Everything About the New HDB Classification Announced in PM Lee’s National Day Rally 2023

If you’re an HDB flat owner or a BTO buyer, you might be feeling anxious about this year’s National Day Rally, especially since PM Lee mentioned there would be new changes. Owners in non-mature estates might be wondering if their estates will finally be upgraded to the “matured” status. Others might be curious about potential changes to the income ceiling.

However, the focus is on something else entirely.

Here’s a comprehensive look at the overhaul of public housing classification in Singapore.

Everything About the New HDB Classification Announced in PM Lee’s National Day Rally 2023

Soon, HDB will phase out the decades-old labels of “mature” and “non-mature” estates, introducing a new classification system in their place.

I can almost hear the reactions from residents in Punggol and Sengkang, many of whom might be reaching out to their property agents to sell their flats at a significant profit.

In fact, the entire new classification is mainly to prevent that: getting a windfall from your HDB flats.

From the latter half of 2024, Build-to-Order (BTO) projects will be categorized into three distinct classes: Standard, Plus, and Prime.

Currently, there are only Standard (the usual BTOs) and Prime (the PLH).

Each category will come with its unique set of resale conditions. However, it’s crucial to note that these new classifications will not affect existing flat owners or flats that have already been booked.

Why the New Categories?

Newer projects, especially those situated in older, well-developed regions with numerous amenities, are expected to be more sought-after.

An example is the upcoming 5,000-flat development at Mount Pleasant, previously the site of the Police Academy. Such centrally located projects will naturally come with a higher price tag.

Also, the distinction between mature and non-mature estates is becoming less clear. Some projects in non-mature estates are even surpassing the popularity of those in mature estates, so we would no longer be calling states mature or non-matured.

Details of the Categories

Standard Flats

These flats will retain the current subsidies and restrictions applied to all BTO flats—basically, any flats without the “Plus” or “Prime” tag would be considered standard. This includes a five-year minimum occupation period and standard subsidies. MND and HDB mentioned that Standard flats would continue to make up the majority of the housing supply.

Plus Flats:

This is the new category you should know about.

Location: These flats will be situated in more desirable locations within each region, such as in proximity to MRT stations and town centres, even it’s not in a central location. The upcoming Bayshore project near East Coast Park, which is close to two MRT stations, a future shopping mall, and Siglap Community Club, serves as an example.

Conditions: Owners of Plus flats will have a 10-year minimum occupation period. If they decide to sell, they must return a portion of the resale price to HDB, reflecting the extra subsidies they received.

Purpose: The extended occupation period aims to attract long-term residents and deter those looking to quickly sell and move. “This will help mitigate windfall gains and ensure equity with other flat owners who do not enjoy these additional subsidies,” stated MND and HDB. The introduction of the Plus category, with its stricter sale conditions, is expected to help regulate the selling price.

Resale Conditions: Plus flats will have stricter resale conditions, including an income ceiling for potential buyers. The specifics are yet to be disclosed. The clawback for Plus flats is anticipated to be less than that for Prime flats due to typically lower additional subsidie

Prime Flats:

Prime BTO projects will maintain the conditions set by the Prime Location Housing scheme introduced in November 2021. This includes a 10-year minimum occupation period and a clawback clause. First-time owners must repay a portion of the subsidies upon selling.

Furthermore, the flat can only be sold to buyers who meet BTO eligibility conditions, which include an income ceiling of S$14,000 for couples or families and S$7,000 for singles.

Good News for Singles

Singles will now have more options when it comes to housing. With no mature or non-mature estates in Singapore now, they can apply for two-room Flexi BTO flats in all locations, a change from the current restriction to non-mature estates.

In the resale market, singles can purchase a Standard or Plus flat of any size and two-room Prime flats. This is a significant shift from the current rule where singles are not allowed to buy a Prime Location Housing resale flat.