Minister at the Prime Minister’s Office Ms Indranee Rajah has disputed the widely circulated claim that the Housing and Development Board (HDB) flat owners are merely “tenants” as a result of the 99-year lease, stating that owners actually have a right to sell their HDB flats and pocket the profit made out of their sale.
In response to a query from a member of the Indian community at a People's Association dialogue at The Grassroots' Club in Ang Mo Kio on the National Day Rally, Ms Indranee, who is also Second Minister for Finance and Education, said yesterday: "Everybody who has actually made a profit on the sale of an HDB flat, you cannot say that it's not an asset. Of course it is."
The member raised the question of whether the 99-year HDB lease indicates that the purchaser is indeed, in practice, a long-term tenant, to which Ms Indranee replied:
If you're not the owner, then you don't get to keep the profit either. Owners get to sell because you transfer the right to the property. If you're a tenant, you don't get the right to sell, you just get the right to live in it but you don't have the right to deal with the property.
However, she reminded the participants that HDB flats do have a "life cycle", like any other property, in which the value of a flat would appreciate before beginning to depreciate, particularly as the 99-year lease inches closer to its expiry date.
She reasoned that the inevitable depreciation of HDB flats has become the basis for the introduction of the Voluntary Early Redevelopment Scheme (VERS), which was touched upon by Prime Minister Lee Hsien Loong in his National Day Rally speech this year.
The scheme will grant residents living in certain precincts and residents whose flats are older than 70 years old to cast a vote on whether or not they would like to resell their flats to the Government prior to the expiration of the 99-year lease.
Ms Indranee addressed questions from around 350 participants from various Indian organisations alongside Senior Minister of State for Transport Dr Janil Puthucheary and Sembawang GRC MP Mr Vikram Nair.
In response to questions regarding the Government's Ethnic Integration Policy, Dr Janil said that racial segregation across Singapore would have been more pronounced if race quotas in HDB estates were not put in place, which will place the Indian community in a "far worse" position.
Currently, Indians who sell their flats are only allowed to do so to other Indians, which means that they have no choice but to make do with lower prices due to the very small market despite having purchased the flat at the same rates as buyers of other races, adding that it would be unfair for the HDB to subsidise only Indians to remedy the problem.
Editor's note - Ms Indranee Rajah seems to forget that it is an undisputed fact that HDB "owners" sign a leasing contract from the Housing Development Board and not a title-deed, and no tenants pay rent upfront for 99-years and have to take a loan as a result of the arrangement. So when people "sell" off their lease, they are passing the debt of the 99-lease to another tenant who is willing to take the burden of the pre-paid lease rental.