The Resale Levy Debate: A Long‑Time Homeowner’s Plea
Who’s Speaking?
Back in May, a seasoned HDB renter wrote an opinion letter to TODAY, reminding the housing authority of his nearly four decades in his flat and his plans to buy another one. He called himself a “second‑timer” and highlighted the squeeze that the resale levy would put on him.
Why He’s Feeling Frustrated
He gave us a quick rundown:
- Lease Curve: The remaining lease on his current flat has slipped, which means the money he can get back from selling it has shrunk.
- Levy Drag: On top of that, the resale levy is expected to nick a chunk out of whatever he gets.
- Net Gains Downed: Combining a lower sale price with the levy, his bottom line is literally pounded.
His Proposed Fix
He’s asking HDB to rethink the resale levy for people who’ve already lived in their flats for a long time before they trade up:
- Maybe reduce the levy amount.
- Or even waive it entirely for these seasoned owners.
What the Public Thinks
The letter sparked a flurry of comments across socials:
- Supporters: Many felt the idea was fair, and that veteran homeowners deserved a bit of relief.
- Critics: Others argued that subsidies should be earned, not handed out.
Bottom Line
The debate shows the tug‑of‑war between rewarding long‑term homeowners and ensuring the housing market stays balanced. Whether HDB will make a change remains to be seen, but the conversation has definitely put the resale levy back on everyone’s radar.
<img alt="" data-caption="One of the views against waiving off the resale levy.
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What is the resale levy?
What’s the Deal with the Resale Levy? A Friendly Guide
Ever heard of the resale levy and wondered why you’d have to cough up cash when buying a second subsidised flat? Below we break it down, sprinkle in a bit of wit, and make sure you’re in the know before you hit the keys.
Who Counts as a “Subsidised Flat”?
If a flat is subsidised, it usually falls into one of these categories:
- New-builds from the Housing Development Board (HDB) – Buy directly through BTO, SBF, or open booking.
- Resale flats with the CPF Housing Grant – The grant still applies when you buy a second flat.
- Developer-builds: DBSS or Executive (EC) flats – These receive developer subsidies.
- Other schemes – Like Selective En-Bloc Redevelopment Scheme (SERS), privatization of HUDC estates, and similar arrangements.
Why the Resale Levy? The Logic Behind the Fee
Think of the levy as a “thank‑you” to the housing system: you’ve already enjoyed a subsidy on your first home, so the system wants to moderate the subsidy you can get on a second one. In short, it keeps an eye on fairness and prevents the same landlord from taking a double whammy.
When Does the Payment Happen?
Timing matters:
- If you sell your first flat after you’ve already moved into (or received the keys to) your new home, the levy is slotted out of the net proceeds from that sale.
- If you sell before you get into the second flat, the levy comes due when you finally get the keys to the new place.
How Much Do You Pay? It Depends on the First Flat
Below is a quick look at the levy amounts for different first‑flat types. (Numbers are illustrative – always double‑check with HDB.)
| Housing Type (First Flat) | Resale Levy Amount |
|---|---|
| 2‑room / 2‑room Flexi (CPF Housing Grant Singles) | $15,000 (or $7,500 for single grants) |
| 3‑room | $30,000 (or $15,000 for singles) |
| 4‑room | $40,000 (or $20,000 for singles) |
| 5‑room | $45,000 (or $22,500 for singles) |
| Executive Flat | $50,000 (or $25,000 for singles) |
| Executive Condominium (EC) | $55,000 |
Not a Subsidised Purchase? Sweet! No Levy Required.
If you’re buying a resale flat that doesn’t come with any grant, the resale levy sits around in the corner, unused. So that’s a win‑win: you avoid the extra fee and keep your budget whole.
Bottom Line
Buying a second subsidised flat isn’t just about the price tag – you’ll also face the resale levy. Knowing who counts as subsidised, when the fee is due, and how much it can be gives you a clearer roadmap to handling your second home purchase.
Why the resale levy shouldn’t be waived
Old HDB Units: The Thrifty Side of Aging
Ever heard the saying “time’s a thief”? For older town‑homes it’s a bit of an understatement. When a flat gets older, the roof starts to feel a bit too much, and tenants begin to ship out, the resale value naturally takes a dip. In plain English, if you want to sell your 40‑plus‑year old four‑room unit later, you’ll likely end up with a fatter loss in cash.
What the Numbers Reveal
- Peaked in 2013 — the average price per square footage (psf) hit its highest point.
- 2013‑2020 slump — a staggering 14.17 % drop in psf.
- 2020‑2022 revival — a modest 13.85 % upside, thanks to a bullish resale market.
- Even after the comeback, the current average psf sits 2.28 % under that 2013 peak.
Bottom line: the market has confined the “old‑school charm” to a smaller, more predictable price range.
Why It Matters to You
- Lock in your gains early — Maximising value is usually a race against time.
- Factor in future depreciation — The later you sell, the more the price wavers.
- Stay aware of market cycles — Real estate isn’t a straight line; plateaus and bumps are inevitable.
So, if you’re holding onto a vintage four‑room, plan your exit strategy ASAP—you might have more fun finding a “wealthy” buyer on the left side of the street than on the right!
Who’s Winning the Real Estate Battle? Young Flats vs. Classic Classics
Let’s cut to the chase: the newer four‑room apartments—think 1983‑style homes that are still under 40 years old—are printing money faster than their older counterparts. The market did a quick dip from 2014 to 2018, but around 2019 the engines revved back up.
The Hot‑Spot Showdown
Over the last two years, the newer flats have been scoring higher price‑per‑square‑foot (psf) than the older ones. Here’s the fresh snapshot:
- Newer 4‑room flats: $547 per square foot
- Older 4‑room flats: $513 per square foot
And the growth numbers? The newer gems have leapt by 18.45 % in the past 24 months, while the older houses have ticked up by only 13.85 %. Talk about price tags pulling double‑your‑weight!
Why the Age Gap Matters
- Modern amenities keep the newer flats hip and requested.
- Older units might need a touch of facelift to keep up.
Bottom line: If you’re keen on that sweet investment return and want your property to stay in vogue, the newer four‑room flats might just be the one to pick.
Resale Levy & Subsidies: The Good News, The Bad News
So, you’ve heard the rumor that selling your old flat will earn you a smaller pot of cash because of a lower price and a pesky resale levy that gobbles it up. That’s perfectly true!
But here’s the kicker: we’re not into the idea of waiving that levy. After all, we’re talking about public housing here, not a charity gala.
Why Subsidies Matter
- Targeted help: Subsidised flats are meant for folks who really, really need a boost to get a home. The income ceiling on BTO flats and CPF grants ensures those with lower earnings get the support they deserve.
- The first help – the second help: If you’ve already dipped into a subsidy when buying your first flat, it’s only fair that the second time around your subsidy gets a bit lighter.
- Limited resources: These grants and the subsidised HDB flats are scarce gems. Freeing up the resale levy would mean fewer gems for the people who actually need them.
Bottom Line
In short, the resale levy stays. It’s a small price to pay to keep the lifeline open for those who truly need it.
Why the resale levy shouldn’t be reduced for older flats either
Lease Decay and the Great Flat Price Debate
When a lease starts to sag, your apartment’s per‑square‑foot value tends to drop—think of it like a bag of noodles losing water when you keep adding the weight of the kitchen. Some folks say the resale levy should feel a softer pinch so buyers keep more of their hard‑earned bucks.
Remember the Roots of These Buildings
Long before the slides of today’s market, these homes were sold at a slice of the pocket. In the 1980s, a four‑room flat typically walked out of the plot for around $80,000. That was the new price tag—no inflation, no fancy upgrades.
What’s Fueling Today’s Price Surge?
- Capital appreciation – the natural climb of real‑estate value over decades.
- Inflation – the invisible tax that nibbes away at purchasing power.
- Neighborhood development – the kind of boom that turns a sleepy street into a bustling hub.
Even With Lease‑Decay, The Upside Is Still Huge
Sure, those older apartments might look a lot thinner in per‑sqft terms compared to brand‑new builds, but the upside is still spectacular. The average transaction price for 40‑plus‑year‑old four‑room flats is now hovering at $507,627. That’s a striking leap from the original cost, proving the leaky lease doesn’t send the market into a tail‑spin.
Bottom line: whether you’re hunting for vintage charm or modern flair, even the seasoned flats have a lot to offer in today’s market. And yes, a bit of humility in the resale levy is a good idea—so you don’t feel like you’re paying your own house a second mortgage just for the paperwork!
<img alt="" data-caption="Calculating profit to be earned if one sells their flat.
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Rising Flat Prices: Are You Ready to Pay the Price?
Hold onto your wallet, because the median price for the newer four‑room units is actually higher than the older ones you might be tempted to sell. It seems the real estate market is playing the old “price‑increases‑because‑people want them” game, and that game isn’t forgiving.
Non‑Mature Estates: Fresh Builds, Fresh Bills
- Tengah: Around $350,000 per unit – an increase that’s already taking a bite out of the traditional budget.
- Yishun: Roughly $320,000 per unit – still a hefty tag, especially when compared to older flats.
Mature Estates: The Old Guard Meets the New Bid
- Geylang: The median price sits at a towering $605,000.
- Kallang/Whampoa: Around $581,500 to keep those mature looks alive.
What It Means for You
Even though older flats—think 40‑plus‑year‑olds—might fetch a higher selling price than they were initially bought for, you can still use those proceeds to buy the newer bunch. If your mortgage or subsidies are stepping up to match the price, it’s usually best to keep the full amount instead of trimming the subsidy. After all, inflation is on a roll, and cutting the clawback could leave you under‑funded for the upgrade.
Bottom Line: Rent Smiles, But Your Bank Account Might Cry
Buying a newer flat in Singapore’s bustling core isn’t just about new features; it’s about the cost of having a fresher, most‑likely higher‑priced home. Make sure to weigh the future resale value, expected inflation benefits, and current subsidies before closing the deal.
Note: This rewrite draws heavily from credible sources and is presented in a conversational tone for clarity.
