Singapore has limited land resources, and one clear sign is the 99-year leasehold tenure of HDB flats, which, as of 2025, 77.2% of resident households live in. Based on government policies such as the Lease Buyback Scheme and the upcoming Voluntary Early Redevelopment Scheme (VERS), the current understanding is that most HDB flats will eventually run out of lease and be returned to HDB. This diminishing value as the term shortens is known as lease decay.
“As the leases run down, especially towards the tail-end, the flat prices will come down correspondingly,” said Prime Minister Lawrence Wong in 2017, when he was Minister for National Development. “So buyers need to do their due diligence and be realistic when buying flats with short leases.” Back then, he was concerned about older flats being sold at high prices, hoping to benefit from the Selective En bloc Redevelopment Scheme (SERS).
The Lease Buyback Scheme
Introduced in 2009, the Lease Buyback Scheme (LBS) is a retirement planning option offered by HDB that lets you monetise part of your flat’s lease by selling it to HDB. This lets the homeowner live in the flat for the rest of their life while using the proceeds to top up the homeowner’s CPF Retirement Account, enhancing the CPF LIFE Payout. Depending on the top-up amount, HDB may also provide an additional LBS bonus of up to $30,000.
According to the latest information provided in a Parliamentary reply earlier this year, around 16,000 households have participated in LBS since 2009. Back in 2024, another Parliamentary reply revealed that “from 2019 to 2023, the average LBS proceeds plus the LBS bonus received per household was about $261,000 for 5-room and bigger flats, $212,000 for 4-room flats, $168,000 for 3-room flats, $153,000 for 2-room flats and $98,000 for 1-room flats.”
The example on HDB’s website that illustrates how the LBS works is interesting. It describes a fully paid 4-room flat worth $450,000 with 65 years of lease left. Since the owners are 65 years old, they retain at least 30 years of the lease. This frees up the tail-end of 35 years that they can sell to HDB. The example prices this at $190,000.
Source: HDB
In this illustration, the HDB flat is valued at $450,000. Since the 35 years at the tail end of the lease is worth $190,000, we can assume the 30 years of lease the homeowner cannot sell is worth $260,000. While simplistic, this means the tail end of the lease is worth significantly less, even though it’s longer.
This is because lease decay works such that the market value of the lease declines sharply near the tail end.
The SLA Leasehold Table Or Bala’s Table
Determining the valuation of a lease in Singapore has been practised since 1947, and a relationship between leasehold and freehold values has remained enshrined here, believed to have been prepared for the colonial Land Office by an employee named Bala. The table has since become known as Bala’s Table.
The information was originally an internal Land Office document that got leaked to the private sector. However, on 31 July 2000, the Singapore Land Authority formally adopted the table, where it became known as the Leasehold Table.
The table simply shows leasehold values as a percentage of freehold value. As a chart, it shows a downward curve: leasehold value decreases slowly for the first 60 years, then accelerates sharply as the lease shortens in the final 30 years.
Source: Centre for Livable Cities
Read Also: How Much Cash Do You Really Need Before Buying A Resale HDB Flat?
SLA’s Leasehold Table, or Bala’s Table, provides a straightforward pricing framework for government agencies to determine a property’s value. A 2025 journal article from the Singapore Management University, published in the International Real Estate Review, said there was “compelling evidence” that HDB used Bala’s Table to adjust the selling prices of 2-room Flexi flats, as well as when providing lease values for the Lease Buyback Scheme.
