Prime Location Public Housing (PLH) 2022 Guide — All You Need To Know

Deborah Gan

Deborah Gan

Last updated 14 October, 2022

Aside from what the PLH model is well-known for (it’s extended MOP to 10 years), is there more to it than we know? Here is everything you need to know about the PLH model.

It has been a while since the government introduced the Prime Location Public Housing (PLH) model in October 2021 and what it entails. Ever since then, it has been the talk of the town.

What stood out to us was that these flats were located in prime locations and that the Minimum Occupancy Period (MOP) is extended from the current 5 years to 10 years, in hopes of easing the number of people who buy BTO flats in prime locations just to flip it and make a huge windfall.

But is there more to it than just the extended MOP? And what criteria have to be fulfilled in order to qualify as a project under the PLH model? We answer all your burning questions here so you know exactly what you’re in for the next BTO launch.

More on this topic:
November BTO Launch 2022 - What To Look Out For
HDB BTO Nov 2022 Kallang/Whampoa Review
HDB BTO November 2022 Bukit Batok Review
HDB BTO Nov 2022 Yishun Review
HDB BTO Nov 2022 Tengah Review

Looking for a home? Compare the best home loans in the market to save on your monthly mortgage!

What is the HDB PLH model?

The PLH model is a public housing model introduced to help keep HDB flats located in prime and central locations affordable and accessible to all Singaporeans.

Past HDB regulations enabled a “lottery effect” whereby Singaporeans who were lucky enough to secure a flat in a prime location were able to profit significantly upon selling their flat after the MOP. This encouraged a tendency for homebuyers to specifically apply for such flats with the sole reason of flipping them for high profits after the MOP.

Because of this, the government introduced the PLH model in hopes of curbing such behaviour. By extending the MOP to 10 years, it would dissuade those who are merely in it for the money from purchasing them and instead, encourage those who want a flat to stay in for the long run.

What do I need to know about the PLH model?

If you intend on applying for a project under the PLH model, these are some crucial factors you need to know:

#1 Additional subsidies available for PLH flats, but subsidy recovery is applied upon resale

For HDB BTO flats, homebuyers can enjoy subsidised prices and grants like the CPF Enhanced Housing Grant (EHG) based on your income. For projects under the PLH model, the government has said that they will also provide additional subsidies, though the exact price is not revealed. 

It is likely that these additional subsidies are fixed for each project, regardless of income. This is to ensure that flats remain affordable to all Singaporeans and level the playing field with other BTO flats in non-prime locations.

But before you rejoice and apply for a project under the PLH model, do note that the subsidies will have to be given back to the government, which will be a percentage of the resale price of the flat. This is to ensure fairness for other BTO applicants who do not receive these additional subsidies.

For example, for the first pilot PLH project River Peaks I & II, the Subsidy Recovery is fixed at 6% of the higher of the resale price or valuation. Assuming the flat is sold at S$1 million in the future, S$60,000 has to be paid as subsidy recovery to HDB.

But do note that the Subsidy Recovery isn’t a fixed percentage across all flats under the PLH model. The percentage would be made known prior to the launch and will remain fixed for that project.

See this also: Complete Guide To HDB Grants: How Much Can You Get?

#2 MOP extended from 5 years to 10 years

We are no strangers to the extension of the MOP from 5 years to 10 years, which is exactly doubled. This is to further push the fact that HDB flats are intended for Singaporeans with genuine housing needs and have strong “owner-occupation intent”, instead of those who are only interested in the profits. This means that the 10-year MOP has to be met before the owner can sell or rent it in the resale market.

The MOP extension might be a point of concern, especially for young couples who intend to have kids. With a 5-year MOP, it would be easier to sell their flat and move to a location that’s nearer to their child’s future school.

But with a 10-year MOP, it is possible that their child might reach Primary One before being able to fulfil the MOP.

#3 Reduction of Married Child Priority Scheme (MCPS)

For normal BTO flats, the Married Child Priority Scheme (MCPS) allocates up to 30% of units for first-timer families and 15% for second-timer families. This means that couples who want to live with or close to their parents will be given priority.

See this also: 8 Hacks To Improve Your HDB BTO Ballot Chances

However, for projects under the PLH model, HDB will review and adjust the priority quota depending on the location.

Let’s say a project under the PLH has many older flats nearby. The quota might be maintained more or less the same because the supply is generally high. However, if there are many private properties surrounding the area, which means the supply of HDB there is quite low, the quota may be lowered to give others a chance to own a flat in that location too.

More on this topic:
7 Lesser-Known Things You Should Be Aware Of Before Buying A BTO Flat
What HDB Flats Can Singles Buy?
Guide To Open Booking Of HDB Flats  
HDB Downpayment Guide 2022 - Resale, BTO, Staggered Downpayment

Protect your home with the best home insurance plans on the market!

#4 Stricter eligibility conditions will be applied for future resale buyers

Currently, the eligibility conditions for resale houses are generally quite lax, and most Singaporeans and even Permanent Residents (PR) are able to purchase one. However, it differs for projects under the PLH models.

In the future, even if you want to buy a project under the PLH model as a resale flat, there will be stricter eligibility criteria — the same as that for buying a HDB BTO flat. According to the Ministry of National Development (MND), the stricter conditions is to ensure that PLH flats remain inclusive and accessible to other flat buyers over time, and not just for the initial buyers.

Let’s take a look at the eligibility conditions:

Conditions

PLH flats / All BTO flats

Typical resale flats

Citizenship

  • At least one applicant is a Singapore citizen (SC)

  • Household must comprise at least one SC and one PR

  • At least one applicant is a SC or PR

  • Household can comprise only PRs

Family nucleus

Must have an eligible family nucleus eg. married couple

Must have an eligible family nucleus, or if single, must be 35 years old and above

Income ceiling

S$14,000 (for couples) or S$21,000 if purchasing with extended/multi-generation family

No income ceiling

Private property ownership

Must not own or have an interest in a private property, and havenot disposed of any in the last 30 months

Allowed, but must dispose of private property within 6 months of buying the resale flat

The biggest change is that PLH resale flats are for Singaporeans only. There is also an income ceiling imposed of S$14,000. And unfortunately, singles are not allowed to apply.

#5 Renting out of the whole PLH flat rental is not allowed

Unlike your typical BTO flats that allow the rental of the whole flat after its 5-year MOP, projects under the PLH model cannot be rented out entirely, even after you’ve completed the long MOP. However, you may still rent out individual rooms.

So if you were planning to wait out the 10-year MOP and rent out your entire flat thinking it would give you a good rental yield, we’re sorry to rain on your parade.

 

HDB BTO

PLH flats

Resale of flat

Allowed after 5-year MOP

Allowed after 10-year MOP

Buying another private property

Allowed after 5-year MOP

Allowed after 10-year MOP

Renting out the whole flat

Allowed after 5-year MOP

Not allowed

Renting out rooms

Allowed

Allowed

More on this topic:
Here's How to Save on Rent in a Landlord's Market
Step-By-Step Guide To Rent A Home In Singapore
Should You Choose Co-Living Or Renting When Moving Out Of Your Parents' Home?
Does Renters' Insurance Protect You From Rowdy Housemates?
Where To Stay While You Wait For BTO And How Much It'll Cost

Where are the PLH projects?

Here is a list of the past BTO launches that comprised PLH projects. Though demand has since fallen ever since the introduction of these new criteria

HDB BTO Launch

HDB BTO projects under the PLH model

Nov 2021

River Peaks I & II (Central)

Feb 2022

King George’s Heights (Kallang/Whampoa)

May 2022

Bukit Merah Ridge (Bukit Merah), Ghim Moh Ascent (Queenstown)

Aug 2022

Havelock Hillside (Bukit Merah), Alexandra Vale (Bukit Merah)

Are there any upcoming PLH projects for BTO?

Though we can’t tell for sure whether or not these projects will fall under the PLH model, you can keep a lookout for these particular projects that are located in prime locations. 

Upcoming HDB BTO Launch

HDB BTO projects which may fall under the PLH model

Nov 2022

Queenstown, Kallang/Whampoa

Feb 2023

Queenstown, Kallang/Whampoa

Should I buy PLH projects?

PLH flats are still considered worth it since they are located in prime locations. Aside from the possible profits, you stand to gain when you sell after its MOP, commuting from your home will be extremely convenient, especially if you’re working at the CBD. Commuting to other parts of the island are also hassle-free, considering the centrality of your home. That, in itself, is already a huge plus point.

But the 10-year MOP may be a concern to some, even for those who genuinely have strong owner-occupation intent. One such example would be young couples who intend to have kids in the future. A 10-year MOP may not be ideal if they are planning to move house after the child is born, to a place nearer to the child’s future school. Taking into account the completion time of about 4 to 6 years, that might be way too long.

Furthermore, though the government is offering additional subsidies, there will be a subsidy recovery when you sell your PLH flat in the future. So while it may be more affordable when you purchase the house, you’ll still have to give back a percentage of the resale price to the government. So if you’re looking to make a fortune out of your unit, it might not be able to fulfil your dreams.

Off the bat, there are many pros and cons to PLH flats, so it’s dependent on where your priorities lie to decide if it’s good for you. If convenience is what you value, then a PLH unit may be a good choice.

Looking for a home? Compare the best home loans in the market to save on your monthly mortgage!

 

Read these next:
Cost To Buy Your First Home In Singapore
How To Buy A House In Singapore: A Complete Guide (2022)
Best Home Insurance in Singapore (2022)
Best Home Loans In Singapore 2022
Latest Home Insurance Promotions And Discounts

A mahjong addict with an undying love for dogs, Deborah is always on the hunt for cheap deals because she is always broke. That is why she is attempting to be more financially savvy to be.. less broke