With the HDB tightening the rules for subletting their flats, it is now harder for Permanent Residents to rent out their HDB flats for long periods of time. Instead of a period of three years, Singapore PRs can only sublet their flats for a one-year period. While they can re-apply for approval to sublet their flats after that period is up, the total allowable period cannot exceed five years. This makes HDB’s stand on investment and rental gains quite clear – don’t use our flats for that!

Of course, that got us to ponder motives and directives of HDB. Why not go all the way with that line of thinking, and totally disallow renting out of HDB flats by Permanent Residents? After all, these are subsidised housing units, meant for Singaporeans who are truly in need of a roof over their heads. If some people are playing the investment and rental game, should the government really be susbsidising their business efforts using public housing monies?

Now there might be a few exceptional cases, for example a Permanent Resident who needs to leave to take care of an aged or sick relative in his mother land, but with the full intention of returning after the illness has passed. Without the ability to sublet, he only has two (official) choices; sell the unit, or leave it vacant. Unofficially, however, he could allow a trusted friend or family to stay there. From the perspective of this person, none of these options might be palatable or possible. However, from another view point, this person is - by refusing to sell, or retaining the property to generate income – hogging a valuable asset while he is away . A valuable asset that could be used to house a family that really needs it. In fact, how can we ensure that no Permanent Resident, who might own multiple bungalows overseas, comes here simply to purchase subsidised housing for capital gains and rental income? If the source of their wealth is overseas, then the Singapore government will have no way to track that. Frequency of stay and immigration records may be able to raise flags that someone should not be buying subsidised housing here, but even that is not reliable.

And that brings us to the point of why Permanent Residents are even allowed to own subsidised housing in the first place. We should welcome them as valuable contributors to our economy, and we should provide them a comfortable stay while they are here. But these can be accomplished without handing over our valuable land resources! A robust, comprehensive and efficient rental scheme, overseen by HDB, will take care of these accomodation issues nicely. For starters, HDB should maintain a cache of residential units just for this purpose. That’s what subsidised housing should be used for, and not for investment and capital gains by greedy individuals. In fact, going with that theme, one might even consider barring Singapore Citizens from subletting their subsidised flats. If you no longer need to stay in it, sell it to someone who does!


  One Response to “Cashing In On Hand Outs”


    If you leave the 300K in the CPF, in 20 years time, your real buying power for that money is hvlaed to 150k. If you use it to buy a HDB, your 300K investiment will keep up with inflation and by that time you can sell it for 600K. Also you don’t need to carry your sack of money to the HdB to buy. Pay as you earn mah. TSk, tsk.

 Leave a Comment