Image: The Straits Times
How do CPF housing grants work? Do I have to pay back the money if I sell my flat?
The Central Provident Fund (CPF) Housing Grant for families, also known as the Family Grant, is for eligible first-time house-hunters with an income ceiling of $12,000 buying resale flats or executive condominiums directly from the property developer.
Previously capped at $30,000, the grant was recently raised to $50,000 for those buying four-room or smaller resale flats, and to $40,000 for those buying five-room or larger resale flats.
There is also a Proximity Housing Grant (PHG) of $20,000 for families buying resale flats to live with or near their parents/married children. This is not to be confused with the Additional CPF Housing Grant (AHG) or the Special CPF Housing Grant (SHG).
The AHG gives up to $40,000 to first-timers earning not more than $5,000 for a new, balance or resale flat; the SHG gives up to $40,000 to first-timers buying four-room or smaller Build-To-Order or balance flats in non-mature estates if they earn no more than $8,500.
First-timer families buying resale HDB flats can enjoy up to $110,000 of housing grants, comprising the CPF Housing Grant ($50,000), AHG (up to $40,000) and PHG ($20,000).
If you are eligible for these grants, the money is credited directly into your CPF Ordinary Account – no cash is disbursed.
This money can then be used to offset the purchase price of the flat, or reduce the amount of mortgage loan required.
If you are taking a bank loan, the grants cannot be used for the minimum cash downpayment, which is 5 per cent or 10 per cent of the flat's valuation price or the purchase price, whichever is lower. For HDB loans, however, there is no minimum cash requirement.
When you sell your flat, all of the CPF monies used to purchase it, including the grants, will be returned to your CPF Ordinary Account. This includes the amount of interest you would have accrued if you had not withdrawn the money to purchase your flat. The money does not go back to the Government.
Take note of these housing grants:
$110k: The maximum amount of government grants a first-timer family buying a resale flat can enjoy.
$50K: The new cap for the CPF Housing Grant for eligible families, up from $30,000 previously.
Adapted from The Straits Times.