Archive for the ‘CPF Related Issues’ Category

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INCREASE IN CPF MINIMUM SUM

June 7, 2007

News Release by:
Central Provident Fund Board
07 June 2007

CPF Minimum Sum
From 1 July 07, the CPF Minimum Sum (MS) will be increased from $94,600 to $99,600. The new amount will apply to CPF members who turn 55 between 1 July 07 and 30 June 08. CPF members who set aside the $99,600 fully in cash will receive a monthly payout of $790 from age 62 for about 20 years.

This increase is in line with the announcements made in August 03 that the CPF MS will be raised gradually to reach $120,000 (in 2003 dollars) in 2013. The increase in MS, which includes an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement.

PUBLIC ENQUIRIES
For more information, please visit http://www.cpf.gov.sg/ or call the CPF Call Centre at 1800-227 1188.

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How old are the Tiong Bahru Properties

January 1, 2007

The lease of most Tiong Bahru Pre-War Conserved flats start between 1st Jan 1965 to 1967.
(The Singapore Government started selling the units to the individual owners from 1965 onward)

As at 1st January 2005, the lease remaining for this area is less than 60 years.

Do take note of how this will impact your CPF withdrawal limits and your bank loans when making an offer for these properties.

YOUR AGE WILL ALSO DETERMINED THE CPF WITHDRAWAL LIMITS.

The lease for the HDB side starts from 1st Jan 1973.

The rule will affect those who will be using bank loans to finance their purchase from 1st Jan 2013 onwards.

Those who are eligible for the HDB loans are not affected by this ruling.

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BUYING A PROPERTY WITH REMAINING LEASE OF LESS THAN 60 YEARS BUT AT LEAST 30 YEARS

July 1, 2006
Click on image for enlarged version

1) How much of my CPF savings can I withdraw to buy a property with remaining lease of less than 60 years but at least 30 years?

You can use your Ordinary Account savings, and the future monthly CPF contributions in this account to buy the property and/ or to pay the monthly installments of the housing loan up to the applicable Withdrawal Limit (WL).

The applicable WL is set at a level that covers the estimated depreciated value of the property when the member reaches the CPF withdrawal age of 55 years. It is calculated based on the ratio of the remaining lease when the member is 55 years old, to the lease at the point of purchase.

Example:

A 35 year old member buys a private property with 50 years of lease remaining. When the member turns 55 years old, the property will have 30 years of lease remaining.Hence, the applicable WL = 30/50 x 100% = 60% of *Valuation Limit

Valuation Limit is the lower of the purchase price or the value of the property at the time of purchase.

For details of applicable WL, please refer to the above table.

2) I am 30 years old and I wish to buy a private property which has a remaining lease of 59 years and 11 months.Would I be eligible to withdraw my CPF savings up to 100% of valuation limit?

No. As the property has a remaining lease of less than 60 years, a lower withdrawal limit will be applicable for your case. Based on the property remaining lease of 59 years and your age of 30 years, you may withdraw up to 58% of the valuation limit for the property. Once this limit is reached, you cannot withdraw more CPF savings for the property.

3) I am now 40 years old. Can I buy a property with a remaining lease of 30 years?

No. You cannot use your CPF to buy this property as the remaining lease of 30 years will not last you till 80 years old.