Future owners of prime area BTOs to face 10-year minimum occupation period, subsidy recovery rules

SINGAPORE: Buyers of future Build-to-Order (BTO) flats in prime areas will face an extended minimum occupation interval (MOP) of 10 years, as half of a brand new mannequin meant to hold housing in these areas accessible for Singaporeans, stated the Housing & Development Board (HDB) on Wednesday (Oct 27).

This 10-year MOP – which is how lengthy owners should occupy their flats earlier than being allowed to promote it on the open market – is double that of typical BTO tasks.

Under the mannequin, these flats may also include additional subsidies, however those that ultimately promote their models can have to pay again HDB a proportion of the flat’s resale worth.

The measures come greater than two years after it was first introduced that 1000's of properties can be constructed on the Greater Southern Waterfront, a prime location that known as for a brand new housing mannequin. 

Speaking at a media briefing, National Development Minister Desmond Lee stated that if left solely to non-public market forces, these prime areas would turn into costly and unique, with housing that solely the well-to-do can afford.

“We see this happening in many cities around the world ... But we are determined not to let this happen in Singapore,” stated Mr Lee.

The new Prime Location Public Housing (PLH) mannequin, comprising a slew of tightened rules, follows 10 months of public engagement.

It will solely apply to future tasks – with the primary to be launched at Rochor within the upcoming November BTO gross sales train.

SUBSIDY CLAWBACKS

As flats in these prime areas will “naturally command higher market values”, the models shall be priced with further subsidies, on high of these presently supplied for all BTO flats.

“This will keep flat prices affordable for a range of Singaporeans,” stated HDB.

But those that promote their flats in a while can have to pay a proportion of the unit’s resale worth to HDB, to enable authorities to “fairly recover the extent of the additional subsidies” initially given.

Mr Lee stated it will handle considerations over additional subsidies main to “excessive windfall gains” and whether or not it will be honest to BTO consumers in different components of Singapore.

“The subsidy recovery rate will reflect the extent of additional subsidies provided at launch and the same rate will apply regardless of when the flat is resold in the future”, stated HDB in response to CNA’s queries.

More particulars shall be introduced within the November BTO train, however Mr Lee added that the proportion could also be adjusted for different tasks in future, relying on market circumstances and the subsidies wanted.