What Happens When My HDB Lease Expires?

Updated: Oct 14


There are two major types of property ownership in Singapore – freehold and leased. Freehold properties can either be fee simple, life estate, or an estate in perpetuity. Properties that are leased are either of a 99-years or 999-years lease.


Owners of 999 years leasehold properties will rarely need to worry about their lease as the property can last for a few generations. However, this is not the case for properties with a 99 years lease.


Note: Find out HDB’s lease start date, duration, remaining lease, and more here!


According to Data.Gov.Sg, the estimated percentage of Singaporeans living in HDB flats in 2018 is 81%. These HDB flats have a lease of 99 years. When the lease is up, the ownership of the properties will be reverted back to the owner, Housing Development Board (HDB). Simply put, the value of the HDB flats will eventually be $0.


In 1955, Selective En bloc Redevelopment Scheme (SERS) was introduced to HDBs that were reaching the end of the 99-years lease. Estates that are over 40 years old have a higher chance of SERS, though there can be no guarantee that it will occur.



Selective En bloc Redevelopment Scheme (SERS)


SERS is a programme which renews the older housing estates, allowing residents to move into a new flat with 99-years lease. At the same time, owners of SERS flats can also continue to live near their current neighbours and will receive compensation and rehousing benefits.


Till date, 77 sites have undergone SERS and 4 are currently in progress.



SERS Compensation


Owners of HDB flats that are selected for SERS will be given a sum of compensation that is equivalent to the market value. The amount of compensation will be calculated as follows:


SERS compensation – property tax payment – outstanding home loan – refund of CPF amount used = balance compensation.


Factors such as past renovation works, storey height, flat size, and flat facing will come into consideration as well.



SERS Grant


Getting a replacement flat from HDB will grant the SERS flat owner a grant, credited into CPF ordinary account (OA). It can only be used to offset the cost of the replacement flat and is only eligible to the following household status:


  • First and second timers

  • Non-Citizen Spouse Scheme households

  • Singapore Permanent Resident (SPR) households

  • Remaining singles and Joint Singles Scheme households

  • Single Singapore Citizen (SC) Scheme households

  • Third-timers and households who have had SERS benefits before

  • Private property owners

Owners affected by SERS will be prioritized when choosing their replacement flats. In addition, eligible households may apply for Additional CPF Housing Grant (AHG) or Special CPF Housing Grant (SHG) to get further financial assistance when buying a replacement HDB flat.


More info here.


Is SERS guaranteed?

As the name suggests, SERS is selective. There is no guarantee that the government will select all of the HDBs that are nearing the end of the 99-years lease. Selection of SERS estates and the pace of it depends on the site’s redevelopment potential and the availability of replacement HDB flats.


As such, property buyers have to take into consideration the number of years left on the lease before making a purchase. Most of the banks tend to reject home loan applications for properties with less than 60 years left as well.


Contact Mortgage Consultancy now to get the smartest financial bank loan advice specifically for your home. We are able to provide more than 100 loan packages from 16 banks for you to compare and choose from! Feel free to contact us at +65 8556 5271 so that we will be able to help you make an informed decision, suited to your needs.

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