Special CPF housing grant for low-income families

Finance Minister Tharman Shanmugaratnam has announced a Special Central Provident Fund (CPF) Housing Grant aimed at helping low-income families buy their first Built-to-Order (BTO) flat from the Housing Development Board (HDB).

The government will also spend S$10 billion to revive HDB heartlands over the next 10 years, he said.

The move to raise the monthly salary ceiling on contributions to the CPF from S$4,500 to S$5,000 from September 2011 onwards will help prospective buyers to improve their CPF savings, which they could use to help finance home purchases in the longer term, said some analysts.

Property developers were not expecting the government to distribute any goodies for the real estate market in the Budget. “I think developers should be quite pleased there were no further cooling measures announced in the Budget,” said Ong Choon Fah, Head of Consulting & Research (SE Asia) at DTZ.

In his Budget speech, Mr. Tharman said, “We will spend S$10 billion to upgrade homes and rejuvenate estates over the next 10 years. This is a major effort to preserve the value of our HDB flats.”

Under the Home Improvement Programme (HIP), Lift Upgrading Programme (LUP) and Neighbourhood Renewal Programme (NRP), the government will spend up to S$55,000 for each flat. This year alone, about 50,000 flat owners will gain from these schemes.

“In the following five years, from 2012 through 2016, another 300,000 will benefit from these upgrading programmes,” said Mr. Tharman.

About 700,000 residents in East Coast, Hougang and Jurong Lake will also benefit from the new batch of improvements under the Remaking our Heartland initiative, some of whom will also be beneficiaries of HIP and NRP.

“These rejuvenation and upgrading projects will take place in phases across the island,” he added.