Last Updated on by Tree of Wealth
Are you thinking of buying a new house? You’re not alone. A report shows that 1 in 2 Singaporeans are interested in purchasing a home in the next two years, even with the rising house prices. If you’re one of them, you probably know that it can be a stressful process. There are so many options and factors to consider—not to mention that most people do not want to use their life savings just to put a roof over their heads!
If you’re looking to buy a new house, have just purchased a new one, or are looking to refinance, we can help you navigate the process and find the right option. With our guide, you’ll learn about the different grants available for first-time buyers—including executive condo housing grants, resale HDB grants, single grants, and proximity grants—so you can figure out which is right for you.
A quick note: HDB defines ‘families’ as married couples and/or parent(s) with child(ren) or multi-generation families.
1. EC housing grants for families
If you’re looking to buy your first home, you may be eligible for the Executive Condo(EC) Housing Grant. You will need to be a first-time housing applicant applying for an executive condo as a couple or family unit(two parents and their children) with a household income ceiling of $12,000.
If one of you is a first-timer applicant and the other half has previously applied for the HDB EC grant, you can still qualify for half of the housing grant. The amount is half of the Family Grant. You can apply for the CPF Housing Grant for EC at the point when you book your unit.
Assuming the buyers are both Singapore citizens, you can get $10,000 to $30,000, depending on your income. For citizen-PR households, the grant is $10,000 less, although if you have a child or the PR converts into a citizen, you can get a ‘Citizen Top Up‘ later, which is a subsidy. Check the HDB site for the full EC housing grant details.
2. Resale HDB grands for families
If you are looking for a resale flat, you can apply for several different resale HDB grants depending on your eligibility. Let’s look at two applicable to families, which consist of :
a. Enhanced CPF Housing Grant
For first-timer applicants, there is the Enhanced CPF Housing Grant (EHG) to help with your new BTO or resale flat purchase.
First-timer families may qualify for an EHG of up to $80,000. In addition, a couple comprising first-timers and second-timers may be eligible for an EHG (Singles) of up to $40,000.
If you are buying a resale flat, you must first qualify for the CPF Housing Grants for resale flats (Families or Singles) before applying for the EHG. For first-timer households:
The average monthly household income (including all applicants and occupiers) for the months worked during the 12 months before the flat application must be at most $9,000.
b. CPF Housing Grants for Resale Flats (Families)
First-time applicants can apply for the CPF Housing Grant Scheme if they wish to purchase a resale flat. If both flat applicants are first-timers, Singaporeans or PRs who buy a 2 to 4-room resale flat can take up to a $50,000 grant. Those looking for a 5-room or bigger flat can take a grant amount of up to $40,000.
Couples who have one application that has previously taken a grant will receive a smaller grant of up to $25,000 for 2 to 4-room flats or up to $20,00 for those purchasing bigger flats. The grant amounts differ depending on whether the applicant is a Singaporean or a Permanent Resident. You can check here to see how your application eligibility will affect your resale HDB grant amount.
Your average gross monthly household income must be at most $14,000 for a 2-room or above resale flat and $21,000 if purchasing with an extended or multi-generation family. This is considered an HDB additional housing grant because if you qualify for this grant, you can stack it up with an Enhanced CPF Housing grant. With both grants, you can receive a higher subsidy for the housing price.
c. Resale flats: Proximity Housing Grant (PHG)
For young couples who have parents willing to help with childcare, it saves a lot of time to stay with or near them. You can tap the Proximity Housing Grant (PHG) if you want a resale flat. This grant does not require the buyer to be a first-time applicant, nor is there an income ceiling. The homeowner must live with their parents or within 4km of them. The parents need not stay in an HDB flat. This HDB housing grant is also available for elderly folks who wish to stay close to their married children.
The grant amount is $20,000 if you live within a 4km radius of your parents/married children. Or get $30,000 if you apply to live together as an extended family. The only criterion is that the HDB resale flat must be two rooms or bigger, with a least of minimally 20 years left. However, note that the resale proximity grant is for one-time use only.
3) Housing grants for singles
Singles are considered Singapore citizens who are 35 years old or above if unmarried or divorced or 21 years old or above if widowed or an orphan.
There are several housing grants for singles that you can tap into if you fall into this category.
For example, if you are Singapore Citizen (SC) buying a resale flat on your own or with your non-resident spouse, you can apply for a CPF Housing Grant for Resale Flats that grants up to $25,000 for the purchase of a 2- to 4- room resale flat or $20,000 for a 5-room resale flat.
If you are buying with another first-timer single (s), the grant allowance is up to $25,000 per person for purchasing a 2- to 4-room resale flat (i.e. a total of $50,000). It is up to $20,000 for a 5-room or bigger resale flat (i.e. a total of $40,000).
If you want to buy a BTO flat instead, apply for the Enhanced CPF Housing Grant (Singles) instead. The EHG grants up to $40,000 to help with your new flat purchase for first-time applicants. If you are buying with another first-timer single (s), you may each be eligible for an EHG (Singles) of up to $40,000, i.e., a total of $80,000. For those buying a resale flat, you can apply for the CPF Housing Grant and the EHG if you meet the eligibility conditions.
The Proximity Housing Grant (PHG) also applies to eligible singles for those who want to stay near their parents. If you buy a resale flat within 4km of your parents, you can get up to $15,000.
4. Parent grants for resale versus BTO
The Proximity Housing Grant is for those who want to stay near their parents. Both families and singles can buy a resale house within 4k of their parents and apply for a one-time grant.
However, if you wish to purchase a new BTO flat, there is no such ‘BTO near parents’ grant. So should you buy a BTO or a resale flat? Well, if you are a newly-married couple beginning to build your nest egg, buying a resale flat can get you up to $80,000 worth of grants. But a new BTO can be much more affordable than a resale flat in the same area. So you will have to consider your own lifestyle needs, and balance them against your future expected earnings.
In a nutshell, here is a quick comparison of the various grants:
How do I pay for my HDB flat?
If you, like most Singaporeans, are taking out a loan to finance your flat, the HDB grants will benefit you. The grant amount is disbursed into your CPF Ordinary Account, so you can use it when you pay for your HDB flat. While you do not have to pay it back, you have to refund it to your own CPF account, along with other CPF monies used and accrued interest when you sell your house. The next question is whether you should take a bank loan for your HDB resale flat or an HDB loan. Check out our guide here to explore your options.
Whether you take an HDB loan or bank loan, you must also consider ways to protect your family against unexpected debt if something happens to you. Taking up Term Insurance is one way to protect your finances in the event of death, total permanent disability (TPD), and critical illnesses. This prevents the loan from becoming a debt if one party meets a death or TPD situation.
Contact us below to find the most competitive and best coverage on mortgage term insurance.