HDB RESALE FLATS

HDB RESALE FLATS

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(Waiver of Government levy): **

44.

Dr Lim Wee Kiak asked the Minister for National Development whether the Government levy for resale HDB flats will be waived if the flat is sold below the price purchased from HDB.

Mr Mah Bow Tan: Eligible first-timer families can enjoy a public housing subsidy by buying a new HDB flat sold by HDB at a subsidised price, or buying a resale HDB flat or a Design Build and Sell Scheme (DBSS) flat with a CPF Housing Grant.

While those who have previously enjoyed a public housing subsidy are allowed to purchase another subsidised new flat from HDB, the resale levy is imposed to reduce the subsidy on the second flat. This is to ensure a fairer allocation of public housing subsidies, so that more help can be targeted at new families who need to buy their first flat to set up home. By doing so, HDB avoids giving the same household multiple subsidies of the same high quantum.

Therefore, the objective of the resale levy is to reduce the subsidy of the second flat bought from HDB. It is not a capital gains tax and it does not matter whether the first flat was sold at a profit or loss.

However, flat owners do not need to pay the resale levy if they are not buying a second subsidised flat from HDB. They can keep the full proceeds from the sale of their first subsidised flat, if they buy a resale HDB flat from the open market.