How does the EHG benefit the first timer in buying HDB flat ?
In order to assist Singaporean to have to own a property, the Singapore government have introduced the HDB housing grant to assist Singaporean to own HDB flat more affordable.
What is the HDB Housing Grant?
HDB housing grants are technically CPF housing grants.
This grant will be used to top up the fund in your CPF account for the purchase of the property.
When you sell your flat, you need to return the principal to CPF with interest.
CPF housing grant is a program by the Singapore government, its meant to help the low to mid-income, a first-time buyer, to afford a HDB flat.
The program has been revised accordingly to the needs and more grants are introduced over the years.
In this program, there is various type of housing grants provided to eligible Singaporean flat buyers
Previously, eligible first-timer families who buy a subsidised flat from HDB can only enjoy the Additional CPF Housing Grant (AHG) and the Special CPF Housing Grant (SHG).
The CPF housing grants and the AHG will be available to those buying a resale flat.
Effective from 11 September 2019, HDB has updated the housing grants recently.
The Enhanced CPF Housing Grant (EHG), is to replace the existing AHG and SHG.
To benefit more first-time home seekers, the EHG will be made more available to eligible buyers, regardless of whether they purchase a new or resale flat.
The flat buyers are allowed to choose any choice of flat type and their prefer location.
An EHG of the amount up to S$80,000 can be granted to eligible first-timer families.
The purchase flat has to cover them and their spouses to the ages of 95.
This change ensures that all Singaporeans will be able to live comfortably in a home that can last them for life.
For all these housing grants, the flat that you are planning to buy must have sufficient remaining lease of 20 years or more.
Increase of Income Ceiling
To provide more citizen households with access to affordable housing options, the monthly household income ceiling has increased
- The monthly household income ceiling for eligible first-time families has increased from S$12,000 to S$14,000.
- For a single eligible first-time buyer, the income ceiling increase from S$6,000 to S$7,000.
The above changes allow you with access to affordable housing options to:
a) Buy a flat from HDB;
b) Using the Housing grant to buy a resale flat
c) HDB housing loan is available for the purchase of the HDB flat, new or resale.
To enjoy the EHG, the following conditions have to be fulfilled.
Eligible first-timer families buyer
- Before the application of your flat, the 12 months average household gross income must not exceed S$9,000 monthly
- All applicants must be first-timers
- minimum worked for 12 months continuously
- At the time you submitted the flat application, you are still working
- The flat must have enough lease to cover the youngest applicants to the age of 95 to enjoy the full EHG. Otherwise, pro-rated EHG will be granted accordingly the remaining lease.
- All flats applicants cannot own private residential property, house, building or land locally or overseas.
- They can only submit the application after 30 months of the disposal of their private residential property, house, building.
From the below charts, you will be able to calculate how much EHG will you be granted.
Up to a maximum grant of $80,000 depending on your income.
This grant is on top of the previous HDB housing grant.
The maximum grant to a family can obtain:
For families: $50,000 (Family Grant) + $30,000 (PHG)+ $80,000 (EHG for Families) = $160,000
Eligible Single First-time buyer
- Before the application of your flat, the 12 months average household gross income must not exceed S$4,500 monthly.
- Minimum work for 12 months continuously
- At the time you submitted the flat application, you are still working
- The flat must have enough lease to cover you to the age of 95 to enjoy the full EHG. Otherwise, pro-rated EHG will be granted accordingly the remaining lease.
- You cannot own private residential property, house, building or land locally or overseas.
- You can only submit the application after 30 months of the disposal of their private residential property, house, building.
The below chart determine the calculation for how much EHG you will be granted.
Up to a maximum grant of $40,000 depending on your income.
The EHG is on top of the previous grant the maximum a single can obtain:
For singles: $25,000 (Singles Grant) + $15,000 (PHG) + $40,000 (EHG for Singles) = $80,000
So, how does this new CPF EHG benefit you in your first HDB flat?
The maximum grant amount you can get is:
For families: $30,000 (PHG) + $50,000 (Family Grant) + $80,000 (EHG for Families) = $160,000
For singles: $15,000 (PHG) + $25,000 (Singles Grant) + $40,000 (EHG for Singles) = $80,000
Before the introducing of the EHG, the first-time buyer might need to take more time to save up before they can afford to buy a HDB flat.
A professional real estate consultant, a property wealth planner, he will be able to give you a details plan, strategically assist you to build your wealth in property starting with the first HDB flat.
Mr and Mrs Lim are looking ready to buy their first home.
Both are working and have a salary of S$2,500 monthly.
They have a choice of whether to go for a New BTO flat or Resale HDB flat.
New HDB BTO Flat.
The grant they can obtain is the EHG of S$45,000 base on their household income.
1. Brand new first-hand flats from HDB.
2. Can dress up the flat to their liking.
3. Lowest ever prices land subsidised by the government4. High appreciation potential to re-sell
1. Need to wait for 3 to 4 years before moving in
2. Many restrictions on who you can sell and rent to
3. Cannot choose your preferred location
4. Limited grant, only EHG available
HDB Resale flat:
The grant base on their household income as follows:
1. Enhance CPF Housing Grant at household income of S$5,000 will be S$45,000
2. Family Grant is $50,000
3. Proximity Housing Grant (PHG) — for HDB resale flats S$30,000, for applicants buying a resale flat within 4km of their parents (including nearby towns)
1. Can come with some existing furnishing, can save cost on the renovation.
2. Able to choose your location, especially for those wanted to stay near parents.
3. Can move in immediately after purchase
4. Amenities are more developed.
5. More grants available, the Family grant, the EHG, and The PHG.
1. Limited appreciation potential, the remaining tenure of the flats will restrict the appreciation of the flat.
2. Potential re-design needed (e.g hacking, ID)
In total, they will have an HDB housing grant of S$125,000. Comprising the Enhanced CPF Housing Grant, Family Grant, and Proximity Housing Grant.
Compare to previous Housing grant, they are able to achieve more housing grant and allow them to buy a Resale Flat in a much earlier time, and also able to choose the HDB room type of their preference and also the location.
They decided to buy a 4-room resale flat in Tampines which is about S$430,000, close to their parent’s house.
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