The Lease Buyback Scheme (LBS) is not likely to cover five-room flats in the near future.
Implemented in 2009, the LBS helps elderly home owners earn more retirement income by selling part of their lease back to the Housing Board. The scheme was expanded to include four-room flats in April, in addition to flats that are three-room and smaller.
While the scheme is unlikely to expand further to cover five-room units, the Minister for National Development Lawrence Wong said that there will be efforts to help elderly home owners downsize their flats soon, The Straits Times reported.
Regarding the reluctance to cover five-room flats, Mr Wong cited a lack of urgency and a need to “study other options for right-sizing first”. According to R’ST Research director Ong Kah Seng, not expanding the LBS makes sense as many seniors are conservative, preferring to keep their flat for the next generation rather than to sell it.
“Many prefer to bequeath their flat to the next generation instead,” he said. In addition to the LBS, the Silver Housing Bonus also helps seniors to monetise their flats. After downsizing their flat, the scheme gives elderly home owners a cash grant and transfers the sale proceeds into their Central Provident Fund (CPF) account.
Mr Wong noted that further work will be done to smoothen such transitions within his term. “It sounds straightforward to do but there are a lot of transactions that you have to go through,” he noted, adding that some people may have problems with financing and timing their moves.
“You have to make sure that the timing works well, (that) everything is back to back, otherwise, you would end up caught in between,” he said. To help seniors get value out of their flats, Mr Ong also suggested improvements such as having the Government provide comprehensive counselling to educate elderly home owners on their monetisation options.
As of May, more than 1,500 households have taken up the scheme, with 541 doing so between April last year and March this year.
Read more at The Straits Times.
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