Jamus Lim on Central Provident Fund (Amendment) Bill
A proposal to require the owners of HDB flats that have enjoyed additional subsidies to prioritise the repayment of those subsidies from proceeds following the sale of the flat may “inadvertently impose a liquidity crunch” on them, said MP Jamus Lim in Parliament on Monday (Oct 14). This is because paying back the subsidies in cash would “exhaust much of any cash gains that were made”, while the sellers could still face a gap between the market price of their next flat versus its official valuation, which would have to be paid in cash. Assoc Prof Lim said he has encountered constituents in Sengkang facing such a dilemma when seeking not even to upgrade, but to downgrade. He added that this is one of the “unintended consequences of the current HDB pricing model, where a higher sticker price is de-emphasised simply because subsidies mean that the de facto price faced by buyers would be lower”. He said while HDB seems to be dealing with the subject on a case-by-case basis, its basis for accepting appeals is opaque. He called this “a systemic issue that should merit more careful study”. Assoc Prof Lim also spoke on the decision to close the CPF Special Account, which will put an end to the loophole of CPF shielding. He said despite assurances by the Government that the CPF rate is adequate for retirement, those who were taking advantage of the loophole “clearly thought otherwise”. He reiterated a Workers’ Party call for the Government to offer more options for higher CPF returns.
A proposal to require the owners of HDB flats that have enjoyed additional subsidies to prioritise the repayment of those subsidies from proceeds following the sale of the flat may “inadvertently impose a liquidity crunch” on them, said MP Jamus Lim in Parliament on Monday (Oct 14). This is because paying back the subsidies in cash would “exhaust much of any cash gains that were made”, while the sellers could still face a gap between the market price of their next flat versus its official valuation, which would have to be paid in cash. Assoc Prof Lim said he has encountered constituents in Sengkang facing such a dilemma when seeking not even to upgrade, but to downgrade. He added that this is one of the “unintended consequences of the current HDB pricing model, where a higher sticker price is de-emphasised simply because subsidies mean that the de facto price faced by buyers would be lower”. He said while HDB seems to be dealing with the subject on a case-by-case basis, its basis for accepting appeals is opaque. He called this “a systemic issue that should merit more careful study”. Assoc Prof Lim also spoke on the decision to close the CPF Special Account, which will put an end to the loophole of CPF shielding. He said despite assurances by the Government that the CPF rate is adequate for retirement, those who were taking advantage of the loophole “clearly thought otherwise”. He reiterated a Workers’ Party call for the Government to offer more options for higher CPF returns.
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