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New Rules on Housing
 

Types of Properties Affected

 
  • Private residential properties
 
  • Commercial properties under Non-Residential Properties Scheme
 
  • HDB flats with market interest rate loans
 
Changes

 

Change #1 – CPF Withdrawal Limit

 

 

Change #2 – Reversal of CPF Charge

 

 

Change #3 –10% downpayment for Private Properties

 

 

Change #4 –10% cash downpayment for HDB Flats

 
Changes
   
Change #1 – CPF Withdrawal Limit

CPF withdrawal for residential property beyond 100% Valuation Limit (VL) is subject to the lower of:
  • Available Housing Withdrawal Limit (AHWL)

  • 150% of VL

Notes:

1.

The Available Housing Withdrawal Limit is 80% of the gross CPF savings in your Ordinary and Special Accounts less the prevailing Minimum Sum. The gross CPF savings refer to the total savings in your Ordinary and Special Accounts including the amounts already withdrawn for housing, education and investments.

Before you can withdraw the additional funds under the AHWL, you must also have enough balance in your Ordinary and Special Accounts to set aside the cash component of the Minimum Sum.

   
2.

The VL refers to the value of property at the time of purchase or the purchase price, whichever is lower.

   
3.

The 150% cap will be reduced to 120% in equal proportion over five years as shown below:

Date of Purchase
CPF Withdrawal Limit
1 Sep 2002 – 31 Dec 2003
150% of VL
1 Jan 2004 – 31 Dec 2004
144% of VL
1 Jan 2005 – 31 Dec 2005
138% of VL
1 Jan 2006 – 31 Dec 2006
132% of VL
1 Jan 2007 – 31 Dec 2007
126% of VL
1 Jan 2008 onwards
120% of VL
Example:  
Purchase Price
= $600,000
Market Value = $550,000
Ordinary Account balance = $100,000
Therefore,
Valuation Limit (VL)
= $550,000
Cash Downpayment = $ 60,000
CPF Lumpsum
= $100,000
Loan = $440,000
 
When CPF lumpsum plus CPF used to service loan exceeds 100% VL (I.e. 550,000), further CPF withdrawal is subject to lower of AHWL or 150% VL.
   
    (1) (2)
Ordinary Account balance (a) $ 50,000 $ 50,000
Special Account balance (b) $ 35,000 $ 15,000
Amount withdrawn for:      
Housing (c) $550,000 $800,000
Investment (d) $100,000 $100,000
Education (e) $ 20,000 $ 20,000
   

Gross Savings   $755,000 $985,000
Less MSS   $ 75,000 $ 75,000
   

(f) $680,000 $910,000
   

80%x(f) (g) $544,000 $728,000
Available Ordinary Account (h) $ 50,000 $ 30,000
(after setting aside MSS cash)
AHWL
(lower of (g) or (h))
or
(A) $ 50,000 $ 30,000
150%VL   $825,000 $825,000
Less
     
Housing Withdrawal   $550,000 $800,000
   

Balance 150%VL (B) $275,000 $ 25,000
   

Further CPF withdrawal for loan:   $ 50,000 $ 25,000
       
       


 

Change #2 – Reversal of CPF Charge

CPF savings withdrawn will rank after outstanding bank loans taken for purchase of residential and commercial properties.


 

Change #3 –10% downpayment for Private Properties

For private residential property purchase, CPF can be used to pay 10% downpayment. With the change, the purchase price of a private residential property can be financed as below:

  • 10% - Cash

  • 10% - Cash or CPF
  • 80% - Loan, CPF or cash


 

Change #4 –10% cash downpayment for HDB Flats

For HDB flats financed with bank loans, the 10% cash downpayment requirement will be phased in gradually over 5 years beginning from 1 Jan 2004.

  • 1 Jan 2004
  • 2%
  • 1 Jan 2005
  • 4%
  • 1 Jan 2006
  • 6%
  • 1 Jan 2007
  • 8%
  • 1 Jan 2008 onwards
  • 10%


     

     
    For any clarifications, please call 1800-227 1188 (code 3)
     

     Last Updated on: Thursday, June 30, 2011 at 5:48 PM
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