Wednesday, February 6, 2013

BTO prices delinked by 'varying discounts to first-timers'


NATIONAL Development Minister Khaw Boon Wan said the Government has delinked the prices of new flats from the prices of resale flats by varying the discounts given to first-time buyers

The Straits Times
February 6, 2013

NATIONAL Development Minister Khaw Boon Wan said the Government has delinked the prices of new flats from the prices of resale flats by varying the discounts given to first-time buyers.

This is to keep the prices of new flats stable and affordable for Singaporeans buying public housing for the first time, and the discounts are in addition to the housing grants these buyers also enjoy, he said in Parliament yesterday.

"The meaning of delinking means I vary the discounts so that the prices can remain steady," he said in reply to a question from Ms Lee Bee Wah (Nee Soon GRC).

Last Friday, Mr Khaw said he had delinked these prices since he took over the housing portfolio in 2011, to keep prices affordable amid a rising property market.

That is how Build-to-Order flat prices across HDB's launches have remained largely stable, despite the resale price index rising 12.5 per cent since the second quarter of 2011.

Mr Khaw has directed the Housing Board (HDB) to continue with this new pricing policy for as long as "property remains hot".

He also took questions yesterday on resale levies, which have become a barrier to some families when making a subsequent flat purchasebecause they sold their first flat before a formula revision in 2006.

He said the Government can reduce or waive the interest charges on resale levies to help families upon an appeal. The levy can also be incorporated into the price of the new flat, so that it can be paid in instalments or out of their Central Provident Fund accounts.

"Yes, indeed, there are some families where the levy has become a barrier and these are essentially (those) who sold their flats quite some time ago, when the levy was computed based on a different formula," said Mr Khaw.

"And when policy changes, it will not be fair to all those tens of thousands of people who already paid based on the previous formula. But we try to be as helpful as we can," he said, replying to questions from Dr Lim Wee Kiak (Nee Soon GRC) and Mr Pritam Singh (Aljunied GRC).

Mr Khaw said the HDB collected about $22 million in resale levy per year over the last three years and received on average 2,900 appeals to waive or reduce the levy each year for the same period. The resale levy is paid by the buyer to HDB when purchasing a second subsidised flat, and can range from $15,000 to $50,000, depending on the flat type. Previously, it was pegged to a percentage of the flat's selling price.

It is meant to reduce the subsidy on the second discounted flat in order to maintain a fair allocation of subsidies for first- and second-time buyers.


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