Silver Housing Bonus: How to Monetise Your Flat for Retirement

Silver Housing Bonus helps senior households to monetise their HDB flat to support their retirement

Whether you’re a retiree who decided to rightsize from your current HDB flat to a smaller flat, or want to sell your current home for a smaller HDB flat to accommodate your retirement years, the good news is that the government will incentivise you with up to $30,000 in cash bonus via the Silver Housing Bonus, or SHB for short.

In this article, we’ll take a look at the Silver Housing Bonus and how you can benefit from it.

 

What is the Silver Housing Bonus?

The Silver Housing Bonus (SHB) is one of the many ways the HDB helps elderly households to support themselves during their retirement years. 

Basically, if you’re a senior Singapore Citizen looking to sell your current HDB flat or private home (regardless of the type) in order to buy another three-room or smaller flat, HDB will provide you with a cash bonus of up to $30,000. 

However, while the SHB is an excellent way to help you supplement your retirement, it comes with a catch.

 

How does the Silver Housing Bonus work?

To qualify for the SHB, you’ll need to top-up $60,000 from your *net sale proceeds into your CPF Retirement Account (RA) and join CPF LIFE. If the top-up amount is lesser than $60,000, then the cash bonus will be pro-rated on a 1:2 ratio. In other words, you’ll get $1 in cash bonus for every $2 top-up made to your CPF Retirement Account. 

 

*Net sale proceeds = sale price of current home - outstanding loan - purchase price of new flat - resale levy - up to $15,000 of auxiliary costs

 

Here are some examples:

Example A

Mr and Mrs A are selling their five-room HDB flat in Yishun for $470,000 to buy a new two-room flexi Build-to-Order (BTO) flat in Sembawang for $141,000. They have an outstanding loan of $100,000 and since they are also buying a second subsidised flat, they would have to pay a resale levy of $45,000. 

If they top-up $60,000 from their net sale proceeds into their CPF Retirement Account, they will enjoy $30,000 in cash bonus. 

Selling price of the property 

$470,000

Outstanding loan on existing property

- $100,000

Purchase price of next property 

- $141,000

Resale levy

- $45,000

Sale proceeds

$184,000

Top-up amount

$60,000

Cash bonus from SHB

$30,000

 

Example B:

Mr and Mrs B are selling their four-room resale flat in Choa Chu Kang for $336,000 to buy a three-room resale flat in Bedok for $301,000. They don’t have any outstanding loan but only make $35,000 from the sale proceeds. Say if they top-up all $35,000 into their CPF Retirement Account, the cash bonus that they will receive from SHB is $17,500 (17,500/2).

Selling price of the property 

$336,000

Outstanding loan on existing property

$0

Purchase price of next property

- $301,000

Sale proceeds

$35,000

Top-up amount required

$35,000

Cash bonus

$17,500

 

PropertyGuru Tip

If you plan to buy a three-room or smaller resale flat to live near your children, you can also enjoy a Proximity Housing Grant (PHG) of up to $20,000.

 

Who’s eligible for the Silver Housing Bonus?

To be eligible for SHB, you’ll need to meet a few criteria, with the important ones being:

#1. Age and citizenship

At least one of the owner is a Singapore Citizen who is 55 years old or above.

#2. Income

Gross monthly income is $14,000 or less.

#3. Purchasing property

Property that you are buying has to be three-room or smaller flat from HDB or from the open market. The property also has to be cheaper than your current home.

#4. Existing property

There’s no requirement on the type of property that you own, but you’ll need to meet HDB’s Minimum Occupation Period (MOP). You also must not own a second property. 

To view the full criteria of the SHB, check out HDB’s portal

 

Silver Housing Bonus vs Lease Buyback Scheme: What's the difference?

While they are both monetisation options for senior households, they are designed differently.

As mentioned, the SHB provides up to $30,000 to retirees who prefer to sell their existing flat to get a smaller flat. However, you would need to top-up $60,000 from the net sale proceeds into your CPF Retirement Account, which will then be used to purchase CPF LIFE to provide you with a steady stream of monthly cash payouts.

Meanwhile, the Lease Buyback Scheme (LBS) is designed for those who prefer to monetise their existing flat by selling the remaining lease to the HDB (at least 20 years of lease to sell).

In doing so, you can continue living in your HDB flat and receive the money from the sale as well as the cash bonus (up to $30,000). Do note that you need to retain enough lease to cover the youngest buyer to at least 95 years old. 

Like the SHB however, the money you receive from the sale will first need to go to your CPF Retirement Account to the Full Retirement Sum (single applicant), or Basic Retirement Sum (two or more owners) and receive the excess in cash. Then, you will receive the LBS bonus based on your flat type.

Who is it for
Seniors aged 55 years old and above who want to sell their existing flat for a three-room or smaller flat
Seniors aged 65 and above who want to sell the remaining lease of their flat, with at least 20 years left
Bonus amount
$30,000 or pro-rated based on a pro-rated on 1:2 ratio
Remaining lease + type of flat ($30,000, $15,000 and $7,500 for three-, four- and five-room flats respectively)
Top-up amount (CPF RA)
$60,000
Based on the Full Retirement Sum of that year (one buyer); or the Basic Retirement Sum of that year (more than two buyers)

Find out more about the Lease Buyback Scheme here.

 

Other criteria you should be aware of before taking the SUB

#1. The monies that you use to top-up your CPF Retirement Account will be used to purchase CPF LIFE plan.

Which means that you will receive higher lifelong payouts every month.

#2. You won’t be eligible for SHB if you applied for the Lease Buyback Scheme (LBS)

While they are both monetisation options, both are designed differently and serve a different purpose. SHB is for seniors who prefer to sell their current home and buy a three-room or smaller flat.

Meanwhile, LBS is for seniors who prefer to live in their existing flat and sell the remaining lease to the HDB. So choose wisely!

#3. You can’t use your savings to top-up your net sale proceeds

You can only top-up via the sale of your proceeds. So, if the net sale proceeds is less than $60,000, you can't use your savings to top-up the balance. Sorry folks.

Recommended article: The four ways to monetise your HDB flat for retirement

Want to buy a resale flat?  

Checkout PropertyGuru available three-room or smaller flats for sale in Singapore. Filter your search based on price, floor level, year of construction, and more. Find a home now.

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