There’ll be Stricter Penalties for Couples Who Don’t Select a BTO Flat After a Successful Application

Sometimes, couples apply for BTO to try out their luck. 

When their application is successful, some fail to select a flat for many reasons.

Unfortunately, it seems that couples can no longer play play.

Stricter Penalties for First-Time BTO Applicants Who Don’t Select a Flat

Minister of National Development Desmond Lee announced on 2 March that first-time applicants who don’t select a Housing Board Build-to-Order (BTO) flat despite making a successful application would face stricter penalties from August 2023.

Currently, those who do so are only penalised if they don’t select a BTO flat twice, where they will be considered second-timers for a year during the BTO balloting exercise. 

However, from August 2023, first-timers who fail to choose a flat once will be penalised.

No more second chances.

These applicants will be considered second-timers for a year in the computer ballot.

The penalties are even stricter for second-timers who accumulate one non-selection count. 

These applicants must wait a year before they can apply for a BTO flat again.

Reason for the Stricter Penalties

According to the Ministry of National Development (MND) and the Housing Development Board (HDB) in a press release, this change ensures the efficient allocation of BTO flats.

This is so those who need a home can secure housing more quickly.

According to the agencies, about 40% of BTO applicants don’t book a flat when they’re given the opportunity to do so.

These applicants either decline to book a flat or don’t attend their selection appointments.

Why Some Successful BTO Applicants Decline to Select a Flat

In November 2022, TODAY reported that youths struggling with mental health cited the cost of living as a significant stressor.

Housing concerns were amongst the top five expenses that youths cited as a source of stress, with 41% citing housing as their primary concern.

With that said, why are people passing up the opportunity for a BTO flat?

Well, it isn’t that easy.

Regarding the issue of non-selection, Mr Lee said, “There is probably a range of reasons. For some, the remaining flats may be out of their budget. For others, they might be considering other housing options or prefer flats with specific attributes.”

He added, “Understandably, some would rather give up the opportunity to select a flat now and wait longer for a better flat. But whatever the reason, such applicants do crowd out other home buyers who may have more pressing needs.”

However, MND and HDB acknowledged that there might be instances when applicants are left with minimal options when asked to book their flats.

Thus, HDB will waive the non-selection count for applicants with ten or fewer BTO flats available to select from.

HDB will also make an exception for applicants with five or fewer Sales of Balance Flat (SBF) flats to choose from. 

Regarding the applicants who turn down the offer to select a flat due to unforeseen changes in circumstances since applying for BTO, Mr Lee said that HDB may waive the non-selection count in the event of extenuating circumstances.

The agencies cautioned, “HDB flats are heavily subsidised and in demand. We strongly encourage all applicants to carefully consider when they should apply for a new flat, and book a flat when invited to do so.”

What’s the Hoo-ha?

These measures are a big deal because first-time family applicants have a better chance of balloting.

While first-time family applicants get two ballot chances, second-time family applicants are only given one.

In addition, up to 95% of HDB’s BTO or SBF flats are reserved for first-timer families. 

Thus, if you’re a first-time applicant who doesn’t choose a flat despite a successful application, you could be taking the opportunity away from someone who needs the flat more.

Another big hoo-ha regarding BTO flats is those who choose to use them as a money-making venture.

In November 2022, property listings of “vacant” BTO flats being sold on the open market prompted HDB to investigate the situation.

As it turns out, buying a BTO flat and not living in it for five years is illegal, let alone selling it as “almost brand new” on the resale market. 

No wonder MND and HDB are trying to implement measures to ensure that those who need BTO flats get them more efficiently.

New Initiative to Help First-Time Family Applicants

To ensure that those who need BTO flats get a flat, the Government has developed a couple of initiatives.

Starting from the BTO exercise in August this year, first-time family applicants with children or married couples aged 40 and below will get three ballot chances.

That means they will enjoy higher priority in BTO and SBF exercises.

Currently, the first-timer category covers a diverse range of applicants, including those who already have a house but have yet to benefit from housing subsidies.

This new priority category, the First-Timer (Parents & Married Couples) category, or FT(PMC), makes up 10% of all first-time family applicants.

To be eligible for the FT(PMC) category, here are the criteria:

• Families with at least one child aged 18 or below or married couples aged 40 and below
• Have never owned residential property before
• Was not given a chance to book a BTO or SBF flat by HDB in the past five years

The current Parenthood Priority Scheme will be expanded to include FT(PMC) applicants under a new name: the Family and Parenthood Priority Scheme. 

Up to 40% of BTO flats and up to 60% of SBF flats will be reserved for such applicants.

Furthermore, FT(PMC) applicants for four-room and smaller BTO flats in non-mature estates will be prioritised for flats set aside under the Family and Parenthood Priority Scheme.

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Another Initiative to Help First-Time Family Applicants

Besides FT(PMC), HDB will offer more BTO flats in mature estates in 2023.

In a Facebook post on 27 February, Mr Lee said this initiative comes in response to feedback from young couples wishing to live near their parents.

However, Mr Lee noted that it would take some time to prepare these sites as mature estates already have existing residential blocks, facilities and transport infrastructure.

He said, “More care and planning are needed to ensure that works are carried out safely, in line with regulatory requirements, and with minimal disruption to the community living nearby.”

These flats in mature estates are part of the 23,000 BTO flats that HDB intends to launch in 2023.

For instance, mature estates like Bedok and Serangoon will get new HDB flats for the first time in several years.

1,960 flats will be launched across both estates during the May BTO exercise.

Housing System

Though not everyone may be happy with the changes, Singapore’s housing system has improved.

Besides BTO flats, our current housing system comprises Short Waiting Time flats, the Sale of Balance flats, and units offered under open booking.

Mr Lee said, “The current system may not always work perfectly, and we will continue to adjust and calibrate along the way.”

“But it does strike a reasonable balance across multiple objectives – fairness and efficiency in allocating flats, fiscal prudence, and responsiveness to demand.”