The Ministry of National Development (MND) has assured homeowners who outlive the lease for the Lease Buyback Scheme (LBS) will not be left without a roof over their heads.
“HDB will look into the circumstances of each case to work out an appropriate housing arrangement, taking into account the elderly’s health condition, financial status and the availability of family support,” Minister for National Development Khaw Boon Wan said in Parliament yesterday.
Under the current scheme, owners retain a 30-year lease. From April 2015, a 35-year lease option will be offered so homeowners who are concerned about outliving their lease can take up the longer lease option, and any unconsumed lease will be refunded to the estate.
Additionally, LBS owners whose flats are selected for the Selective En bloc Redevelopment Scheme (SERS) will be compensated based on the balance lease of their flat at the time of SERS announcement.
Clarifying on the basis HDB determines the value of the lease, he explained LBS proceeds is the market value of the flat with its full remaining lease, less the value of the first 30 years of lease retained by the household and any outstanding housing loan.
“A professional valuer from HDB’s Panel of Private Valuers first assesses the market value of the flat with its full remaining lease, after a physical inspection of the flat and reference to recent comparable market transactions.
“The value of the lease retained by the owners is determined from the market value of the flat based on industry-accepted standards and valuation practice. Adjustments are made to reflect restrictions placed on the LBS flat, namely no subletting of whole flat and no resale. Because of these adjustments, the LBS proceeds are higher,” Mr Khaw said.
Photo by Terence; Wikimedia Commons
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
