What is Lease Commence Date

Properties in Singapore are by two types: freehold and leasehold. Leasehold in case of residential buildings is 999 years, 99 years (or 103 years with 4 years construction time), or in rare cases, 60 years. Other types of buildings can have shorter leases. All HDB flats except Studio Apartments are leased on 99 years.

Lease commence date reflects building date, with some exceptions. Actually building date do not have so much importance like lease commence date. Lease starts usually after up to 1 year from when construction is finished, this rule does not apply for pre-1973 blocks, in which lease commence date is the date at which HDB decided to sell / allowed tenants to buy their flats. Construction time lasted 2-3 years in 1990s and 3-4 years in 2000s and today. Household shelter appeared in HDB Annual Report 1996 and first blocks have leases from 1998.

Home Ownership Scheme was introduced in 1964, but oldest HDB leases are from 1967. HOS was piloted in Tiong Bahru pre-war blocks in 1965-1967 and people could use CPF to purchase their flats, they are also the only SIT/HDB flats transacted as private properties (source: tiongbahruestate.blogspot.com). So, in 1967 they realized how to implement HOS without privatization?

Most blocks built during 1960s were leased to owners in stages from 1967 to 1973. Tiong Bahru blocks built in 1948-1954 blocks have leases from 1973. Redhill blocks built in 1955 have leases from 1983. Some 1970s 2-Room blocks were reserved for rental until 1986. Other 2/3-Room blocks remained rental blocks forever, for example Dakota Crescent blocks, scheduled for demolition in 2017. The 1970s and 1980s blocks converted during 1990s into Jumbo flats have leases from the year of conversion.

What happen when 99-year lease expire

Nobody knows. Lorong 3 Geylang houses are the first leases to end in 2020 (private, 60-year lease). Let’s wait and we will see what happens! There are no other private residential leases on 60 years. Fuyong Estate is the next one to have its 99-year lease expiring, in 2047.

Once time ago I saw a funny guy saying in a forum that Freehold property remains yours forever while a Leasehold means that you will be kicked out at end of lease, and another guy correcting him: Government can take over both leasehold and freehold properties, but only freehold owners are rewarded at full value. Also owners can apply for lease extension.

Oldest HDB leases are from 1 Jan 1967 so they will expire at end of 2065, I suggest you to not care too much about reaching end of lease. Some paranoid people thinks that if you purchase a flat with less than 60 years old of lease, you cannot resell it. The only reason for which old flats are hard to sell, is the increasing number of such paranoid people. Is rumored that when remaining lease is 50%, property value is 70% of its value as new. Value is expected to drop significantly only when lease goes less than 30 years.

During 1990s, the old estates built in 1960s and 1970s suffered from dilapidated buildings, aging population and businesses moving out. On resale market Queenstown and Ang Mo Kio were cheaper than Pasir Ris, one of the cheapest towns today (source: Resale flat prices database). To counter this, HDB launched Main Upgrading Programme in 1990, Interim Upgrading Programme in 1993 and Selective En-bloc Redevelopment Scheme in 1995.

Between 1995 and 2007, 72 SERS sites were announced. This created widespread rumors among population that any 1960s and 1970s block can get SERS, increasing demand for old flats, people buying 1960s and 1970s flats on purpose to have their block demolished and receive a new flat at subsidized price. Currently, blocks leased in 1966-1980 are priced higher than blocks leased in 1981-2000. Due to this reason, is no longer viable for HDB to redevelop old blocks, number of new SERS sites announced dropped dramatically.

Between 2008 and 2016, only 9 SERS sites were announced, total 7570 flats. At this rate, 285 years are required to replace all 241343 flats built between 1970 and 1980.

I believe that HDB is waiting for flats to reach near end of lease to have value lower, then SERS them, I believe that all pre-1980 flats will get SERS before their end of lease in 2060s-2070s, but I cannot imagine what will happen beyond this, too many blocks were built since 1980s onward to SERS them at the rate they were originally built.

Do note that HDB blocks are not structurally designed to stand more than 100 years, so they need to be replaced. See also Eastern Europe which experienced a massive construction between 1960 and 1990 and today economies are not powerful enough to built in 10 years what communists built in 1 year.

Use CPF for property purchase with less than 60 years of lease

  • No CPF can be used if the remaining lease of a property is less than 30 years.
  • A property owner is eligible to use his CPF for the property if his age plus the remaining lease of the property is at least 80 years
  • The maximum amount of OA savings you can use is capped at a percentage of the property purchase price or the value of property, whicever is lower.

The above applies to all Housing & Development Board flats bought on or after 1 July 2013. The maximum amount of CPF savings that can be used for such property is set at a level that covers the estimated depreciated value of the property when the youngest eligible owner using his/her CPF savings for the property reaches 55 years old. This is to ensure prudent use of a member’s CPF savings when buying properties with shorter remaining lease.

You may refer to our brochure (PDF, 1.3MB) for more information or use our Property with Less Than 60 Years Lease Calculator to decide your eligibility and the maximum amount of CPF savings that you can use.

Part of this article is copied from https://www.cpf.gov.sg/Members/FAQ/schemes/housing/housing-scheme#faq2185500

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