BUYING A PROPERTY WITH REMAINING LEASE OF LESS THAN 60 YEARS BUT AT LEAST 30 YEARS

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THIS INFORMATION IS NOT APPLICABLE TO THE HDB PROPERTIES TILL 1ST JULY 2013.
After 1st July 2013, this rule applies across all residential property types.

1) How much of my CPF savings can I withdraw to buy a property with remaining lease of less than 60 years but at least 30 years?

You can use your Ordinary Account savings, and the future monthly CPF contributions in this account to buy the property and/ or to pay the monthly installments of the housing loan up to the applicable Withdrawal Limit (WL).

The applicable WL is set at a level that covers the estimated depreciated value of the property when the member reaches the CPF withdrawal age of 55 years. It is calculated based on the ratio of the remaining lease when the member is 55 years old, to the lease at the point of purchase.

Example:

A 35 year old member buys a private property with 50 years of lease remaining. When the member turns 55 years old, the property will have 30 years of lease remaining.Hence, the applicable WL = 30/50 x 100% = 60% of *Valuation Limit

Valuation Limit is the lower of the purchase price or the value of the property at the time of purchase.

For details of applicable WL, please refer to the above table.

2) I am 30 years old and I wish to buy a private property which has a remaining lease of 59 years and 11 months.Would I be eligible to withdraw my CPF savings up to 100% of valuation limit?

No. As the property has a remaining lease of less than 60 years, a lower withdrawal limit will be applicable for your case. Based on the property remaining lease of 59 years and your age of 30 years, you may withdraw up to 58% of the valuation limit for the property. Once this limit is reached, you cannot withdraw more CPF savings for the property.

3) I am now 40 years old. Can I buy a property with a remaining lease of 30 years?

No. You cannot use your CPF to buy this property as the remaining lease of 30 years will not last you till 80 years old.

Unauthorised Renovations

Over at the Pre-War section of the Tiong Bahru Estate, it is quite common to see unauthorised renovations amongst the residents there.

Before purchasing a Pre-War Tiong Bahru flat, it would be prudent to ask the owner or the seller's agent if there are any unauthorised renovations within the flat.

Some obvious ones that are easily spotted would be the location of the MAIN DOORS for ground floor units. The original Pre-War flats does not have any main door facing the corridor walkways except for a few rare units who has such privileges.

Most main door should be located within the stairways in the buildings. If it is located along the corridor walkway, the owner would be required to shift the door back to its original position before the transaction could be completed. Many a times, this has caused a lot of unnecessary argument over who should pay for the relocation of door and whether or not the owner has to reinstate back the door after the inspection is done.

The other obvious NON APPROVED renovations would be the hacking down of walls in the AIR WELL area. This is especially common amongst the ground floor owners. When these owner sells, they are also required to put back the wall and remove whatever shelters they might have put up to prevent rain from coming in.

Illegal gates are also another thing to look out for. Most gates should be right in front of the main door. But the building design here at Tiong Bahru basically allows owners to cordon off certain segment of the stairs and use it as a personal space. These owners could get away with no complaints because such units are located on the top most floor. No one uses the stairways except the owners themselves. Anyway, most new owners will promptly reinstall these illegal gates. People are basically territorial creatures.

I can only speculate on why there are so many unauthorised renovations around here. It could be because these flats are really old. The enforcement was probably very lax in the past. Monkey see monkey do. If everyone else is doing it, it is probably right. So the owners just keep trying to test the limits. Some unfortunately owners were not even aware that the flat they purchased many years ago contained unauthorised renovations and gets a rude shock only when they try to sell the property.

There was also a period in time where these flats were actually slated for demolition. It may be also be part of the reason why some officials closed one eye when inspecting the place. They never expect the demolition plan to change but it did and the place actually got gazetted as a conservation area in 2003!

Now URA and HDB are managing this area and there are some grey area where both of them cannot decide on who should be responsible. You will definitely have a lot of fun interacting with them when you are renovating your abode.

Types of HDB floorplan layout (88 sqm)

The floor plan above is a typical one for a CORNER 3 room unit. The main difference are the windows found on the side of the units. These windows allow more light and air to come into the flat. Also, if you need more rooms, it is also possible to configure a 3 bedroom layout as opposed to the INTERMEDIATE units.

So the obvious units to go for are the CORNER units. But then again, you must have the patience, determination and a bit of luck to get to buy one of these CORNER units.

The reality is that it is already hard enough to wait for someone here to sell, let alone a CORNER unit. So most of time, buyers eventually compromise.

Where to buy the floor plans?

You can purchase the floor plans with HDB. It will cost you $5 per floor plan.

You can also go to Toa Payoh HDB Hub Level 3 to buy if you need it urgently.

Alternatively, you can go online and purchase it at http://www.hdb.gov.sg/

Transacted Prices are NOT TRANSPARENT

There is no official website for you to find out the recent transacted prices for the PRE-WAR section of Tiong Bahru.

This has create much confusion, chaos and stress when buying and selling a property here.

This lack of information, while it punished the ignorant, has rewarded many hardworking and diligent investors.

I wonder when the authorities will make these information public.

For HDB's transacted prices, you can go to http://www.hdb.gov.sg/ to find out last 3 months transacted prices.

Checking the Unit's Built in Area

To check the size of the flat you intend to buy, you can call the HDB branch office hotline at 1800-2255432 during office hours to find out.

BUT PLEASE TAKE NOTE THAT THE SIZE QUOTED MIGHT DEFER FROM YOUR BANK VALUATION REPORT.

Who is right and who is wrong? I wonder too.

'50s flats in Tiong Bahru a big draw

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