower your required principal loan amount.

What you cannot use it for:

  • If you get a bank loan, it cannot be used towards your minimum cash downpayment of 5%.
  • It cannot be used for your monthly mortgage instalment payments.

 

7. How Does it Help Me? 

The EHG helps subsidise the purchase price of your property and consequently, your monthly mortgage. This opens up a lot more resale flat options to you which may have previously been considered too expensive.

Example:
Mark and Vivian are a married couple where both are Singapore Citizens of age 30 and 25 respectively and have both been employed for a consecutive period of 12 months. 

They have decided to buy a resale HDB flat with 70 years remaining lease and to take the HDB loan which requires a 10% downpayment.

Loan and Monthly Instalment Payments with Additional CPF Housing Grant vs Enhanced CPF Housing Grant
Image 3: An illustration that shows the impact of the new Enhanced CPF Housing Grant.

 

Conclusion

The Enhanced CPF Housing Grant and the increased income ceilings increases the affordability of resale flats for a lot of households, especially ones with young couples looking to make their first property purchase. It could subsidise your downpayment as well as your monthly mortgage by a considerable amount depending on your income level. 

Have any questions about Enhanced CPF Housing Grant or process to buy HDB for first-timers? Ask us in the comments or on the chat icon on the bottom right of your screen!

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