Minister Confirmed Value of HDB Flats At End of 99-year Lease Is Zero

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Source: geraldgiam.sg

Value of HDB flats at end of 99-year lease

All HDB flats are sold to Singaporeans on a 99-year lease. We are technically not home owners, but lessees.

I asked the Minister for National Development, during the 20 January 2014 Parliament sitting, what the value of HDB flats would be once their leases expire. I also asked whether the pace of SERS — the Selective En Bloc Redevelopment Scheme — will be fast enough to replace the flats reaching the end of their lease.

The Minister confirmed that the value of the flats will be zero at the end of their 99-year lease. He also indicated that the selection of sites and pace of SERS depended on factors including the site’s redevelopment potential. Implicit in what he said was that SERS is not a scheme intended solely to replace old flats reaching the end of their lease.

He revealed that there are about 31,000 flats which are more than 40 years into their 99-year leases. This number will grow larger each year. It remains to be seen what the Government’s plans are for lessees whose flats approach the end of their lease.
The full transcript of the question and answer are below.

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Mr Gerald Giam Yean Song asked the Minister for National Development (a) how many HDB blocks are more than 40 years into their 99-year lease; (b) what will be the value of an HDB flat once it reaches the end of its 99-year lease; (c) what is the average number of flats undergoing redevelopment under the Selective En Bloc Redevelopment Scheme (SERS) each year for the past 10 years; and (d) whether the pace of SERS is fast enough to redevelop all HDB blocks before they reach the end of their lease.

Mr Khaw Boon Wan (The Minister for National Development): The Selective En bloc Redevelopment Scheme (SERS) is part of the Government’s estate renewal strategy for older estates. It allows intensification of land use and revitalises such estates through new developments. At the same time, it offers an opportunity for flat owners to buy a new replacement flat with a fresh 99 year lease.

In the last 10 years, SERS has benefitted the owners of about 18,000 flats. As the name suggests, the identification of suitable precincts for SERS is selective. The selection of sites and pace of SERS will depend on factors such as their redevelopment potential, and the availability of replacement sites for rehousing and other resources.

Currently, there are about 300 HDB blocks with 31,000 flats which are more than 40 years into their 99-year flat leases.
Like all leasehold properties, HDB flats will revert to HDB, the landowner, upon expiry of their leases. HDB will in turn surrender the land to the State.

[Source: Singapore Parliament Reports]


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