How HDB’s Enhanced Housing Grants will Affect You

Ryan Ong

Ryan Ong

Last updated 25 August, 2015
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What can you expect from PM Lee's announcements on housing grants? We break it down for you in this article.

During the National Day Rally speech, Prime Minister Lee Hsien Loong announced several upgrades to housing grants. These changes purportedly make housing so affordable, someone earning less than S$1,000 a month will be able to own a two room flat. Here’s how they’ll change your life:

Upgrades to Affordable Housing

Changes have been made to the structure of grants and income ceilings, which will affect HDB and Executive Condominium (EC) buyers. The key changes include:

  • Raised Income Limits
  • Easier to Qualify for Special Housing Grants
  • Bigger Special Housing Grants
  • New Proximity Housing Grant

1. Raised Income Limits

The income limit for HDB flats and ECs have been raised by S$2,000 each. This means households with an income not exceeding S$12,000 can now buy a HDB flat, and ECs will be available to households not earning more than S$14,000. This is a relief to the sandwiched classes, who earned too much for HDB flats and ECs, but not enough to comfortably afford private housing.

The immediate impact will be increased competition for government housing: people previously eyeing the private market may now be joining the queue for flats and ECs.

2. Easier to Qualify for Special Housing Grants

The Special Housing Grant (SHG) subsidises the cost of a flat (see below). Previously, the SHG was only available to households with an income of S$6,500 or under. It will now be raised to cover home buyers with an income of S$8,500 or under.

For reference, Singapore’s median income is S$3,700. Assuming a dual income family (working couple), the typical household income should be around S$7,400. This change is significant, as it means the majority of Singaporeans will now have the SHG. This will be a benefit to the increasingly squeezed middle class.

3. Bigger Special Housing Grants

The SHG was previously capped at S$20,000. Under the revised scheme, the amount has been doubled to S$40,000. The new SHG is as follows:

Household Income


S$5,000 or underS$40,000
S$5,001 - S$5,500S$35,000
S$5501 - S$6,000S$30,000
S$6,001 - S$6,500S$25,000
S$6,501 - S$7,000S$20,000
S$7,001 - S$7,500S$15,000
S$7,501 - S$8,000S$10,000
S$8,001 - S$8,500S$5,000

The larger and more widely accessible grant will improve housing affordability as a whole.


4. Proximity Housing Grant

The Proximity Housing Grant (PHG) provides a subsidy of S$20,000 for resale flat buyers, provided they are purchasing property within close proximity of their parents or married children. The intention is to strengthen family bonding.

This could be helpful to dual income families, as grandparents can more easily step in to look after the children. A dual income source, coupled with less reliance on paid help (e.g. babysitters, maids) could translate to healthy financial positions. It will equally benefit people who need to look after ageing parents.

Overall, the new grants a relief to an increasingly burdened middle class. Hopefully, they will put the savings to good use. Building a retirement or emergency fund, coupled with an affordable home loan, provide the basics of long term financial security.

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Ryan has been writing about finance for the last 10 years. He also has his fingers in a lot of other pies, having written for publications such as Men’s Health, Her World, Esquire, and Yahoo! Finance.


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