Gov’t announces enhancements to Silver Housing Bonus

More private property owners will qualify for the scheme.

The government has announced several new enhancements to the Silver Housing Bonus (SHB), which gives out cash bonuses to senior property owners who sell their homes to move into smaller flats to supplement their retirement income.

Part of the enhancement is the adjustment of the eligibility criteria so that seniors will qualify for SHB when they commit to a net increase of up to $60k in their CPF Retirement Account (RA) after right-sizing, with the sum going towards their retirement payouts.

The amount can come from their CPF housing refunds, which means that seniors may no longer need to make a cash top-up to qualify for the SHB

In addition, the government will add a cash bonus of $10k for seniors who move to a 2-room or smaller flat, including Community Care Apartments (CCAs), bringing the maximum SHB quantum to $40k up from the current $30,000.

The government is also extending the eligibility of SHB seniors who right-sized from a private residential property with an Annual Value (AV) between $21k and $31k.

Currently, seniors qualify to receive SHB of up to $30k if they make a cash top-up to their CPF RA using part of their net sale proceeds from right-sizing and when they join CPF LIFE. The required cash top-up amount depends on the net sale proceeds and is capped at $60k per household. If the cash top-up is less than $60k, the cash bonus is pro-rated at $1 bonus for every $2 of cash top up into their CPF RA.

Analysts reacts

Christine Sun, Chief Researcher & Strategist at OrangeTee Group said that though the initiative offers a significant opportunity for seniors to capitalize on the value of their assets, some seniors may choose not to participate in this scheme due to cultural beliefs, particularly in some Asian communities, where it is considered important to maintain assets to pass down as inheritance to the next generation.

“Others might prefer to sell their properties on the open market and live with their children. The impact on the property market could be minimal, as this scheme primarily affects 3-room or small flats, which do not constitute the majority of flat types in the market. However, some seniors are now more cash-rich, which may push up demand on smaller resale flats,” Sun said.

Huttons Asia said that the SHB is capped by the prevailing Full Retirement Sum. This means that seniors who have either met or is close to the Full Retirement Sum may not qualify for much of the SHB.

But if they rightsize to a 2-room flexi or Community Apartments (CAs), they can get additional cash bonus. This cash bonus is not prorated. Huttons sees that this may encourage some seniors staying in bigger HDB flats to rightsize. The effect would be an increase in the supply of bigger resale flats that may help to relieve a little bit of the supply tightness in the resale market in 2025. On the other hand, the demand for 2-room flexi or 3-room flats may increase.

Hutttons also said that the 31k extension is rather low with the increase in rents since Covid. This means very few private property owners can qualify.