Landed Property

Schemes In Buying A Property

 

What is Private Properties Scheme (PPS)?


Under PPS, you can use your CPF Ordinary Account (OA) savings to buy or build private residential property for occupation or investment. It can be used to:

  • pay the purchase price of the private property;
  • repay the housing loan in part or whole and/or to service the monthly housing loan instalments taken to buy the private property;
  • repay the construction loan in part or whole and/or to service the monthly construction loan instalments taken to buy land and/or to construct a house on that land; and
  • pay the stamp duty, legal costs, survey fees and other related cost incurred in the private property purchase, refinancing and/or construction of the house.

Am I eligible to use my CPF savings under PPS?

All CPF members who are eligible to buy a private property are eligible to use their CPF savings under PPS.

You are not eligible if:

  • you are buying a private property with a remaining lease of less than 30 years;
  • you are buying a private property with a remaining lease of less than 60 but at least 30 years and your age plus the remaining lease of the private property is less than 80 years;
  • you are a single person buying a private property with a non-related single and you have used CPF for an existing property; or
  • you are a married person buying a private property with a non-related single.

Are you eligible:

If you own a HDB flat, a DBSS flat or an Executive Condominium, you may wish to check with HDB whether you have fulfilled the minimum occupation period before you purchase any private residential properties.

If you are not a Singapore citizen, you will need to obtain approval from the Controller of Residential Property and the Singapore Land Authority, before you buy landed houses which includes strata landed houses.

Term and Conditions for use of CPF Saving

 

1.OBJECTIVE OF THE SCHEME

This objective of the Scheme is to help CPF members buy/build private residential properties for their own occupation or for rental. It applies only to properties in Singapore which are on freehold land or have remaining leases of at least 30 years.

2. USE OF CPF SAVINGS UNDER THE SCHEME

a) A member who is not an undischarged bankrupt is allowed to withdraw his CPF Ordinary Account savings under the Scheme for:

(i) Direct payment of the purchase price of the property to the property developer and/or sellers; The approved CPF moneys will only be released after the member has paid the balance (purchase price less housing loan and approved CPF moneys) in cash. Any difference between the purchase price and the value of the property has to be paid in cash.

(ii) Repayment of housing loan in part or whole and/or to pay the monthly instalment of the housing loan taken for the purchase of the property;

(iii) Repayment of housing loan in part or whole and/or to pay the monthly instalment of the housing loan taken for the purchase of land and/or for construction of a house on that land;

(iv) Payment of stamp duty, legal costs, survey fees and other related cost incurred in connection with the purchase, refinancing and/or construction of the house.

3. CPF CHARGE

A CPF Charge will be filed by the Board on the property upon the release of CPF savings for the property. The Charge shall be in force until the CPF released towards the property, including the interest accrued, are refunded into the member’s account as required by the Board.

4. CPF WITHDRAWAL LIMIT

For property with remaining lease of at least 60 years

a) Where a member has purchased a property before 1 Sept 02 and entered into a loan contract with the financier for a housing loan before 1 Sept 02, he is allowed to use his Ordinary Account savings to pay up to the Valuation Limit (VL) of the property. The VL is the lower of the purchase price or the value of the property at the time of purchased as assessed by the Board.

If the housing loan is still outstanding when the VL is reached and the member is below age 55, he is required to set aside the current Basic Retirement Sum in his Special Account (including the amount used for investment) and Ordinary Account before he may continue to use his CPF savings. For a member who is aged 55 and above, he is required to set aside his Basic Retirement Sum in his Retirement Account.

b) Where a member has purchased a property and/or signed a new loan contract with the financier on or after 1 Sept 02, he is allowed to use his Ordinary Account savings to pay up to the VL of the property.

If the housing loan is still outstanding when this VL is reached and the member is below age 55, he may continue to use his CPF savings up to the applicable Withdrawal Limit (“WL”) to repay the housing loan, provided he can set the current Basic Retirement Sum in his Special Account (including the amount used for investment) and Ordinary Account. For a member who is aged 55 and above, he is required to set aside his Basic Retirement Sum in his Retirement Account. The table below shows the schedule of the WL over the years:

CPF Withdrawal Limit

CPF Withdrawal Limit

For property with remaining lease of less than 60 years, but at least 30 years

c) Where a member has purchased a property with remaining lease of less than 60 years, additional rules apply to the use of CPF for property, as follows:

(i) No CPF can be used if the remaining lease of a property is less than 30 years.

(ii) A property owner is eligible to use his CPF for the property only if his age plus the remaining lease of the property is at least 80 years.

(iii) The maximum amount of CPF that can be used is capped at a percentage of the lower of the purchase price or the value of the property at the time of purchase. The percentage is computed based on the remaining lease of the property when the youngest eligible member using CPF reaches age 55, as shown below:

For Property with remaining lease of less than 60 years but at least 30 years

For Property with remaining lease of less than 60 years but at least 30 years

Restrictions on use of CPF for multiple property purchases

d) Where a member has used CPF for a property (HDB flat or private property) before 1 Jul 06, and applies to use CPF for another property purchased on or after 1 Jul 06, he is required to set aside the current Basic Retirement Sum if he is below age 55 before he can withdraw any excess in the Ordinary Account for the property. Savings in the Special Account (including the amount used for investment) and Ordinary Account can be used to meet the current Basic Retirement Sum.

For a member who is aged 55 and above, he is required to set aside his Basic Retirement Sum in his Retirement Account. The withdrawal limit for the second and subsequent properties will be set at:

(i) Valuation Limit for properties with remaining lease of at least 60 years; or

(ii) A percentage of the Valuation Limit for properties with remaining lease of less than 60 years but at least 30 years.

5. PRIORITY ARRANGEMENTS BETWEEN CPF BOARD AND FINANCIER

a) Properties bought before 1 Sept 02 and/or loan contracts with financier signed before 1 Sept 02 When the property is sold, the sale proceeds will first be used to repay the CPF savings used for payment of stamp duty, legal costs and survey fees, and CPF principal sum up to 80% of the Valuation Limit before repayment of the balance CPF principal sum, outstanding housing loan, CPF accrued interest, outstanding housing loan interest, and the Board’s and financier’s costs and expenses and all other sums owing to the financier in that order;

b) Properties bought on or after 1 Sept 02 and/or loan contracts with financier signed on or after 1 Sept 02 When the property is sold, the sale proceeds shall be applied to repay the financier and the Board in the following order of priority:-

(i) First – repayment of the outstanding housing loan;

(ii) Second – repayment of CPF principal sum up to 100% of the Valuation Limit plus CPF saving used to pay the legal costs, stamp duty and survey fees;

(iii) Third – Equal ranking (pari passu) – repayment of CPF principal sum beyond 100% of the Valuation Limit and CPF accrued interest; – repayment of outstanding balance of the housing loan interests;

(iv) Fourth – Equal ranking (pari passu) – repayment of the Board’s legal costs and expenses; – repayment of financier’s legal costs and expenses;

(v) Fifth – repayment of any other moneys owing to financier under the mortgage

6. TYPES OF HOUSING LOAN

The housing loan should be for a fixed term and be secured by a mortgage on the property, which is owned by the member.

In addition, CPF savings may also be used to repay the following types of housing loan:

a) a housing loan for a fixed term and is secured by a mortgage which resulted from a transfer of the initial housing loan from one lender to another, provided that the initial housing loan was secured by a mortgage on the property;

b) a housing loan obtained from a bona fide employer and is secured by a mortgage on the property and the member is required to repay the housing loan by monthly instalments as stipulated in the agreement entered into with the employer;

c) a housing loan granted on a non-checking overdraft account by a bank in Singapore and is secured by a mortgage on the property.

In cases where the member has completed the purchase of the property with a checking overdraft account, the amount of loan that is treated as the housing loan is the lowest outstanding amount of the overdraft from the time it was granted to the date of application for withdrawal of CPF savings. This portion of the loan has to be converted to a term loan before CPF savings can be used to repay the loan. The excess loan is deemed to be a non-housing loan and cannot be repaid with CPF savings.

7. REFUND OF CPF SAVINGS UPON SALE OR TRANSFER OF THE PROPERTY

When the property is sold or transferred during the member’s lifetime regardless of his age, he is required to refund to his CPF Account the CPF principal amount withdrawn together with the accrued interest.

8. JOINT USE OF CPF SAVINGS

a) Members of the immediate family e.g. spouses, parents, children and siblings; or

b) Non-related singles (unmarried, divorced with Decree Absolute obtained or widowed)

are allowed to jointly buy a property using their combined CPF savings. The total amount that can be withdrawn by all the co-owners is subject to the conditions stated in paragraph 4 above.

For application under 8(a), co-owners of the property who are not using CPF savings should also be members of the immediate family. Members are required to furnish the Board with certified true copies of the documents (certified by members’ lawyers) showing the relationships among the co-owners (for example, marriage certificate, birth certificates, etc.) at the time of submission of application.

For application under 8(b), the non-related singles can only use their combined CPF savings to buy a property provided that each of them:

(i) is not currently using CPF for lumpsum or monthly payments for any existing property (private residential property or HDB flat); and

(ii) has made the requisite CPF refunds for moneys withdrawn for housing purposes (if any).

9. OTHER CONDITIONS FOR USE OF CPF SAVINGS

a) The amounts approved for withdrawal can only be released when all the necessary documents required by the Board have been executed, and the balance purchase price (purchase price less housing loan and approved CPF moneys) have been paid in cash. Any difference between the purchase price and the value of the property has to be paid in cash.

b) Members who are owners of HDB flats (including HUDC Phase 3 & 4 flats) are required to obtain approval from HDB, where applicable, regarding the purchase of their private residential properties.

c) The Board reserves the right to value the property before releasing CPF savings. The valuation fees shall be paid by the member.

d) If the member or the co-purchaser is a non-Singapore Citizen or Permanent Resident, he is required to obtain approval from the Land Dealings (Approval) Unit for the purchase of the property, where applicable.

e) For properties which are under construction, CPF savings will be paid progressively to meet the progress instalments to the developers.

f) For properties which are constructed by unlicensed developers, CPF savings can only be released when the properties are completed up to the roofing stage.

g) The consent of the Board must be obtained before the property can be sold, transferred or mortgaged. Page 3 of 4 Last Updated on: 6 May 2015

h) The property shall not be used for any immoral, illegal or unauthorised purposes.

i) CPF savings cannot be used to repay non-housing loans (i.e. loans not taken for the purchase of the property).

j) CPF savings cannot be used for purposes of repairs and/or renovation of the property

10. OTHER CONDITIONS FOR USE OF CPF SAVINGS FOR MULTIPLE PROPERTIES

a) Members who already own a property bought with their CPF savings and wish to buy another property with CPF savings on or after 1 Jul 06, will be given a grace period if they intend to sell the existing properties. The grace period is as follows:

(i) 6 months from date of issue of TOP if the new property is under construction

(ii) 6 months from date of completion of purchase if the new property is a completed property.

b) Where members bought their first property before 1 Jul 06, and apply to use CPF for the first property only after making an application to use CPF for the second property bought after 1 Jul 06, the multiple property (MP) rule will apply to the second property. For example:

Example of Property 1 and Property 2

Example of Property 1 and Property 2

11. ADDITIONAL CONDITIONS FOR USE OF CPF SAVINGS FOR PURCHASE OF LAND AND CONSTRUCTION OF HOUSE

a) A member is not allowed to use his CPF savings to pay directly for the land cost and the construction costs of the house. He would have to use his own funds and/or a loan to meet the said payments first. When the house has been completed up to the Temporary Occupation Permit stage, the member can then use his CPF savings to repay the loan.

Reimbursement of the land and construction costs paid by him with his own funds can only be allowed if the house is constructed on or after 1 Oct 1993 and the construction of the house has commenced within six (6) months from completion date of purchase of the land. If the construction of the house has commenced more than six (6) months after the completion date of purchase of the land, he can only use his CPF savings to reimburse himself for the construction costs.

b) Requests for reimbursement of CPF savings have to be made within six months after the issue of the Temporary Occupation Permit. The reimbursement will be in the form of a one-time payment. Monthly withdrawals are not allowed. Requests for further reimbursement from the members’ future CPF savings are also not allowed.

c) Members can submit their applications, with the following documents, three months before the issue of the Temporary Occupation Permit:

(i) A valuation report of the completed property prepared by a licensed valuer. Valuation report prepared by the financier will be considered on a case by case basis. The Board reserves the right to re-assess the value of the property, if necessary.

(ii) Breakdown of contractors’ construction costs.

(iii) Original receipts to show evidence of the payments made from your own funds (if applying for reimbursement).

(iv) Financier’s Letter of Offer for the land/construction loan(s).

(v) Grant of written permission from Urban Redevelopment Authority (URA) for the proposed “reconstruction” or “erection” of the new property.

12. PENALTY FOR FALSE DECLARATION AND MIS-USE OF PROPERTY

Any member who has purchased/built a property under the Scheme by making a false statement or declaration, or furnishing any information or document which he knows to be false in material or who allows such property to be used for any immoral, illegal or unauthorised purposes, or who contravenes any of the conditions under the Scheme, shall be guilty of an offence under the CPF Act.

The Board shall in such circumstances, be entitled to seize the property and sell it to recover the amount of CPF savings that has been withdrawn together with the accrued interest.

Evaluate

 

How much CPF savings can I use?

To ensure you have enough CPF savings for your retirement years, there are housing limits on the amount of CPF savings you can use to buy a private property.

Valuation Limit (VL) is the purchase price or the value of the private property at the time of purchase, whichever is lower.

Withdrawal Limit (WL) is 120% of the VL. This is the maximum amount of CPF you can use for the private property.

To continue using your CPF beyond VL, up to WL, you need to meet the following requirements:

  • Below 55 years old: To set aside the current Basic Retirement Sum (BRS) in your Special Account (SA), including the amount withdrawn for investment, and Ordinary Account (OA).
  • 55 years old and above: To meet the BRS in your Retirement Account (RA), SA (including the amount withdrawn for investment) and OA.

The amount of CPF you can use is lower if you are buying a private property with a remaining lease of less than 60 years but at least 30 years. Read more on buying a private property with a remaining lease of less than 60 years.

Can I use my CPF to buy more than one property?

Yes, you can use your CPF to buy more than one property. However, there are some restrictions in place under the Multiple Property Rule.

If I had bought two private properties, which property will my CPF savings be used to service the monthly instalment first?

If you are using CPF savings to service the housing loan for two private properties, we will deduct from your OA to pay the monthly instalments as requested by you. There is no fixed order of deduction as to which property will be paid first. Please ensure that you have sufficient funds in your CPF account for the monthly instalment deductions.

What will happen to my sale proceeds upon the sale of my private property?

The sale proceeds will be used to pay off the outstanding housing loan taken to buy the private property and the required CPF refund in the order agreed among the owners, financiers and the Board.

How much do I need to refund to my CPF upon the sale of my private property?


If you have used your CPF savings to finance your private property, you will have to refund to your CPF:

  • the principal CPF amount (P) which you have withdrawn for the private property; and
  • the accrued interest (I) which you would have earned if the savings were not taken out from your CPF account.

If you are 55 years old and above, and have pledged your property to withdraw your Retirement Account (RA) savings in cash, you will need to refund the pledged amount on top of the P and I. The amount refunded will be used to set aside:

After which, you can withdraw the balances in cash. From 1 January 2016, the MMS will be removed. You will no longer be required to top up your MA before making a CPF withdrawal. In view of this upcoming change, from now till 31 December 2015, you have the option not to top up your MA when making a housing refund. Please write to our Housing Schemes Department to do so.

Should I use my CPF ?

Using your CPF Ordinary Account (OA) savings to finance your private property is an alternative to using cash. However, you should not use all your CPF OA savings to finance your private property. CPF is essentially for your retirement. The more you use for property, the less you may have for retirement. Do keep in mind:

  • the other items you are servicing with your CPF OA savings, such as your children’s local tertiary education and insurance premiums; and
  • the reduced CPF contribution rates as you age.

How can I determine a suitable loan amount, repayment period and repayment amount that is within my financial means?

You can try Our First Home Calculator which provides an estimate of an affordable home price, taking into consideration your gross household income and expenses, as well as the repayment amount and repayment period.

How do I apply to use my CPF ?

1. You will have to authorise your lawyer to submit

    • an application form to use your CPF savings to buy the private property; and
    • a valuation report prepared by a licensed valuer

2. You will receive a Letter of Approval. 3. You will have to instruct your lawyer to work with CPF Board’s lawyer to complete the legal documentation. Your CPF savings will be released to buy the private property after you have:

    1. submitted all legal documentation;
    2. paid the required cash downpayment of at least 5% of the valuation limit; and
    3. paid any balance purchase price after taking into consideration the CPF lumpsum and the housing loan amount.

How can I change my monthly repayment arrangement?

Online using my cpf

  1. Login with your SingPass.
  2. Submit an online application via My Requests – Property.

Your application will be processed by the next working day. Mail

  1. Download and complete Application to Use CPF savings to Repay Housing Loan for Private Property (PPS Form 4B).
  2. Mail it to: CPF Board Housing Schemes Department (HSD) 79 Robinson Road Singapore 068897

Your application will be processed within five working days.

How do I make a partial repayment of my housing loan?

If you are using CPF

First, you will have to seek approval from your financier and ensure you have sufficient CPF Ordinary Account savings, subject to the housing limits, for the repayment. Online using my cpf

  1. Login with your SingPass.
  2. Submit an online application via My Requests – Property.

Your application will be processed within four working days. Mail

  1. Download and complete Application to Use CPF savings to Repay Housing Loan for Private Property (PPS Form 4B).
  2. Mail it to: CPF Board Housing Schemes Department (HSD) 79 Robinson Road Singapore 068897

Your application will be processed within five working days.

If you are using cash

Please check with your financier on the procedures.

How do I make a full redemption of my housing loan?

If you are using CPF

  1. Seek approval from your financier and ensure you have sufficient CPF Ordinary Account savings for the repayment, subject to the housing limits.
  2. Engage a lawyer to discharge the mortgage on your private property.
  3. Instruct your lawyer to liaise with the Board on the use of your CPF for the full redemption and cessation of the monthly deduction from your CPF account to service the housing loan.

Your application will be processed within five working days.

If you are using cash

Please check with your financier on the procedures.

 

What are the current CPF contribution rates?

The current CPF contribution rates are shown in the tables below. Tables A1 and A2 show the contribution rates for private sector employees and public sector non-pensionable employees. Tables B1 and B2 show the contribution rates for public sector pensionable employees.

The Government has announced the increase of the CPF contribution rates in the Singapore Budget 2015. This increase will apply to the wages earned from 1 January 2016. To find out more about the changes, please refer to the Singapore Budget 2015 CPF Initiatives.

CPF TABLE A1

CPF TABLE A2

CPF TABLE B1

CPF TABLE B2

What are the current CPF allocation rates?

CPF contributions are allocated first to the employee’s Medisave Account, follow by the Special Account. The remainder is then allocated to the Ordinary Account.  Table C1 shows the prevailing allocation rates for private sector employees and public sector non-pensionable employees. Table C2 shows the allocation rates for public sector pensionable employees.

CPF TABLE C1

 

CPF TABLE C2

 

What are the factors affecting CPF contribution and allocation rates?

The CPF contribution rate applicable for your employee depends on his:

  • citizenship – Singapore Citizen or SPR in the first and second year or from the third year of obtaining SPR status;
  • age group; and
  • total wages for the calendar month.

Unlike contribution rates, the allocation rates applicable for your employee depend on his employee type and age group.

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How do I determine the age groups of my employees?

Different CPF contribution and allocation rates are applied on different age groups to ensure the employability of workers and to meet employees’ needs at various stages of their lives respectively. See table below for the various age groups.

CPF AGE GROUPS


Your employee is considered to be 35, 45, 50, 55, 60 or 65 years old in the month of his 35th, 45th, 50th, 55th, 60th or 65th birthday. The employee will be above 35, 45, 50, 55, 60 or 65 years from the month after the month of his 35th, 45th, 50th, 55th, 60th or 65th birthday.

Example

If your employee’s 60th birthday is on 15 January 2016, the CPF contribution and allocation rates for:

  • ‘Above 55 to 60 years’ age group will be applicable up till January 2016; and
  • ‘Above 60 to 65 years’ age group will apply from 1 February 2016 up to his 65th birthday month.

Where can I view the current CPF contribution rate booklets?

Where can I view the past CPF contribution and allocation rates?

The past CPF contribution and allocation rates prior to 1 January 2016 can be found here.

What happens when my foreign employee becomes a SPR?

CPF contributions are payable once your foreign employee obtains SPR status. CPF contributions are payable at lower rates (i.e. graduated employer-graduated employee contribution rates) during the first two years of obtaining SPR status.

From the third year onwards, both you and SPR employee will contribute to CPF at full employer-full employee rates (i.e. rates applicable for a Singapore Citizen employee.)

How do I determine the year of SPR status for my SPR employees?

The first year of obtaining SPR status starts from the date of SPR conversion. This refers to the date indicated on the entry permit (Form 5 or Form 5A) issued by the Immigrations and Checkpoints Authority of Singapore (ICA). It ends on the last day of the month of the first anniversary of SPR conversion.

The second year of obtaining SPR status starts from the first day of the month after the month of the first anniversary of SPR conversion. It ends on the last day of the month of the second anniversary of SPR conversion.

A SPR employee in his first two years of obtaining SPR status and his employer can jointly apply to CPF Board to contribute to CPF at higher rates:

  • Full employer-graduated employee rates; or
  • Full employer-full employee rates.

The third year of obtaining SPR status starts from the first day of the month after the month of the second anniversary of SPR conversion.

Example

If your employee obtained his SPR status on 15 January 2015, the start and end dates for first, second and third year of obtaining SPR status are shown in the table below:

YEAR OF OBTAINING


 

Apply

How do I jointly apply with my SPR employees to pay CPF at higher rates for them during their first two years of obtaining SPR status?

  1. Download and fill up Form CBD/PR/94A
  2. Mail it to:
    CPF Board
    Collection Business Department
    238B Thomson Road
    #08-00 Tower B Novena Square
    Singapore 307685
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