What Is the Silver Housing Bonus (SHB)?
As you get older and your children leave your home, it is not always necessary to stay in your current flat. In some instances, having a larger home can even be a hassle. For that reason, many seniors around the world choose to "downsize" and move to a smaller home. Thanks to the Silver Housing Bonus (SHB), homeowners in Singapore can easily earn a cash bonus up to S$30,000 by downsizing their flat. In this article, we help homeowners by explaining the SHB and how it can affect their finances.
- What Is the Silver Housing Bonus?
- Who Is Eligible for the Silver Housing Bonus Scheme?
- Silver Support Scheme
- SHB Frequently Asked Questions
What Is the Silver Housing Bonus?
The Silver Housing Bonus incentivises seniors in Singapore to downsize their home and use the proceeds to contribute to their CPF Retirement Account (RA), in order to earn up to S$30,000 as a cash bonus. The size of the Silver Housing Bonus received depends on the net proceeds and how much homeowners contribute to their CPF Retirement Account.
How to Calculate Net Proceeds for SHB
The first step to figuring out how much you can earn from the Silver Housing Bonus is to calculate the net proceeds from the sale of your current flat. To get the net proceeds figure, you must subtract a number of costs from the revenue earned from selling the current property. These costs include the current property loan amount, CPF refund, resale levy, deductible for ancillary costs, and cash used for the purchase of the new property
| Net Proceeds Example Calculation | |
|---|---|
| Sale Price of Current Flat | S$500,000 |
| Outstanding Home Loan | -S$75,000 |
| Refund to CPF Account | -S$150,000 |
| Resale Levy | -S$40,000 |
| Deductible of up to S$15,000 (Ancillary Costs) | -S$15,000 |
| Cash Used for Purchase of Next Property | -S$150,000 |
| Net Sale Proceeds | S$70,000 |
How Much SHB Cash Bonus Will I Receive?
The size of the SHB cash bonus is based on the net sale proceeds as well as the amount contributed to one's CPF Retirement Account. Those that use their net proceeds to top-up their CPF Retirement Account by at least S$60,000 will be eligible for the maximum SHB of S$30,000. On the other hand, those that top-up their CPF RA by less than S$60,000 will earn S$1 for every S$2 that they contributed to their Retirement Account.
| Net Sale Proceeds | CPF Top-up Requirement | Proceeds Kept in Cash | SHB Cash Bonus |
|---|---|---|---|
| Up to S$60,000 | All net sale proceeds | S$0 | S$1 for every S$2 top-up |
| S$60,000-S$160,000 | S$60,000 | S$0 - S$100,000 | S$30,000 |
| S$160,000+ | S$60,000 + Top-up to Full Retirement Sum | S$100,000 + any remaining after further top-up | S$30,000 |
Who Is Eligible for the Silver Housing Bonus Scheme?
The SHB is available to homeowners who are Singapore Citizens and at least 55 years old. Additionally, the gross monthly household income of eligible applicants must be S$14,000 or less.
| Silver Housing Bonus Scheme Eligibility Criteria | |
|---|---|
| Age | 55+ years old* |
| Citizenship | Singapore Citizen* |
| Income | S$14,000 or less |
| Existing Property | HDB Flat (Met Minimum Occupation Period); private property (annual value of S$13,000 or less); no concurrent ownership of multiple properties |
| New Property | 3-room or smaller; smaller room type than the last sold property; purchase price does not exceed the selling price of the current home |
| Sale & Purchase | Book new HDB flat or apply for resale HDB flat before or within 12 months of selling current home |
| * at least one homeowner must meet these requirements | |
In terms of the property being sold, eligible applicants must be selling an HDB flat and have met the minimum occupation period for resale (5 years), or be selling a private property with an annual value of S$13,000 or less and not own any other properties.
Eligible households will be buying properties that are smaller than their current home, are no larger than a 3-room flat (excluding 3-room terraces), and cost less than the selling price of their current home. Finally, eligible homeowners must book a new HDB flat or complete an application to purchase a resale flat either before or within 12 months of selling their existing property.
Silver Support Scheme
Another benefit of downsizing through the Silver Housing Bonus programme is that it helps households earn more through the Silver Support Scheme. Those who qualify for this scheme will automatically receive a cash supplement each quarter (amount listed in the table below). To be eligible, you must be a Singaporean citizen aged 55 and older, live in an HDB flat with 5 or fewer rooms, and have a total CPF contribution of S$140,000 or less. Moreover, your monthly income cannot exceed S$1,800.
Quarterly Payout for Silver Support Scheme
| HDB Flat Type | Household Income < S$1,300 | Household Income S$1,300 < S$1,800 |
|---|---|---|
| 1-2 Room | S$900 | S$450 |
| 3-Room | S$720 | S$360 |
| 4-Room | S$540 | S$270 |
| 5-Room* | S$360 | S$180 |
| * Reside in, but do not own a 5-room HDB flat |
SHB Frequently Asked Questions
Unlike the SHB, the Lease Buyback Scheme (LBS) allows older (65+) homeowners stay in their homes and sell a portion of their remaining leases to the Housing & Development Board. On the other hand, all Singaporeans are considered for the Silver Housing Bonus, and those who meet the criteria will automatically receive payments every quarter.
Yes. However, according to the Housing & Development Board website, the booking of a new HDB flat or application for a resale flat must occur within 12 months of completing the sale of the existing property. For more information, please contact the Housing & Development Board at their toll-free hotline: 1800-555-6363.
Unfortunately, households with S$0 net sale proceeds are not eligible to receive the Silver Housing Bonus. This is because the SHB aims to encourage households to top-up their CPF and those without net sale proceeds will be unable to do so. However, individuals meeting the aforementioned requirements can still benefit from thee Silver Support Scheme.
No. The Housing & Development Board requires that the CPF top-up for the SHB comes from the homeowner's net sale proceeds.
Yes. Homeowners are eligible for the SHB even if they apply for a home loan for their new flat. We strongly recommend that you compare the best home loan offers currently available before applying for a mortgage.
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Stephen Lee is a Senior Research Analyst at ValueChampion, specializing in insurance. He holds a Bachelor of Arts degree in International Studies from the University of Washington, and his prior work experience include risk management and underwriting for professional liability and specialty insurance at Victor Insurance. Additionally, Stephen is a former US Peace Corps Volunteer in Myanmar (serving between 2018-2020), where he continues to provide business development consulting services to HR companies in Asia Pacific.