Differentiated HDB Resale Levy Rates

Ms Ellen Lee asked the Minister for National Development (a) what factors were considered in the differentiated resale levy rates imposed on HDB flats; (b) why was the resale levy policy revised in 2006; (c) why there is an interest rate of 5% imposed under the previous resale levy policy; and (d) whether the Ministry will consider reviewing the HDB resale levy policy so that the levy can be paid in instalments at the same time that the new housing loan is being repaid instead of it being paid in cash upfront.

Mr Khaw Boon Wan: When computing the resale levy, the main consideration is the type of the subsidised HDB flat. The smaller the flat-type, the lower is the levy. This helps the lower income family who bought a small flat as their first subsidised flat upgrade.

The resale levy policy was revised in 2006 in response to public feedback. Before 3 March 2006, the resale levy was based on a percentage of the resale price of the subsidised flat. As this would vary with the market, it created an uncertainty for the HDB upgraders.

Following public feedback, the HDB revised the resale levy policy. It is now a fixed quantum of between $15,000 and $50,000, based on the flat type of the first subsidised HDB flat. This revision makes it clear how much levy is payable, and allows second-timers who are intending to buy a second subsidised flat from HDB to plan ahead.

I have explained in this House before why an interest rate was imposed on some resale levies. Those who opted to defer the payment of their resale levy did so knowing that interest would be charged.

For families who have financial difficulties paying the resale levy, we will assist them on a case-by-case basis. This may include payment via instalments.

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