If you’re buying an HDB flat in Singapore for the first time, you’re just beginning to realise how much it costs to live in what is essentially a tiny space in the sky. Fortunately there are CPF housing grants to help those of us with lower incomes, as well as incentivise us towards certain decisions.
These grants come with different conditions to fulfil before you can qualify for a CPF Housing Grant or a combination of grants. This article breaks down the requirements and how you can get as much as you can qualify for.
With decently-sized homes costing at least half a million dollars (of course, it’s cheaper if you’re willing to live in the middle of nowhere), it’s no wonder that Singaporeans are relying on multiple CPF housing grants to further subsidise the cost of public housing.
- What is the CPF Housing Grant?
- Additional CPF Housing Grant (SHG)
- Special CPF Housing Grant (AHG)
- Enhanced CPF Housing Grant (aka Family Grant)
- Proximity Housing Grant (PHG)
- Other things to note
What is the CPF Housing Grant?
CPF (or HDB) Housing Grants are given to lower- and middle-income families to help make their home purchases more affordable. The grants will be fully credited into an applicant’s CPF Ordinary account (no, you don’t get to see it in cash) after flat booking and be used to offset the purchase price of the flat, hence lowering the mortgage amount required.
Grants are usually inversely related to your income and mortgage loan amount. A lower income qualifies you for a higher grant amount (e.g. you get more from the AHG and SHG if your combined household income is $5,000 or less). Unfortunately, a lower income also means a smaller loan amount from the bank. The good news is, grants are credited early in the booking process when you’re buying a building that’s still under development, and you only start paying your bank loans when the project nears its completion. So you’ll have a few years to jack up your salary.
1. Additional CPF Housing Grant (AHG)
Who is it for: Lower-income families earning $5,000 or less per month.
HDB flat eligibility: Both new BTO and resale HDB flats are eligible for the AHG.
Amount: Between $5,000 and $40,000, depending on your income.
The Additional CPF Housing Grant is meant for families where at least one family member is employed and has been employed for at least 12 months before applying.
The amount you are eligible for is determined by your average income across the past 12 months before your application. So if you’re expecting a raise, you might want to apply for an HDB flat first in case you’re entitled to a higher AHG amount.
Unlike the other grants on this list, the Additional CPF Housing Grant is solely determined by income. There are no other eligibility factors to consider.
Note for Singles: Singles applying for an HDB flat are also eligible for the Additional CPF Housing Grant. Naturally, the income requirement is halved, and the amount you get is also halved.
2. Special CPF Housing Grant (SHG)
Who is it for: Lower- to middle-income families earning $8,500 or less per month.
HDB flat eligibility: Only new BTO 2-room, 3-room and 4-room HDB flats in non-mature estates are eligible for the SHG.
Amount: Between $5,000 and $40,000, depending on your income.
The Special CPF Housing Grant is meant to encourage families to buy smaller HDB flats in non-mature estates. The good news is, those new flats are already significantly subsidised, so getting a further discount off the price will definitely make your life easier.
As with the AHG, the SHG amount you are eligible for is determined by your average income across the past 12 months before your application. So if you’re expecting a raise, you might want to apply for a new HDB flat first.
Note that the SHG is only for buying new BTO flats in non-mature estates. A non-mature estate is defined as being less than 20 years old. This includes far-flung places like Punggol, Bukit Batok, Hougang and yes, even… Yishun.
Note for Singles: Singles applying for a new 2-room HDB flat in non-mature estates are also eligible for the Special CPF Housing Grant. Naturally, the income requirement is halved, and the amount you get is also halved.
3. Enhanced CPF Housing Grant (aka Family Grant)
Who is it for: First-timer families buying a resale flat.
HDB flat eligibility: Any resale flat, 2-room and larger.
Amount: Between $30,000 and $50,000, depending on your citizenship status and the size of the HDB flat.
Unlike new HDB BTO flats, which can take up to 4 years to be built, families in Singapore buying a flat for the first time can choose to buy it from the resale market and move in immediately. However, as resale flat prices are often unsubsidised, families are entitled to a significant one-off Enhanced CPF Housing Grant (also known as Family Grant).
The grant amount is based on your citizenship status, as well as the size of the HDB flat. Families with at least two Singapore Citizens are entitled to more, and families buying smaller HDB flats will enjoy a larger grant.
|Household||Buying 2- to 4-room Resale Flat||Buying 5-room or Bigger Resale Flat|
|Two or more Singapore Citizens||$50,000||$40,000|
|Only one Singapore Citizen and at least one Permanent Resident||$40,000||$30,000|
Permanent Residents who become Singapore citizens later on may be eligible for a $10,000 Citizen Top-Up. A couple consisting of one Citizen and one Permanent Resident, who later have a child who is a Singapore Citizen will also be eligible for the $10,000 Citizen Top-Up.
It therefore makes sense for such families to buy a smaller flat at first to enjoy the maximum Family Grant.
Note for Singles: The Enhanced CPF Housing Grant is also known as a Singles Grant. It is $20,000 if you buy a 5-room resale flat, and $25,000 if you buy a 2- to 4-room resale flat. As with the Family Grant, it makes sense for first-timer singles to buy a smaller flat at first to get the higher grant amount.
4. Proximity Housing Grant (PHG)
Who is it for: Homebuyers who want to live with, or within 4 km of, their parents.
HDB flat eligibility: Any resale flat, 2-room or bigger.
There are lots of advantages to living with or near your parents, especially if they’re retired. They can look after your young children. They can look out for your domestic helper. They can be present to sign for deliveries that come during the day while you’re out at work. They can tell your spouse how to be a better child-in-law.
Okay, that last one might not be an advantage.
So if you think having easy access to your parents (and vice versa!) is a good thing, then good for you! You are entitled up to a one-off $30,000 in Proximity Housing Grant. As of 2018, the Government has increased the grants available.
For singles, don’t worry, this applies to you too! As with all the other grants, you get half or $10,000 instead. Not a bad reward for ensuring you can always go visit your parents for dinner whenever you feel like it.
Here’s a summary of how much of the PHG you can get now:
|Couples / families||Live WITH parents||$30,000 (increased from $20,000)|
|Live NEAR parents – within 4km (increased from 2km)||$20,000 (no change)|
|Singles aged 35 and up||Live WITH parents||$15,000 (increased from $10,000)|
|Live NEAR parents – within 4km (increased from 2km)||$10,000 (new!)|
Don’t spend that money just yet though – you might need it to pay for couples therapy… or ear plugs. Want to find out more about what’s changed with the PHG since Budget 2018? Check out our PHG summary article.
So for example…
If you’ve freshly graduated, and your fiancee and you are looking to buy a Build-to-Order (BTO) flat to start a family, you can consider buying a 4-room flat in a non-matured area at the earlier stages of your career. This way, you’ll be eligible for all the grants available for BTOs (AHG and SHG). Your income would also be at it’s lowest at the time you book your home (hence maximising on your grants). Consider the table below:
If you’d applied early in your career at a starting salary of, say, $2,000 each, and assuming you and your fiancee have only started work for 7 months, your average monthly household income calculated for the past 12 months would be $2,333. Qualifying you for a total grant amount of $70,000. And you’ll still be able to get a higher amount of loan when your home nears its TOP period (you will only need a bank loan when your BTO completes) few years later.
This amount is more than what you would get if you were to apply for your flat when you and your fiancee are already 2 years in the workforce, with a salary increment of an average of, say, $550 each. That’s an average monthly household income of $5,100. Which qualifies you for only $35,000 worth of grants. That’s half the amount you would’ve gotten if you’d just chosen your house earlier.
Of course, with waiting time for BTOs shortening to a mere 2 and a half years, you should ensure that at least one of you has a stable job. This example also assumes that your fiancee remains unchanged throughout both your working years (haha).
What if there’s only one person earning an income?
If there’s only 1 sole breadwinner in your family, and you’re looking to buy a resale flat urgently because you’re about to have children, consider getting a home near your parents. Aside from getting an extra $20,000 from the PHG to offset your home purchase, living near your parents can be convenient whenever you urgently need help babysitting, taking care of elderly parents, or just plain having family dinners.
If you’re willing to stay with them, you can even qualify for the newly-increased amount of $30,000 from the PHG.
Whether you’re taking a 4-room or a jumbo flat, you’re guaranteed a minimum of $40,000 as a base from the Family Grant/ Enhanced CPF Housing grant. You may also receive a third grant (the AHG) of up to $40,000 if your monthly household income is below $5,000.
That amounts to anywhere between $65,000 to $120,000 in grants.
Other things you should note about maximising your CPF housing grants
There are just 2 quick points we need to make:
1. You may need to pay a resale levy when buying a new property
If you buy a new HDB flat, or receive a CPF Housing Grant, you will need to pay a resale levy if you plan to buy another new HDB flat or a new EC unit. This is the government’s way of ensuring you don’t enjoy too many property subsidies in your lifetime. The amount of the resale levy is based on the size of your first HDB flat. There is no resale levy if you buy a resale flat or private property.
2. You can’t use the grants to skip out on your downpayment or monthly repayment
If you have taken out a bank loan, you will need to pay 5% of the purchase price in cash. You can’t use the grants to pay that portion. You also can’t use the grants to offset entire monthly repayments. All the grants are used for are to subsidise the initial purchase price – you cannot use it to avoid making any payments. If you’re trying to decide between taking an HDB loan or bank loan, you can easily speak to MoneySmart’s Mortgage Specialists to figure out which makes more financial sense for you.
3. What if my spouse is not a Singapore Citizen/ Permanent Resident but we’re both first time buyers?
The grants above would be halved the original amount it would’ve been for a couple where both parties are Singapore Citizens. Simple right?
Does HDB’s various grants and schemes confuse you? Let us know! We’d love to hear from you.
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