Everyone deserves proper housing. This is what the Singaporean government tries to uphold by setting an earning cap on HDB flats. At least 80% of Singaporeans live in HDB flats. Therefore, it’s only fair that only those who really need the living quarters can buy them.
This is where HDB income ceilings come in. The HDB put the income ceiling in place to ensure that the average Singaporeans who can’t afford luxurious housing are the ones who benefit from the flats.
Given this, one of the most natural questions when you’re thinking of applying for an HDB flat is: are you eligible for an HDB flat? Have you breached the income ceiling?
Read Also: How to Buy a Home with HDB Bridging Loan and Best Home Loan in Singapore.
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.
HDB will use the official amount on your payslip, i.e., what you earned before CPF deductions, employer’s CPF contributions not included. It doesn’t comprise income gained and bonuses from overtime work. However, it does include variable and fixed allowances that you frequently get.
Assuming you earned S$2,500 before your BTO application, S$3,000 before that, and S$3,500 the month before that. Your gross monthly income would amount to (S$2,500 + S$3,000 + S$3,500)/3= S$3,000.
HDB will utilize your last-drawn pay when calculating your income if you’re a salaried worker with a fixed salary. It’ll use your last-drawn payment if you take no pay leave for half a year or less. And, it’ll consider you jobless if your no-pay vacation extends to six months or more.
HDB Income Ceilings in 2023
We shall look at three types of HDB: HDB BTO income ceiling, HDB EC income ceils, and HDB resale flat income ceilings.
At a glance:
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)
1. 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 2023
With that said, 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|
|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|
2. HDB EC
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.
3. 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.
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.
1. Are the Income Ceilings Fair?
Some argue that the BTO income ceiling isn’t fair, saying it’s pretty high, with it currently being S$14,000 for couples purchasing a BTO flat. The number might shoot to S$21,000 for the extended family income ceiling if you apply for a 3Gen living quarter.
Most Singaporeans fall below this HDB flat income ceiling, defeating its purpose in the first place. The government should consider lowering the cap so those who truly deserve them can access it.
It can achieve this by keeping track of Singaporeans’ average income and mapping out a reasonable ceiling according to the resulting figures.
2. What is HDB?
The Housing and Development Board (HDB), or Housing Board, is a public housing authority in Singapore. It was established in 1960 to solve Singapore’s housing issue. It also seeks to provide cost-friendly, good, quality public subsidised housing for its citizens. Its BTO flats are subsidised and meant for deserving citizens.
3. Can I Buy an HDB Flat if I’m Single?
Yes, you can buy BTO flats. You just have to meet several requirements, the first being that you must be a Singaporean citizen at least 35 years old. Another qualification requirement is the Singapore Permanent Resident (SPR) and Ethnic Integration Policy (EIP) quota that basically maintains and motivates social unity.
4. How Else Can I Determine if I’m Eligible to Buy an HDB Flat Aside From My Income and the Income Ceiling?
There are several requirements you should meet if you’ve considered subsidised housing:
- You must be at least 21 years old– the Fiance/Fiancee scheme allows applicants below 21 and above 18 to register for a BTO with written consent from their guardians or parents. You must present a Special Marriage License from the Ministry of Social and Family Development if you’re below 18.
- Asset ownership– you must have only bought at least one EC, DBBS, or HDB in the past. This is because Singapore citizens only qualify for several subsidized living quarters from the administration. You’re not eligible if you possess other residential property overseas or locally.
- Citizenship- at least one of the applicants has to be a Singapore citizen, while the other should be a Permanent Resident or Singapore National. This rule also applies under the Non-Citizen Spouse Scheme- the main applicant has to be a Singaporean citizen.
How do I Apply for an HDB BTO?
Applying for an HDB BTO is a fairly simple procedure. Here are the steps you should take:
1. Check if You Qualify to Purchase the Flat
Have you attained the accepted age? Are you a Singaporean citizen? Etc.
2. Check Out the BTO Living Quarter Choices 6 Months in Advance
HDB began announcing the BTO site launches 6 months earlier, from May 2019 onwards. Having a look allows you to prepare and decide which location works best for you and your bae. It also helps you know which other flats are available and discover the best flat type for you.
You’ll have to fill in details such as your proof of status, occupation, and monthly household income, plus your particulars. You’ll also have to pick a priority scheme and part with S$10 to pay application charges. Hurry, you’ll have only a week to apply after the launch! Ensure you receive financial tips so you can get a room flat worth your money.
Note: You can’t back out once you apply for any type of HDB flat. You’ll incur some charges (depending on the application phase you were in before thinking twice). And you won’t be allowed to apply for other new HDB flats.
4. Check Out Your Ballot’s Results and Receive Your Queue Number
HDB releases the outcomes 3 weeks after the application duration closes. You’ll get a queue number, of which a low one is better.
5. Shortlist Your Preferred Living Quarter Several Days Before Your First HDB Appointment
Have a look at the selection’s progress online so you can know which flats are still available, to avoid ending up in non-mature estates, and know which one are off the table.
6. Stop by HDB for Your First Appointment to Choose Your Unit
Remember to carry your HDB Loan Eligibility Letter (HLE), appointment letter, and IC. You’ll also have to pay an option charge which is S$2,000 for an Executive flat and ⅘ room, S$500 for a 2-room Flexi flat, and S$1,000 for a 3-room apartment.
7. Drop by for the Second Appointment
The purpose of this meeting is so you can clear the legal, down-payment, and stamp duty charges. You must also sign the agreement of lease. Some Singaporeans who don’t have enough cash in the CPF OA (Ordinary Account) for the down-payment and overall purchase of the flat apply for an HDB home loan.
The drawback of taking an HDB loan is the high-interest rates linked to their loans. The rates are roughly 2.6%, compared to that of a bank loan, which ranges from 1.6% to 2%. Bank loans with reliable financial products offer more cash.
8. You’re All Set
You’ll receive your keys after the stipulated waiting time has elapsed. The next line of action after getting the keys will be to renovate. You can use the time before getting the keys to get everything in order so the moving process will be less stressful.
An HDB income ceiling plays a crucial role in Singaporean housing. Therefore, you should check to confirm if you qualify to buy HDB flats or not. If you do, please take your time and follow the guidelines above to the letter.
Ask as many questions as you have wherever you don’t understand, so you’re aware of what’s happening all the way. Sure, you’re eager to have your own place. The steps above ensure the flat application process is smooth.
If you aren’t eligible, all hope isn’t lost. There are countless sweet offers to ensure you and your boo get the luxurious yet affordable shelter you deserve as you prepare to buy private property. All the best as you begin this vital house-hunting journey and prepare for private housing.
- HDB income ceilings ensure that lower-income families get fair access to decent housing.
- Currently, the income ceiling is S$14,000 for young couples buying an HDB flat.
- BTO (Built To Order) is the main way eligible Singaporeans purchase HDB living quarters. The new flats have a 4-5 year waiting time.
- Thanks to the Joint Singles Scheme, you can buy an HDB flat if you qualify, even if you’re single.
- You win whether or not you’re eligible to buy an HDB flat.
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