National Development Minister Lawrence Wong has cautioned home buyers not to assume that all old Housing Board flats will be automatically eligible for the Selective En bloc Redevelopment Scheme (Sers).
He confirmed in a blog post on March 24 2017 that the Government will continue to maintain the strict selection criteria for blocks eligible for Sers, noting that only 4 per cent of HDB flats have been identified for Sers since it was launched in 1995.
Which means to say that for most of the HDB flats, their leases will eventually run out & the flats will be returned to HDB, which in turns surrenders the land the flats are on to the State. It is therefore important for HDB flats buyers to do due diligence and be more realistic when buying HDB flats with short remaining leases.
One thing to note with regards to the leases of HDB flats, is that if you are using CPF to finance the purchase, the CPF Withdrawal Limit (WL) and Valuation Limit (VL) will apply as well.
Make use of the CPF Housing Withdrawal Limits Calculator to estimate when the limits will be reached.
Due to these various implications, please be prudent when planning for such purchase & also consider very carefully whether it is worth rushing to pay off your HDB flat.
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Jason Ow S. H.
Senior Financial Consultant