1. Social compact on housing

Since June 2022, we have been engaging Singaporeans during Our Housing Conversations on their aspirations and views about public housing. Majority of Singaporeans consistently shared that our public housing system should reflect the following key values and priorities: Home ownership, inclusivity, fairness and sustainability.

2. Housing landscape of the future

Our housing landscape is changing. In the past, we had large tracts of undeveloped land to build new towns and estates. These tend to be further away from central areas, e.g., Jurong East, Choa Chu Kang, Yishun, Sembawang, Seng Kang and Punggol, and we call them Non-Mature Estates.

There are now fewer pieces of undeveloped land left to build new Non-Mature Estates. Increasingly, we will have to build new HDB flats within existing estates. These are usually in more central locations with more attractive attributes.

The new BTO classification thus aims to address this changing landscape and the evolving aspirations of Singaporeans by:

• Reflecting differences in locational attributes
• Ensuring public housing remains affordable and accessible
• Keeping public housing system fair and inclusive

1. More BTO flats in choicer locations to support aspirations of young homebuyers
   • Near transport nodes for greater connectivity
   • Near town centres or amenities for greater convenience
   • Near parents or family members for mutual care and support
2. More subsidies, greater affordability

   With more attractive locational attributes, Plus flats may command higher prices. To keep them affordable for Singaporeans, the Government will provide more subsidies, on top of the standard subsidies already provided for BTO flats today.

3. Tighter restrictions to encourage home ownership

• Income ceiling of $14K for families and singles resale buyers to keep these flats affordable for subsequent buyers and maintain a good social mix in the long-term.
  • This will cover 8 in 10 Singaporean households. 
  • Remaining households can continue to access the existing stock of 1.1million resale flats.
• Subsidy recovery to mitigate windfall gains
  Like Prime flat owners, Plus flat owners will have to return to HDB a proportion of the resale price upon the sale of their flat. This is to ensure fairness for other flat owners who did not receive these additional subsidies.
• Longer Minimum Occupation Period (MOP) of 10 years to strengthen owner-occupation intent
  Plus flat owners will need to occupy their flats for at least 10 years before they can sell their flats in the open market or invest in a private residential property.
• Rental restrictions
  Owners can rent out spare bedrooms, but they cannot rent out the whole flat even after MOP 

The new classification and Plus model will apply for future BTO projects. No changes will be applied for current for existing HDB flats or booked flats.

With a Minimum Occupation Period (MOP) of 10 years, it will be more than 10 years before any Plus flats are sold in the resale market. We will monitor the impact of these new measures on the broader resale market and review them if necessary.

With the changes, single homebuyers can apply for 2-room Flexi flats in all locations – across Standard, Plus and Prime projects. They can also buy a Standard resale flat and a Plus resale flat (subject to an income ceiling of $14k).

We also enhanced our CPF Housing Grant for singles earlier this year to help our singles looking to purchase a resale flat too.

We have introduced this new classification framework to prevent, and not reinforce, such social divides. The new framework ensures we meet the three key objectives of our public housing system – keep home ownership affordable, maintain a good social mix in every town and region, and keep the system fair.

Prime and Plus flats will be priced with additional subsidies, on top of the substantial market discounts available for Standard flats, so that they remain affordable to a wide range of Singaporeans. Without these additional subsidies, only the higher income households will be able to afford the flats in these choicer locations. 

At the same time, we want to prevent windfall gains and be fair to other buyers who did not enjoy the additional subsidies. So a subsidy recovery is imposed upon sale of Prime and Plus flats to keep the system fair. These additional subsidies, along with the more stringent ownership conditions, will help to keep HDB flats affordable, both at its initial sale and subsequent resale, and ensure that all our HDB estates have a good social mix – for current and future generations of Singaporeans.

Through our engagements with Singaporeans, such as during the Forward Singapore exercise, many have shared that they believe public housing should primarily be for families with genuine housing needs, and that more should be done to deter people from quick flipping of HDB flats for profit. Hence, we have imposed a longer Minimum Occupation Period (MOP) of ten years for Prime and Plus flat owners, before they may sell their flats on the open market or invest in a private residential property.

Majority of Singaporean households live in their flat for 10 years or more before it is sold. An MOP of 10 years thus strikes a good balance between strengthening the owner-occupation intent and allowing flat owners the flexibility to move, for example, to a larger apartment when couples have more children, or to be close to ageing parents.

For those in genuine need to move before the end of the MOP, MND/HDB will assess appeals on a case-by-case basis, based on the specific circumstances of each case. Most Singaporeans we consulted were supportive of such an approach.

The revised BTO classification does not change HDB’s pricing approach for new flats. In pricing new flats, HDB first establishes the market value of the flat by considering factors such as the prices of comparable resale flats nearby, the individual attributes of the flat, and the prevailing market conditions. A generous market discount is then applied, so that new flats are priced at a significant discount to the market value.

We will price Plus flats with additional subsidies, on top of the substantial market discounts already provided for all Standard flats today, to further moderate prices and enable a wider range of Singaporeans to purchase them.

We will also recover a certain percentage of the resale price when the flat is sold to mitigate windfall gains, and to be fair to other Standard flat buyers who do not enjoy the additional subsidies.

In addition, we will gradually provide more housing grants, especially grants that are means-tested, like the Enhanced CPF Housing Grant (EHG), so that lower-income households get the most support to buy their homes. More details will be shared when ready. 

The subsidy recovery rate will be broadly commensurate with the extent of additional subsidies provided for the flats. It will vary from project to project, depending on the valuation of the project.

HDB will share details on the subsidy recovery rate for each project when it is launched, as per our current practice for Prime projects. Prime flats, which receive even more subsidies than Plus flats, will come with a higher subsidy recovery.