HOUSING AND DEVELOPMENT ACT (Exemption from compulsory acquisition of property)

Mr Ho See Beng asked the Minister for National Development whether the owner of a Housing and Development Board flat who inherited from his father a share in a piece of property which has since been sold and its proceeds divided among the children, according to his father's will, can be exempted under section 48A (8) of the Housing and Development Act from having his flat compulsorily acquired by the Board or from having to pay a penalty and, if not, why not.

Mr Lee Yock Suan (for the Minister for National Development): Mr Speaker, Sir, a lessee of an HDB flat who inherits a share in a private residential property may be allowed to retain both his share in the private property and his HDB flat provided all the following conditions are met:-

(a) The lessee's interest in the inherited property does not exceed 50%.

(b) The value of the lessee's share in the inherited property does not exceed $200,000.

(c) The lessee satisfies the HDB that he is unable to recover possession of the inherited property for his exclusive use.

(d) The lessee informs the HDB of the interest inherited.

If the lessee fails to declare the interest inherited and if such inheritance is subsequently discovered by the HDB, the lessee will still be allowed to retain his HDB flat and inherited private property provided all the other conditions are complied with, but he has to pay a penalty fee based on 5% of the value of the interest inherited.

Where the said conditions are not met, HDB's present rules require the lessee to resell his HDB flat to the HDB if, at the time of inheritance, he has occupied it for less than five years, or on the open market if his occupation has exceeded five years. The HDB is reviewing this rule to allow such future lessees the option either to sell their shares in their inherited private properties in order to be allowed to retain their HDB flats, or alternatively to resell their HDB flats if they wish to retain their inherited properties.

Mr Ho See Beng: Sir, may I ask the Minister of State this question. If the interested person submits that he has assigned his interest to a person who is not a lessee of the HDB flat, will he still be subject to the penalty as imposed by the Housing and Development Board?

Mr Lee Yock Suan: Mr Speaker, Sir, I do not quite understand the question.

Mr Ho See Beng: Let me put it in a simple way. If the interested person has assigned his interest to another person, will he still be subject to the penalty?

Mr Lee Yock Suan: Mr Speaker, Sir, a penalty is imposed in the case where the conditions I have specified are met but the lessee has not informed the HDB. So the assignment really does not help matters. He should inform the HDB and to see whether he qualifies. And, as I have mentioned, in fact, in the case of inheritance we are going to relax the rules to allow him the option of one or the other. So if he has any case in mind, he should write to the HDB and I will ask HDB to consider the case.