New Plus flat model: No rental of whole unit allowed, income ceiling of S$14,000 for resale buyers

SINGAPORE — The new model of Plus flats will come with an income ceiling of S$14,000 for buyers of resale units, and owners cannot rent out the entire home at any time, National Development Minister Desmond Lee said on Monday (Aug 21).

In addition, a 30-month wait-out period will apply for private property owners looking to buy Plus flats, added Mr Lee.

These details come a day after the National Day Rally where Prime Minister Lee Hsien Loong announced the Housing and Development Board’s (HDB) new classification of Standard, Plus and Prime public housing flats that will come into effect in the second half of next year.

Plus flats are in choicer locations within regions, such as being near transport nodes and town centres, or in more central locations such as Ang Mo Kio, Bishan, Toa Payoh, Clementi, Bedok as well as Queenstown, Bukit Merah and Kallang-Whampoa. 

They come with more subsidies but tighter resale conditions than Standard flats. 

This new classification will make flats at choicer locations more affordable and keep Singapore's housing system fair by providing more subsidies for those buying new Plus flats, Mr Desmond Lee said.

He added that a Build-to-Order (BTO) flat in a choice location would cost about S$650,000 today, but about S$550,000 after the additional subsidies under the Plus model.

Speaking at a post-National Day Rally engagement session at the Lifelong Learning Institute, the minister said that there will be no change to the treatment of the existing 1.1 million HDB flats.

Some 90 people attended the session organised by Reach, the Government's feedback unit. 

MORE RESTRICTIONS TO DISCOURAGE QUICK FLIPPING, SUPPORT GENUINE HOMEBUYERS

To support genuine home buyers, HDB will impose a longer Minimum Occupation Period of 10 years and disallow owners of Plus flats to rent their whole flat out. This rental restriction applies to first-time and resale buyers of Plus flats.

“This is to ensure owner occupation for such flats and deter those who intend to 'flip' the flats for quick gains or rent them out for long-term yields,” said Mr Desmond Lee.

In addition, to keep housing affordable, Plus resale flats will also come with an income ceiling of S$14,000 for married and single buyers, which covers 80 per cent of Singaporean households, he added.

The S$14,000 income ceiling is the prevailing salary cap for those who want to buy new BTO homes.

As for singles, those looking to buy resale two-room Prime flats will be subjected to an income ceiling of S$7,000. Similarly, this is the current income ceiling for singles buying new BTO flats.

Mr Lee said that the higher income ceiling of S$14,000 for singles to buy larger resale Plus flats is to help ensure that they can afford these homes.

“Together, these moves will allow singles a wider range of options on the resale market,” he added.

Buyers of Prime flats will receive the most amount of subsidies, but will also have the tightest restrictions to ensure housing affordability and fairness.

Prime flats will also come with a longer 10-year Minimum Occupation Period, and owners, similarly to Plus units, cannot rent out the whole unit.

Mr Lee said that HDB prices flats affordably by establishing market value of new flats from comparable resale flats nearby, and applying a significant discount so that flats are priced below market value.

“Going forward, even as Standard flats remain the majority of our supply, HDB will build more flats in these attractive locations, so that you have more housing options,” Mr Lee said. 

“The Plus model will ensure that these homes remain affordable for you, and for your children, the next generation.”