The way the eligibility for the Special Housing Grant has changed is like the way education in Singapore has changed. In the past, having a diploma or a basic degree would put you on the fast-track in your career. These days, throw a stone in a CBD lunchtime crowd and you’ll hit someone with an MBA. At least.
The same thing is happening to the Special Housing Grant – it’s no longer just for lower-income families. After last night’s National Day Rally, more than two-thirds of Singaporean families will be able to qualify for the Special Housing Grant.
What’s so special about the Special Housing Grant?
The Special Housing Grant is given to first-time home buyers who want to buy a new HDB Build-To-Order flat in a non-mature estate. Only 2-room, 3-room and 4-room flats qualify for this Housing Grant. Depending on your income, you may qualify for a Special Housing Grant between $5,000 and $40,000. Your average monthly household income needs to be $8,500 and below.
How has the Special Housing Grant changed this time?
Before last night’s National Day Rally, you had to be earning an average monthly household income of $6,500 and below if you wanted to enjoy the Special Housing Grant. The maximum Special Housing Grant amount you could get was $20,000. This amount has now doubled to $40,000, and families which earn an average monthly household income of $8,500 and below will enjoy at least $5,000 off their new flat.
This is a huge change from before 2013, when the Special Housing Grant was only for families with an average monthly income of $2,250 and below.
This is how the new amounts for the Special Housing Grant will be distributed.
Who will benefit the most from the new Special Housing Grant?
Anyone eligible to buy a 2-room, 3-room or 4-room HDB BTO flat and is earning $7,000 or less a month now saves an additional $20,000 than before. This means that a household earning $1,500 or less are now eligible for $80,000 in grants.
But families aren’t the only ones to benefit. The income ceiling has been raised for singles too, with those 35-years and above and earning $4,250 or less now eligible for a Grant of at least $2,500.
Compared to before, singles and those applying for a 2-room flat under the Non-Citizen Spouse Scheme and the Joint Singles Scheme will now enjoy up to $10,000 more because of the Special Housing Grant.
How much do you have to pay for a HDB flat now?
Let’s look at two possible illustrations:
Ms Nurul and her husband want to buy a 4-room BTO flat in a non-mature estate. The price of the flat is $295,000, and altogether they earn $5,000. This means that their total eligible grants are $45,000 ($20,000 more than before). They save about 15% of their flat purchase.
Mr Teo is single and above 35, and wants to buy a 2-room BTO flat in a non-mature estate. The price of the flat is $90,000 and he earns $3,500. This means the total grant he is eligible for is $10,000. He would not have been eligible for any grants before. As a result, he gets to save about 11% of his flat purchase.
Wait… doesn’t this mean that there’ll be a lot more competition for public housing in Singapore?
Essentially, yes. Not only have the income ceilings been raised, allowing more Singaporeans to apply for HDB flats and ECs, but with the extra Special Housing Grant, more Singaporeans will be willing to buy 2-room, 3-room and 4-room flats.
While it’s great that more Singaporeans are now eligible for public housing, we also hope that HDB ensures that priority is given to those from lower-income families. There’s no point making public housing more affordable if these families can’t get a flat in the first place.
How do you feel about the announced increase in the Special Housing Grant? Let us know.
Personal finance tips delivered to your inbox!
Receive news, subscriber-exclusive promotions and guides on how to become smarter with money.
We promise never to spam you!