As Singaporeans, we are all appreciative of the substantial grants we receive when we buy an HDB flat.
However, some of us might ponder a little more about the three-letter acronym of “CPF” in the name of the grants – Enhanced CPF Housing Grant (EHG) – and what implications that might have when it comes time to sell our flat.
About The Enhanced CPF Housing Grant (And Its Cousins)
When we think of housing grants, we typically think of the Enhanced CPF Housing Grant (EHG) and its predecessors it replaced, namely the Special CPF Housing Grant and Additional CPF Housing Grant.
In fact, there is an entire family of CPF housing grants alongside the EHG. These include grants for resale flat buyers like the Family Grant and Proximity Housing Grant, as well as grants for second-timer applicants like the Step-Up CPF Housing Grants (for second-timers), Half-Housing Grant (for Singaporeans whose spouse previously received a grant), and Top-Up Grant (for those who previously received the Singles Grant and now qualify for Family Grant).
All of these grants are disbursed by HDB, into the CPF Ordinary Accounts of eligible homebuyers, in order to offset the purchase price of the flat, including the portion of downpayment payable with CPF monies.
What Happens To The Grant Money When You Sell Your HDB Flat?
Not much thought may be given to these grants at the point of receiving it, as they typically go straight into paying for your HDB flat. When selling your flat, you may start to wonder what happens to these housing grant monies. Here’s what happens when you sell your flat:
- You first need to account for fees and costs relating to the sale, such as levies, legal costs, and stamp duties.
- After that, you will need to settle any outstanding mortgage you may have.
- Next, you’ll need to return any CPF monies used to pay for the flat – either downpayment or monthly repayments – plus accrued interest.If the proceeds from the sale of your flat do not cover the amount of CPF used plus accrued interest, the cash deposit you collected from the buyer will be used. If that is still insufficient, you do not need to top-up the shortfall with cash, provided your flat was sold at market value.
- After returning CPF monies used with accrued interest, you will then be able to receive the balance (if any) in cash.
As housing grants are first credited into your CPF Ordinary Account before being used to pay for your home purchase, it will be considered as CPF monies under point 4 above. This means that when you sell your flat, the CPF grant monies you received will be returned to your own CPF Ordinary Account plus accrued interest, which you can then use for your next flat purchase, for investment purposes, or your retirement. In other words, the grant money is NOT returned to HDB or the government.
The only caveat to this is that if you received a housing grant of more than $30,000, part of the housing grant you refund to your CPF account will be credited to your Special Account/Retirement Account and Medisave Account.
How Much CPF Do You Need To Return To Your CPF Account Upon Flat Sale?
In essence, you need to return to CPF:
- CPF monies used for your initial downpayment, as well as any legal fees, stamp duty, etc
- Accured interest on this initial downpayment and legal fees, stamp duty, etc
- CPF monies used for your monthly housing loan repayment / lump sum repayment
- Accrued interest on this monthly housing loan repayment / lump sum repayment
- Housing grants your receive when purchasing your HDB flat
- Accrued interest this housing grant monies
To check how much CPF you need to return to your CPF Ordinary Account – and Special Account/Retirement Account and Medisave Account, if applicable – you can log in to the CPF website with your SingPass and click on My Statement > Section C: Property > My Public or Private Housing Withdrawal Details.
Those who are aged 55 and above, you will need to check with the CPF Board directly on the refund amount.
Grants > Subsidy
While you may not be able to physically see these funds after selling your HDB flat, and even have to pay accrued interest on it to your CPF accounts, the structure of CPF housing grants gives Singaporeans flexibility it can be used for their next flat purchase, kept for retirement, or used for other purposes.
On the other hand, a direct subsidy/discount off the selling price of HDB means that you would only benefit whenever you buy a flat.
This article was originally posted on 29 January 2020, and has been updated to provide the latest information.
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