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More Support for Flat Owners Constrained by the Ethnic Integration Policy
The Minister for National Development, Mr Desmond Lee, announced at MND’s Committee of Supply debate today that HDB will introduce an additional measure to assist flat owners who face genuine difficulties selling their flats at a reasonable price when the Ethnic Integration Policy (EIP) quotas have been reached. In such circumstances, HDB will offer to buy back flats from eligible EIP-constrained flat owners who approach HDB for assistance.
2 The EIP was introduced in 1989 to foster greater social cohesion. Since its inception, it has helped to maintain a diverse ethnic mix across HDB blocks and neighbourhoods, through quotas that apply at the point of flat purchase, as well as at subsequent resale. Most Singaporeans, across all ethnic groups, recognise the importance of the EIP in promoting racial harmony.
3 MND and HDB are aware that a small number of EIP-constrained flat owners may face difficulties selling their flats.
4 To assist these flat owners, HDB has put in place a range of measures over the years. These include giving EIP-constrained flat owners more time to sell their existing flat if they have purchased another one, and waiving the EIP limits in exceptional circumstances to allow flat owners to sell their flat to buyers from any ethnic group.
5 However, it is not possible to waive the limits for every EIP-constrained flat owner. Doing so may lead to a further imbalance in the proportions of the various ethnic groups in specific blocks or neighbourhoods, which would undermine the objective of encouraging more social mixing across different races in our HDB heartlands.
6 MND and HDB have been studying options to provide more support for EIP-constrained flat owners who face difficulties selling their flats at a reasonable price. We have also received thoughtful suggestions from the public, and wish to thank them for their ideas and feedback.
7 To complement the existing assistance measures, HDB will buy back flats from eligible EIP-constrained flat owners who face genuine difficulties selling their flats at a reasonable price. This includes flat owners who bought their flats from HDB and those who purchased their flats on the resale market, regardless of whether the flat was EIP-constrained when it was bought. Flat owners who face such difficulties can approach HDB for assistance.
8 HDB will assess requests for buyback assistance on a case-by-case basis, taking into consideration the specific circumstances of the household, including whether they have:
a. Fulfilled the Minimum Occupation Period and owned the flat for at least 10 years; and
b. Made regular genuine attempts over a continuous period to sell the flat at a reasonable asking price while constrained by one or more EIP limits.
9 EIP-constrained flat owners who do not fulfil these criteria, but who face extenuating circumstances, may seek special consideration from HDB.
10 If a flat owner is assessed to be ineligible for buyback assistance at a specific juncture, HDB will provide direct advice to the flat owner, where appropriate, e.g. inform the flat owner about the transaction prices of comparable flats in the vicinity in order to help him/ her set a reasonable asking price, or advise the flat owner to continue marketing his/ her flat if he/ she has only done so for a short period.
Determining the Buyback Price
11 Once a flat owner is assessed to be eligible for buyback assistance, HDB will appoint a professional licensed valuer to value the subject flat. Such valuers are licensed by the Inland Revenue of Singapore (IRAS) and are members of the Singapore Institute of Surveyors and Valuers (SISV). They will make their assessment based on established valuation principles. HDB will then determine the buyback price and make an offer for the flat at a fair price.
12 Flat owners can take up to three months to decide if they wish to accept HDB’s buyback offer. Those who choose not to do so will not be eligible for buyback assistance for a period of 12 months after the offer lapses. Please see examples of the timeline for buyback assistance in Annex A.
13 The flats bought back by HDB will become part of HDB’s housing stock and will be offered for sale to the public through the Sale of Balance Flats exercises or open booking. As with all flats sold through these modes, HDB will apply a significant subsidy to the assessed market value of the flat to determine the sale price. A household’s eligibility to book the flat will depend on the prevailing ethnic proportions in the block and neighbourhood when they are invited to select a flat.
14 Buyback assistance will be implemented with immediate effect. EIP-constrained flat owners may write to HDB at http://www.hdb.gov.sg/efeedback to seek assistance.