Ridout Road bungalows: Shanmugam decided to put family home up for sale, Vivian wanted family under one roof
MINISTER for Home Affairs and Law K Shanmugam had rented a black-and-white bungalow at 26 Ridout Road because he decided to put his family home up for sale, while Foreign Affairs Minister Vivian Balakrishnan wanted his extended family to live together at 31 Ridout Road.
The two ministers spoke in Parliament on Monday (Jul 3), responding to 23 questions posed by MPs on the rental of two state-owned bungalows in Ridout Road.
In his statement, Shanmugam said that in 2016, he had had reviewed his finances and realised too much of his savings were tied up in one house. He was advised that it would be wiser not to have most of his savings in one asset.
Meanwhile, Balakrishnan, who had two grandchildren in 2018 and was expecting more to come, wanted to “bring the entire extended family together under one roof while the grandchildren were young.”
Since June 2018, No 26, which has a 23,164 square metres (sq m) land area, has been leased to Mrs Shanmugam. She signed a tenancy agreement for three years with the option of renewal for another two periods of three years each. The rental rate paid was S$26,500 monthly, equal to the guide rent.
BT understands that Shanmugam’s family home is located in the Queen Astrid Park area. It is not known how much the monthly rental rate is for the minister’s property, but rents of detached houses in the area hovered in the S$15,000 to S$19,000 range in 2018, before rising to hit S$48,000 for a 12,900-13,000 sq ft house in 2019.
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No 31, which has a land area of 9,157.36 sq m, was leased by Mrs Balakrishnan in October 2019. After the first three-year term, she was granted a renewal of another term of 3+ 2 years. For the second term, the rental rate paid was S$20,000.
On Monday, Shanmugam reiterated that he was paying market rate for No 26, mostly from renting out his family home which was put on the market in November 2021.
“I am not making any money from the difference in rentals,” the minister added.
Taking into account property tax because the family home is now non-owner occupied and income tax on the rental proceeds, there is a “net deficit”, Shanmugam said.
“I top up the deficit. I am, in essence, using my previous lawyer’s income to pay for the rental for 26 Ridout Road.
“Based on my current income, I would not have offered to rent 26 Ridout Road,” Shanmugam said.
Stressing that he did not consider selling his own home because of financial need, the former lawyer said that after becoming a minister, his income changed and he had forgone his previous earnings as a senior counsel.
Balakrishnan also noted that he was not aware of the guide rent – the minimum rent to be achieved – when his wife signed the tenancy agreement. They originally paid S$19,000 before rents were increased in the second term taking into consideration market conditions.
The minister said: “We were not even aware there had been two prior bids in July and August 2018 at $12,000 and $5,000.
“Arguably, maybe we should have held out longer. But the point is, we signed it.”
Both ministers emphasised the importance of integrity and that they would be happy to answer questions on this matter.
Balakrishnan said he and his wife were “acutely aware” that while they were dealing with a property agent, the ultimate counterparty to the tenancy agreement was the Singapore government.
He said: “At all times, we were scrupulously careful to ensure that everything was above board.”
Shanmugam also said that as a member of the government, it was important that he was held accountable to Singaporeans.
“Many will appreciate that the choice of a person’s home is typically a personal and private matter.
“But I am mindful that as an elected official whose authority is conferred on me by the trust of Singaporeans, the lines between what is personal and public may not always be clear,” Shanmugam said.
During Monday’s Parliament session, Shanmugam also addressed allegations that a contract for works relating to the properties was awarded to Livspace, an interior design firm where his son serves as chief executive officer.
Calling these allegations “false and defamatory”, Shanmugam said his son had told him that Livspace does not have any contracts with SLA and had not done any work on the Ridout properties.
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