HDB offers to buy back flats from owners constrained by Ethnic Integration Policy, on case-by-case basis

The Housing Board (HDB) will offer to buy back flats for eligible owners who face "genuine difficulties" selling their homes due to constraints from the Ethnic Integration Policy (EIP), on a case-by-case basis, Minister for National Development Desmond Lee said at the Committee of Supply Debate on Tuesday (Mar 8).

The government has been helping such residents by giving them more time to sell their flats or even waiving EIP limits "in exceptional circumstances", but it is not sustainable to keep doing the latter as this would erode the policy's objectives, said Lee.

That is why the government is instead introducing this buyback assistance, with immediate effect.

To qualify, flat owners must have fulfilled the Minimum Occupation Period and owned the flat for at least 10 years. They must also provide proof of "genuine attempts" to sell the flat.

This can be in the form of online or print property listings which include the asking price, listing date, and records of flat viewings, HDB and MND said in a joint release.

Homeowners must also have attempted to sell their units at a "reasonable asking price" over a continuous period of time, comparable to the time taken by most other homeowners to sell their apartments.

"Based on HDB's experience, 6 months is presently sufficient for most flat owners to do so. This may change depending on prevailing market conditions," the agencies said.

They added that in setting prices, owners can take reference from recent transactions within 200m of their flats, and make adjustments to account for their units' attributes such as storey height or orientation. This information can be accessed via HDB's Transactions Within 200 Metres e-Service.

For those who have lived in their flats for less than 10 years, Lee added: "Those who are EIP-constrained and need to move out earlier due to extenuating circumstances can still apply to HDB for special consideration."

Once a flat owner is assessed to be eligible for buyback assistance, HDB will appoint a professional valuer licensed by the Inland Revenue of Singapore (Iras) to determine the buyback price.

Flat owners can take up to three months to decide if they wish to accept HDB's buyback offer. Those who reject the offer will not be eligible for buyback assistance for a period of 12 months after the offer lapses.

Repurchased flats will become part of HDB's housing stock, to be offered for sale to the public through the Sale of Balance Flats exercises or open booking, HDB and MND said.

During his speech, Lee also explained why the government was not taking up other suggestions to help EIP-constrained flat owners.

On providing grants to those who have to sell their flats at significantly lower prices due to the EIP, Lee said it would be difficult to size the grant fairly, with risks of under- or overcompensating home owners.

He added that some buyers and sellers might artifically lower their transaction price to take advantage of the grant.

As for extending EIP limits over a larger geographical area, this would likely lead to over-concentration of particular ethnic groups in specific blocks or neighbourhoods, said Lee.

"So, on balance, we have decided that the most feasible option would be to buy back flats from EIP-constrained households in genuine need," he said.

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