Resale Levy Ensures Fair Subsidy Allocation
Singapore citizens enjoy a significant housing subsidy when they buy a new flat from HDB or a resale flat from the open market with a CPF housing grant.
While eligible second-timers can still purchase a flat directly from HDB, they will have to pay a resale levy. The resale levy is intended to reduce the subsidy that a buyer receives on their second subsidised HDB flat and ensures a fair distribution of subsidies between first-timers and second-timers. In short, more subsidies would be prioritised to the first-timer.
If you do not buy a second subsidised flat from HDB, there is no need to pay a resale levy.
Under the current resale levy policy in place since Mar 2006, second-timers pay the resale levy when they sell their first subsidised flat, or when they collect the keys to their second subsidised flat, whichever happens later.
The resale levy is a fixed sum which depends on the flat type of their first subsidised flat. No interest is charged on the levy. You can find out more about the resale levy on HDB InfoWEB.
For second-timers who had sold their first HDB flat before Mar 2006, the prevailing policy then included a compound interest of 5% per annum if they chose to defer the payment of the levy until they buy and collect keys to their second subsidised flat.
Some of them may have sold their flat some time ago and are now looking to buy a second flat from HDB. They would have accumulated interest on their resale levy over the years. If they are unable to pay the resale levy in cash, HDB will see how best to help them, taking into consideration their family circumstances. For instance, the resale levy may be incorporated into the purchase price of the second subsidised flat, so that they can spread out the payments.
Since 2015, HDB has waived the accrued interest on the resale levy payable by elderly second-timers who wish to right-size to a 2-room Flexi flat. For those buying a short-lease 2-room Flexi flat, the resale levy will be capped and adjusted to consider the shorter lease. This means that the maximum resale levy payable on a 2-room Flexi flat with a 45-year lease is $18,000, which is much lower than what the normal resale levy would be.