hdb income ceiling

HDB Income Ceiling for BTO, EC & Resale Flats 2024

Singapore’s HDB income ceilings are essential for potential homebuyers, determining eligibility for various flat types and impacting market accessibility. 

In 2024, updates aimed at balancing market stability have adjusted income ceilings: S$14,000 for 4-room BTO flats, S$21,000 for extended families, and S$7,000 to S$14,000 for 2-room Flexi flats, depending on the lease length, according to PropertyGuru. 

Additionally, the ceiling for resale Plus flats has been standardized at S$14,000 for both singles and couples, according to Channel News Asia.

This article delves into the income limits, their calculations, and the rationale behind their periodic adjustments, helping buyers navigate their housing options effectively.

What is the HDB Income Ceiling?

The Housing & Development Board (HDB) income ceiling is a regulatory limit set on the gross monthly household income of potential buyers to determine their eligibility for purchasing various types of HDB flats, such as Built-To-Order (BTO) or resale flats. 

This ceiling is part of Singapore’s broader strategy to ensure affordable housing is accessible primarily to those who need financial assistance the most. It’s aimed at maintaining the social goal of public housing, which is to support home ownership among the less affluent segments of the population.

For BTO (Built to Order) flats, the income ceiling is S$7,000 for 2-room flexi (99-year lease) and some 3-room flats. For all other apartments, the income ceiling is S$14,000. For EC (Executive Condominiums), the income ceiling is S$16,000. For Resale Flats, there is no income ceiling.

For Plus flats, a new distinct category of HDB properties in 2024, buyers are required to have a household income that does not exceed S$14,000.

HDB Type Income Ceiling (Average Gross Monthly Household Income)
BTO (Built to Order) S$7,000 for 2-room flexi (99-year lease) and several 3-room flats. S$14,000 for all other apartments.
EC (Executive Condominium) S$16,000
Resale Flat None

 

Minister for National Development Desmond Lee emphasized, “This is to ensure owner occupation for such flats and deter those who intend to ‘flip’ the flats for quick gains or rent them out for long-term yields,” highlighting the policy’s role in preventing speculative behaviors that could undermine the housing market’s stability.

How Income Ceilings Have Changed Over Time

Historically, HDB income ceilings have adjusted to match Singapore’s economic shifts and cost of living, ensuring the public housing system remains responsive. In 2019, the ceiling for families purchasing new HDB flats rose from SS$12,000 to SS$14,000, with the threshold for Executive Condominiums (EC) increasing from SS$14,000 to SS$16,000, reflecting higher costs.

From 2024, a new classification for Build-to-Order (BTO) projects will categorize them as Standard, Plus, and Prime, replacing the old mature and non-mature estate framework. Plus flats, positioned in prime locations with extra subsidies, come with a minimum ten-year occupation period before resale, aimed at reducing speculative buying.

These strategic adjustments in income ceilings and BTO categories underscore a commitment to maintain affordable housing while curbing market distortions, ensuring subsidies effectively assist those in need.

How is HDB’s Monthly Household Income Calculated?

HDB’s income ceiling digits are for combined household income. The government puts your and your partner’s salaries into consideration. Your aggregate income shouldn’t total to an amount more than the income ceiling. If, for instance, you earn S$5,000 per month and your partner earns S$2,000, your combined income is S$7,000.

You need to prepare some income files when you apply for your flat. These documents will be presented to HDB when you arrange to reserve your flat. Your income is only evaluated three months prior to your application if you’re a hired worker.

The HDB will assess your income 6 months before your application if you fall into the ‘other kinds of workers’ category, e.g., part-time or self-employed employee. Your gross monthly wage is an average of the last three months of your remuneration if you’re a salaried employee. This is essential to note if you’re earning a variable wage.

It’s important to note that the HDB income ceiling calculated encompasses the total basic salary as well as other income components such as bonuses, allowances, and your employer’s Central Provident Fund (CPF) contributions, which is Singapore’s public savings scheme.

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Scenarios Based on Income Assessment Methods

Scenario 1: Salaried Employees with Variable Salary

Sara works in a retail job where her monthly earnings vary based on the hours she works. Over the past three months, her earnings were as follows: S$2,000, S$4,000, and S$2,000. Sara’s gross monthly income would be calculated by taking the average of these three amounts: (S$2,000+S$4,000+S$2,000)/3= S$2,666.67

Scenario 2: Salaried Employees with a Fixed Wage

Mark is an IT professional who earns a steady monthly salary. Recently, he took a three-month no-pay leave to travel.

Since Mark’s no-pay leave was less than six months, HDB will consider his last drawn salary before the leave for income assessment purposes. If his leave had extended beyond six months, he would be considered unemployed for the assessment.

Scenario 3: Freelancers or Self-Employed Individuals

Alisha is a freelance graphic designer who has variable income each month. For her HDB application, she needs to report her income from the last six months, which were: S$3,000, S$1,500, S$2,500, S$3,200, S$2,000, and S$3,300.

HDB will calculate Alisha’s income by averaging her earnings over these six months: (S$3,000+S$1,500+S$2,500+S$3,200+S$2,000+S$3,300)/6= S$2,583.33

HDB Income Ceilings in 2024

We shall look at three types of HDB: HDB BTO income ceiling, HDB EC income ceils, and HDB resale flat income ceilings.

HDB BTO 

A BTO is an HDB flat the government launches before constructing it. In other words, it’s a new flat that arrives with a 99-year lease. First-time buyers present their applications at a sales launch occurring approximately twice every year.

HDB makes it easier for them to buy a flat by introducing an enhanced CPF housing grant. You can use this housing grant for resale or new flats. Housing grants are only accessible to selected buyers. Eligible families win too as they stand to gain a family grant.

A BTO flat’s construction will only begin once 65% to 70% of the units have been reserved. It normally takes roughly three to five years before the buyer can relocate into their new living quarters.

Read Also: HBD BTO Down-payment Guide

If you are a single buyer, see the table below:

HDB BTO Type Income Ceiling (Average Gross Monthly Household Income
2-room flexi flat (99-year lease) S$7,000

 

According to the latest HDB press release, eligible first-timer singles can buy 2-room Flexi flats in all locations across Standard, Plus, and Prime flats.

Here are the structure’s income ceilings for couples:

HDB BTO Type Income Ceiling (Average Gross Monthly Household Income
2-room flexi flat (99-year lease) S$7,000
2-room flexi flat (short lease, 15-45 years) S$14,000
3-room flat Either S$7,000 or S$14,000 depending on the project
4-room flat and more S$14,000

 

The income ceilings change when you apply as an extended family or single buyer:

Applying as Income Ceiling
Extended family S$21,000
Single S$7,000
Family/couple S$7,000 for some 3-room flats and 2-room flexi (99-year lease), S$14,000 for all other living quarters

 

The maximum income for purchasing most HDB flats is $14,000, which can extend to $21,000 for families buying larger units or those involving extended families. 

The income ceilings also differ based on the applicant’s family structure:

  • Singles who wish to purchase a flat have a set ceiling depending on the flat type and the specific housing grants they are applying for.
  • Couples or nuclear families generally fall under the standard ceilings mentioned above.
  • Extended families, where multiple generations or additional earners are involved, benefit from a combined ceiling of $21,000 as long as no individual group exceeds $14,000. This arrangement allows larger families to pool their resources while keeping the housing affordable and within reach.

HDB Resale Flat 

A HDB resale flat is a living quarter owned by someone else. It has already had tenants living in it for at least the Minimum Occupation Period (MOP), which is usually five years.

They don’t arrive with a 99-year lease, unlike new BTO flats. Plus, fewer years are left on their lease as they get older.

Due to their general condition, they have no income ceiling. You can sell and buy them on the open market minus restrictions from the HDB.

Overall, the highest overall ceiling reaches up to $21,000 for combined incomes under specific family arrangements, ensuring that public housing caters to a broad spectrum of the population.

Income Ceiling for Executive Condominiums (ECs)

The EC (Executive Condominium) is among the most popular housing structures in Singapore. It comes with better features and prices compared to a private condo and some private properties. It’s ideal for middle-income Singaporeans who aren’t eligible for HDB BTO flats due to the income ceiling restriction.

It’s subsidized by the administration and sold by private developers. Because of this, it’s more affordable than private condominiums. What’s more, it has condo-like features like gyms and swimming pools.

Executive Condominiums’ income ceiling is S$16,000. The bummer is singles can’t purchase an EC on their own. On the plus side, they can join forces with at least three other singles under the Joint Singles Scheme to buy the EC. The same income ceiling of S$16,000 applies across the entire household of singles.

Special Cases and Exceptions

Special Cases and Exceptions

The HDB housing policy includes specific provisions to address unique situations and ensure fairness across various buyer segments. Here are some special cases and exceptions to standard rules:

Plus Flats

Plus flats, a special category within HDB offerings, are designed to be located in prime areas and come with additional subsidies. However, they also include tighter restrictions to ensure they benefit genuine homebuyers.

These flats have a stricter set of rules:

  • Buyers must meet an income ceiling of S$14,000
  • Adhere to a minimum occupation period of 10 years, aimed at discouraging speculative buying and ensuring these homes are used primarily for long-term residence.

HDB Resale Flats: Income and Restrictions

The income ceiling for purchasing resale HDB flats is generally capped at $14,000, aligning with the ceiling for most BTO flats. This ensures that resale flats remain accessible to a broader segment of the population while still maintaining a level of exclusivity and affordability.

Waiting Period for Private Property Owners

A notable restriction for private property owners looking to purchase resale Plus flats is a 30-month waiting period from the time of selling their private property. This cooling-off period is intended to discourage short-term turnover and ensure that HDB flats are prioritized for those who do not own private residential property, supporting the objective of public housing to provide affordable homes primarily for those in need.

What Should I Do if I Exceed The Income Ceiling?

If you and your better half are in your early 30s and earn an amount of, say, S$7,500 each, your total monthly household income is S$15,000. That’s awesome since you can foot your bills and afford decent housing.

On the downside, the HDB deems you unfit to own HDB flats. This is because your earnings are way higher than the set BTO income ceiling. 

It might look like luck isn’t on your side, but the good news is there are equally good options if you’ve exceeded the BTO income ceiling. These alternatives include:

1. Buying an EC

As we saw earlier, Resale ECs are subsidized by HDB and developed and sold by private developers.

They’re good for young couples who are above the income ceiling but still can’t afford private housing. Their reasonable S$16,000 income ceiling makes them a favourite among most Singaporeans.

There are several perks of purchasing an Executive Condominium:

  • You get cool condo-like features at a fair price.
  • They were designed with the middle class in mind.
  • They’re 10% to 15% cheaper than private condominiums.
  • They can fetch similar prices to private condos once they reach the 5- and 10- year marks. This means a worthwhile profit if you purchased the condo at a subsidized cost.
  • They offer larger spaces than condominiums.

One quick tip before we move on: Pay close attention to the EC’s 5- and 10-year marks. The structures are HDB’s properties for the first ten years. It helps to follow the five-year MOP law. 

2. Purchase a Private Condominium

The name has a nice little rich ring to it. That’s because a private condo is the most expensive (but worthwhile) option you have. A budget of S$700,000 can easily get you this luxurious living structure.

So which benefits do you gain from living in a private condo?

  • Ample security and privacy
  • Zero income ceiling
  • Access to facilities like a BBQ pit and gym

Just ensure the private condo is in an area you’re comfortable with, matches your expectations in terms of room, has reliable access to public transport, and has the above facilities and more, and you’ll be all set to enjoy your living experience.

3. Buy an HDB Resale Flat

HDB resale flats may have had tenants already, but they’re pleasantly affordable and well-maintained- in most cases. You’re eligible for a proximity housing grant and CPF housing grants if you buy this flat, as long as you meet the requirements.

Plus, they also don’t have an income ceiling. There are many other advantages of living in these structures. They include:

  • You don’t have to wait several years for the living quarter to be built. You can move in as early as two months!
  • You can pick from larger flat types such as Design Build and Sell Scheme (DBSS) flats, jumbo flats, and maisonettes.
  • You can afford premium resale flats in countless popular mature estates and locations.

Make sure you settle for properly-maintained flats to escape renovation costs and any other charges that might pop up. It also helps to know the monthly mortgage payments so you can prepare financially in advance.

Read Also: How to Buy a Home with HDB Bridging Loan

Conclusion

Understanding the HDB income ceiling is crucial for prospective homebuyers in Singapore. Whether you are a single, couple, or extended family, being aware of these limits ensures that you can plan accordingly and explore the appropriate housing options available under HDB regulations.

Key Takeaways:

  • Ceilings and guidelines are designed to maintain affordability and prevent speculative buying, aligning with Singapore’s vision of accessible public housing for its citizens.
  • Income ceilings are now S$14,000 for 4-room BTO flats, S$21,000 for extended families, and S$7,000 to S$14,000 for 2-room Flexi flats, ensuring public housing remains accessible.
  • The income ceiling for resale Plus flats is set at S$14,000 for singles and couples, helping maintain affordability and discouraging speculative buying.

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