5-YEAR OCCUPATION PERIOD FOR HDB FLATS

Mr Yeo Guat Kwang asked the Minister for National Development if he will review the latest Housing and Development Board's policy so that the period a HDB apartment is rented out due to the owner's need to be stationed overseas will be considered in the 5-year occupation period, otherwise Singaporeans heeding the Government's call to regionalise and globalise will feel penalised.

Mr Lim Hng Kiang: HDB flats are sold under the home ownership scheme for owner occupation. HDB had previously exercised flexibility and allowed lessees who sublet their whole flats under the Approved Subletting Policy to include the subletting period as part of the minimum occupation period. Unfortunately, this had led to abuse. Some lessees bought flats from HDB or from the open market, rented them out, and subsequently sold the flats, without ever physically occupying them. The HDB flats were used for capital gains and rental income.

Under the recent revised policy, HDB has imposed the requirement that all lessees must fulfill the minimum period of physical occupation before they are allowed to sell their flats or apply for the second new HDB flat. Those who have sublet their flats are required to make up for the period of subletting by physically occupying the flats. The revised policy will not affect genuine home buyers who purchase flats for their own occupation. It will, however, deter those who intend to use the HDB flat as a form of investment for rental income and capital gain.

Nevertheless, HDB will exercise flexibility for flat lessees who are posted overseas on official duties. Flexibility will be granted to employers and employees of locally-owned firms and MNCs, who are required to go overseas on official duties. It will also be extended to employees of GLCs, Statutory Boards and civil servants.

These flat lessees will be allowed to include the period of subletting of whole flat in the computation of the minimum occupation period, subject to a maximum of 3 years for direct-purchase flats and 1.5 years for resale flats.