10 Apr 2018Tapping on the Enhanced Proximity Housing GrantThe new and enhanced Proximity Housing Grant
As part of Budget 2018, Finance Minister Heng Swee Keat announced changes to the Proximity Housing Grant (PHG).
Introduced in August 2015 by Prime Minister Lee Hsien Loong during his National Day Rally speech, the PHG was a one-time disbursement of S$20,000 to families who bought resale flats within a 2km radius of their parents or married child, or S$10,000 to singles who bought resale flats to live in with their parents.
A major difference from previous policies is that every Singaporean would be eligible for this grant regardless of previous housing subsidies, income, and ownership of private property.
From August 2015 to December 2017, about 12,000 households made use of the PHG. This represents about a quarter of all resale flat transactions in the same period, according to the HDB. It also mentioned that 54 per cent of the households would not have qualified for any grants prior to the introduction of the PHG.
The PHG has now been enhanced. Families who buy resale flats to live with their parents or children will receive a grant amount of S$30,000, up from S$20,000. Singles buying resale flats to live in with their parents will be eligible for a S$15,000 grant, up from S$10,000.
Singles who buy flats near their parents will now be eligible for a grant of S$10,000. Also, the government has simplified its criterion of determining what is "near" to "within 4km".Buying a HDB resale flat
Resale flats remain the only way for buyers to pick a flat in a location of choice, and unlike new flats, the eligibility conditions are far less stringent, especially if the buyer is not applying for Central Provident Fund (CPF) housing grants or taking a home loan through the HDB.
With the enhanced PHG, the total grant amount available to an eligible first-time buyer is S$120,000, comprising a S$50,000 Family Grant, S$40,000 Additional CPF Housing Grant and S$30,000 PHG. The PHG has no income requirement.
Effectively, this makes resale flats more affordable for buyers. If you are still deciding between a new flat and resale flat, do consider capitalising on the higher grant amounts!