Minister for National Development Lawrence Wong said claims that HDB flat buyers do not own their flats and are renting them is ‘factually and legally wrong’; there is also no basis to such a claim,.
The Minister was speaking at the HDB’s Peak Forum for building professionals on Tuesday (4 Sep).
He said that all buyers of leasehold properties, private or public, enjoy ownership rights over their properties during the period of lease. They can sell their properties and benefit from renting it out or any other upsides.
“Since the beginning of the Government land sales programme in 1967, all sites for private residential land have been sold on leases not more than 99 years,” he emphasized.
He reasoned that “We have limited space and we need to recycle land to create housing for future generations.”
Mr Wong said that the Government welcomes views to improve the policies concerning the subject but he cautioned that the debates must be based on facts, not misinformation and half-truths,
“The work of strengthening the institution of public housing and home ownership cannot be done by the Government alone,” he said, “It requires close partnership with Singaporeans.”
Mr Wong also announced the launch of Town Design Guides to strengthen identities of HDB towns during his visit to HDB Hub.
Wikipedia define ‘leasehold estate’ as follows:
“A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a leasehold estate is typically considered personal property.
Leasehold is a form of land tenure or property tenure where one party buys the right to occupy land or a building for a given length of time. As lease is a legal estate, leasehold estate can be bought and sold on the open market. A leasehold thus differs from a freehold or fee simple where the ownership of a property is purchased outright and thereafter held for an indeterminate length of time, and also differs from a tenancy where a property is let (rented) on a periodic basis such as weekly or monthly.
Until the end of the lease period (often measured in decades or centuries; a 99-year lease is quite common) the leaseholder has the right to remain in occupation as an assured tenant paying an agreed rent to the owner. Terms of the agreement are contained in a lease, which has elements of contract and property law intertwined.
The term estate for years may occasionally be used. This refers to a leasehold estate for any specific period of time (the word “years” is misleading.) An estate for years is not automatically renewed.
Colloquially, “lease” and “leasing” are often a formalization of a longer, specific period as compared with a “rental” that created a tenancy at will, terminable or renewable at the end of a short period.”
Many readers of the Channel NewsAsia report on this subject, posted on its Facebook platform, reacted and wrote comments.
Many citizens who are concerned about public housing are still confused and do not understand the term of leasehold, as can be seen in their comments:
Edwin Chua wrote: “I have little objection with the current system. But I’m calling it as I see it. Wordplay isn’t gonna change the fact that owning a property means very different things everywhere else in the world.”
Victor Ho wrote:
“It is as good as you pay a full price to rent the house for 99 years and the rental
Agreement could stipulate your tenant right that you as a ‘tenant’ can sub let or sell the house within the 99 years rental period, whoever the last ‘tenant’ will have to surrender the house back to HDB ..the Govt upon the expiry 99 year period..
So, you are clearly the tenant not the owner, as you will never be allowed to own the house forever…..
If they have insisted that you are the owner and not tenant, then you will have to take it that you can exercise your owner right within the 99 year rental period only, after that period, even as an owner, you have no more owner right and will have to return your hose to HDB..
Clarence Chee wrote: “Leasehold property owners should reserve the rights to rent out the unit without any prior consent from HDB and not be subjected to compulsory acquisition by HDB rules. They can go on flipping prata. U call a spade a spade.”
However, some readers agreed to the Government’s policy:
Clayton Tan wrote:
“Have you all take a step back and thoroughly look at the whole thing?
1. Let’s say we bought a 5 room BTO flat $200k at Sengkang, 10 years ago. Now we sell the flat at min. $350k. The accrued interest you would have earned in your CPF will be $6250 based on 2.5% per annum. So 10years is $62500.
2. $350000(selling price)-$200000(buying price from HDB)-$62500(10yrs accrued interest)-$7000(agent commission)-$3000(legal fee)=$77500(cash profit). You still get a profit, No?
3. Ok. Let’s say no profit. For 10 years you have been staying in a 5room flat. You think it’s free. Based on rental market, a 5room flat rental 10years ago till today is about average $2k. You will need to pay $2k x 12mths x 10 years = $240000. Have all my fellow Singaporeans thought of this? You think by buying a flat and paying all the mortgages you forgot that if you are not buying you still have to pay rental. No?
4. Lastly, people buying resale flat at high prices with lesser years in their lease only have themselves to blame. Did the government force you to pay the obscene amount. No? It’s their choice cause they wanted to have all the amenities and convenience. When TPY, Bukit Merah, Bishan were bulit 20-40 years ago these estate was also sold at low prices when they were 1st bought direct from HDB. It’s the buyer who willing wanted to pay $800k-$1million for a 20-40years flat. Why blame #HDB?
5. I agree that most government policies is not popular but I don’t really think that we should blame them on the housing policy. Can tell me any country in the world have such a policies for good public housing. Give them credit where credit is due.”
Leong Hui Wen wrote:
“UK has the same system too. What it sorta means is, you own the property on ‘rented’ land. Which is why it is leasehold – because the land don’t belong to you.
Thus whatever you do to the building you need to seek approval from landowner. Also, don’t forget you don’t own the building either. The building is owned by HDB. You only own the unit which you bought. That space inside the building. That is why you need to seek approval from HDB if you wanna do renovations. This much is obvious.”
Stacey Stacey wrote: “What people own is the tenancy; they are the owner of the lease i.e leaseholder/lease-owner. They do not own the flat – they merely own the lease due to the time limit tied to their possession of the flat.”
Lai Yin Lee wrote: “Basically the property is yours for good if it is freehold. If one buys a HDB or lease hold private property, when time is up, you have to return it.”
Other citizens have questions and objections:
Jacky Lim wrote: “Question : If I fully paid a HDB can I mortgage it to a bank since I have the ownership rite as stated?”
Yucai Wong wrote: “May I ask if you are leasing from gov .. why then can one sell the HDB? Private property too have leasehold .. likewise this is the same law applies to many countries.”
Darren See Same wrote: “Understanding… just don’t get it why still need to pay property tax since we are not owners!!”
Darius Chong wrote: “Darren See, also the monthly S&CC maintenance fee to the town council paid by the HDB residents since the residents don’t own the flat.”
Francis Ng wrote: “Can we mortgage fully paid HDB house for a personal loan? If yes, then we are owners right? If no, then we are not right?”
A reader pointed to the wrong understanding relating to SERS (Selective En bloc Redevelopment Scheme):
Ryan Lee wrote:
“Everyone knows that HDB flats is for 99 years, and everyone believed that their flat will be selected for SERs before the lease is up until you come out and burst their bubbles by saying don’t expect the government to bail them out as not all HDB flats are SERs worthy.
There are middle age and young couples out there who bought 30+ years old resale flats, now that the bubble has been burst who dares to buy their old resale flats and you are asking the people not to panic? ?”
And another citizen stated that owners of HDB shouldn’t have too much restrictions on when can sell, who to rent, just like any private properties, but Adeline Sim explained the reasons for the restrictions:
Sg White wrote: “Owner of HDB shouldn’t has too much restrictions on when can sell, who to rent just like any private properties. Why are we, the HDB lessee, have to abide by so many restriction?”
Adeline Sim wrote:
“There’s good reason for the restriction. HDB flats are being sold at a subsidised rate. By subsidised I don’t mean cheap, I mean cheaper than private property in the same area. The purpose of MOP is so that HDB buyers, especially BTO buyers, don’t get to “flip” their property ie buy and sell quickly for a profit. This is abusing the system and defeats the purpose of HDB flats. It also drives property prices up. HDB flats should not be purchased so that you can earn a quick buck.
Government knows they cannot restrict private property transactions so they impose seller stamp duty instead – sell too quickly and u pay extra tax. This is indirectly imposing an MOP on private property owners, and you’ll be surprised to know that most people will wait until the window is over before selling. This doesn’t affect HDB owners because the 5 year MOP means by the time we can sell, this extra stamp duty won’t apply to us.
Let’s try to understand the rationale and the bigger picture behind the regulations instead of only focusing on how it affects us personally. If we can understand the logic or at least try to understand, I’m sure we can see how it helps us as a nation in the Long run.”
James B Wright-Brown explained the definition of a leasehold:
James B Wright-Brown wrote:
“Definition: A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a Leasehold Estate Is Typically Considered Personal Property.
Leasehold is a form of land tenure or property tenure where one party buys the right to occupy land or a building for a given length of time. As lease is a legal estate, leasehold estate can be bought and sold on the open market. A leasehold thus differs from a freehold or fee simple where the ownership of a property is purchased outright and thereafter held for an indeterminate length of time, and also differs from a tenancy where a property is let (rented) on a periodic basis such as weekly or monthly.
You only own a leasehold property for a fixed period of time. You’ll have a legal agreement with the landlord (sometimes known as the ‘freeholder’) called a ‘lease’. This tells you how many years you’ll own the property. Ownership of the property returns to the landlord when the lease comes to an end.
Mary Liang replied to James B Wright-Brown and wrote that a leasehold is an ownership to the rights (to dwell):
“Yes. In true definition, a leasehold is an ownership. The ownership to the rights, that is. Individuals struggle to understand what they bought and thus the anger and confusion.”
“James B Wright-Brown I have already made my purchase and am aware of the rights assigned to me. No intention to contest that.”
And James B Wright-Brown answered and gave advice for any person who has the intention of buying a property to consult his/her solicitor and get the proper advice :
“Mary Liang at the end of the day one’s confusion state of mind is not any problem with any property developer. My suggestion is for any person who has the intention of buying a property to consult his/her solicitor and get the proper advice. One minute we moan about the government is too paternalistic and the next we demand to be spoon fed! Get a grip!”
“Good for you Mary Liang. Once again for those who don’t get the point, please please go see a solicitor and, let them explain and be advised.”