Five-percent Interest Rate on HDB Resale Levy

Mr Zainal Sapari asked the Minister for National Development (a) if he will explain the need to impose a 5% per annum interest rate on the HDB resale levy on buyers of a second HDB subsidised flat who make the purchase after more than one year of selling their first subsidised flat; and (b) whether HDB can consider waiving the interest payable to help families who wish to own a flat but who are unable to do so because of the large levy payable due to the accumulated interest payments.

Mr Khaw Boon Wan: Buyers of a second subsidised HDB flat are required to pay the resale levy. They are referred to as HDB second-timers.

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The resale levy makes a distinction between such second-timers and first-timers. The latter are Singaporeans who buy a subsidised HDB flat, either through the HDB's BTO programme, or via the resale market with a CPF Housing Grant, for the first time. As second-timers have already received a housing subsidy once before, the resale levy reduces the second subsidy they will receive. This way, we ensure a fairer allocation of housing subsidies across flat buyers.

For most second-timers, the resale levy was payable at the time the first subsidised flat was sold. However, in response to some requests, HDB had allowed them to defer the payment of the levy until they buy a second subsidised flat from HDB. The deferred payment would, hence, attract an interest. Those who deferred the payment of their resale levy did so knowing that interest would be charged.

For families who need to purchase their second home but have financial difficulties paying the resale levy and interest, we will assist them on a case-by-case basis.