Debated in Parliament on 7 Jul 2014.
Mr David Ong asked the Minister for National Development what is the rationale of requiring young couples to repay the Additional Housing Grant when they fail to go through with the purchase of the HDB flat as a result of a breakdown in their relationship or marriage.
Madam, the additional CPF Housing Grant (AHG) is to help eligible first-timers buy their first flat. And that is why if the couple does not eventually buy the flat, they will have to return the grant to the Government.
The individuals can subsequently apply for the grant again with their new partner for their next flat purchase, subject, of course, to the prevailing eligibility conditions.
Madam, I would like to thank the Minister for his reply. Two supplementary questions. For low-income applicants to return the disbursed Additional Housing Grant, especially in cash, can be quite a huge burden when they annul their marriage as a result of a failed relationship. This is on top of forfeiting the 5% down payment. Can the Minister share with us whether there are other schemes in place to help these financially-challenged individuals to repay the Additional Housing Grant? And can the Ministry also review this penalty of forfeiture fee or accrued interest for low-income individuals who may
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need to defer the Additional Housing Grant repayment?
Madam, I think a penalty for cancellation of home purchase is a common industry practice. The only difference is in the quantum. I believe that in the private sector, if you cancel your plan to purchase a condo or house, they charge as much as 20%. In the case of HDB, it charges 5%, which I think is quite reasonable.
How do we help isolated cases who are in such a situation? We do help because we take into account their situations. There are several ways – sometimes by cash instalments, or if they do not have enough savings in the CPF because they are young couples, they will in due course build up their CPF savings and we can allow future payment from their CPF. Those are some of the things that we do to help.
Fortunately, the number of such cases is small. When I was looking at some of the data a few weeks ago, my sense is that in a hot market, like the last three years when property prices were going up, many couples were actually not ready for relationship but they decided to jump in, thinking that they might not be able to afford a flat when they eventually get married. But now that we have stabilised the market, we notice such data has been coming down. So, the trend is a good one.
My advice to young couples is that, at your age, you have maybe 50, 60, 70 years ahead of you. I guarantee you there shall be many property bubbles and busts, but work on your relationship. So, hopefully, while there may be several property cycles, your relationship is always permanent.
Like in my case, two weeks ago, my wife and I celebrated our 37th wedding anniversary. I think that is what couples should try to work at. Do not make a decision about whether to jump in for your BTO, thinking that you may not be able to afford a flat. We will make sure that there is always a flat that you can afford, at least within your budget. We can say it with great confidence because we have two major levers: we control the construction programme; secondly, we set the price. So, do not worry.
Mdm Speaker, I would like to ask the Minister, for a couple who annul their marriage and they have to repay the Additional Housing Grant (AHG), is it true that if the couple consists of one Singaporean and one PR, the AHG is recovered from the Singaporean? I have one case of a resident who is in this situation. And if it is so, what is the reason behind it?
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I suppose we should recover the grant from whoever receives the grant.
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