Table of Contents
What are Prime Location Public Housing (PLH) Model and Its Effect
We saw a record number of HDB flats changed hands in the resale market for at least $1 million in 2021. Many of these lottery effects and excessive windfall gain transactions were mainly located in the prime location when the HDB flats sold on the open market.
On 27th Oct 2021, the Ministry of National Development (MND) and the Housing & Development Board (HDB) have announced the details of the Prime Location Public Housing model, in short, the PLH model. The idea behind this model is to ensure the future new public housing located in the prime, central locations like Greater Southern Waterfront or city centre will remain affordable, accessible, and inclusive for Singaporeans. The HDB will launch the first PLH model project in Nov 2021, in the BTO sales exercise for Rochor’s new flat.
What exactly are the key measures under the New Prime Location Public Housing (PLH) Model? Let’s take a look here
Purchasing a New PLH Flat
On top of the substantial subsidies provided for BTO flat, there will be additional subsidies when purchasing PLH flat as prime locations generally command higher market values. As such, flat prices remain affordable for a broader range of Singaporeans.
As mentioned, it is additional subsidies that other non-PLH BTO owner is not entitled to; thus, the PLH flat owners will have to pay a percentage of the resale price of the flat to HDB as a means to recover the additional subsidies. The subsidy clawback percentage will be announced in the Nov 2021 BTO sales exercise.
The priority quotas for flat allocation under the Married Child Priority Scheme (MCPS) will also be reviewed and adjusted depending on the location for flats under the PLH model. This allows public housing in prime central areas to be more inclusive, providing more opportunities to Singaporeans whose families do not live near to also live in these neighborhoods.
To be qualified to purchase a PLH model flat, you must have an eligible family nucleus. In addition, you are subject to an income ceiling of $14,000 or $21,000 if you purchase with an extended or multi-generation family. Lastly, you must not own or have an interest in private property and have not disposed of any in the last 30 months.
Purchasing a Resale PLH Flat
The MND and the HDB also look beyond the initial BTO purchase to ensure it remains inclusive, accessible for Singaporeans in the Resale market. Thus the resale PLH model flat also follows the exact requirement as of the BTO sale launch exercise.
Singles above 35 years old are not eligible to purchase PLH flat from the BTO sales launch or resale market.
After Purchasing of a PLH Flat
The PLH flat owner will have to fulfill 10 years Minimum Occupation Period (MOP), which is 5 years longer than any other BTO launch.
The rental conditions were also tightened where homeowners cannot rent out the whole units even after MOP; instead, only room rental is permitted. The tightening rental conditions apply to both the PLH BTO flat and the PLH resale flat.
The PLH flat is only applicable to future projects in the prime, central location such as the city centre and greater southern waterfront area. It does not affect existing public housing.
What could be the potential long-term side effects of the PLH model?
Making money from such prime location homes could get more challenging due to the extended MOP period of 10 years in the PLH model flat; this could help temper the demand and dampen the resale price in the future.
The restriction for the single scheme to purchase the PLH model flat clearly shows that families are prioritized for the new PLH model home.
On the other hand, the resale flats, new or resale private homes nearby PLH model flats could see a slight boost in demand as younger buyers with aspirations of upgrading to private homes could deter and turn to these alternatives due to the extended MOP period, the subsidy clawback, and the restricting to rent out the whole unit after MOP.
With the whole unit rental restriction for PLH flats, the rental yields of the nearby properties may strengthen as there isn’t an increase in the number of the entire apartment for rent.
The pros and cons of PLH versus other housing choices
With the introduction of the Prime Location Housing (PLH) flats, the landscape has evolved further, adding another layer of choice for potential homeowners.
We will explore the minimum occupation period (MOP) required for each property type, eligibility criteria for buyers, and income ceilings for both purchasing from HDB and the resale market. Additionally, we will examine the rental options available in the open market, the impact of private property ownership, and the various government housing grants and subsidies applicable to each property type.
Further, we will discuss the resale levy and any clawback subsidies upon sale, providing a comprehensive view of the financial implications. Lastly, we will outline the estimated waiting period before owners are allowed to invest in private properties, offering insights into long-term planning and investment potential.
With this guide, the prospective home buyer can weigh the pros and cons of each property type through these comparative points.
Minimum Occupation Period
| Property Type | Minimum Occupation Period (MOP) |
|---|---|
| Prime Location Housing (PLH) Flat | 10 years |
| BTO Flat | 5 years |
| Resale Flat | 5 years |
| Executive Condominium (EC) | 5 years |
| Non-landed Private Home | None |
Eligibility to buy
| Property Type | Eligibility to Buy |
|---|---|
| Prime Location Housing (PLH) Flat | Family nucleus with at least 1 SC |
| BTO Flat | Family nucleus or Single with at least 1 SC |
| Resale Flat | Family nucleus or Single with at least 1 SC |
| Executive Condominium (EC) | Family nucleus with at least 1 SC or Joint Singles (All SC) |
| Non-landed Private Home | Open to all |
Incoming Ceiling
| Property Type | Buy from HDB | Buy from Resale |
|---|---|---|
| Prime Location Housing (PLH) Flat | $14,000 per month | $14,000 per month |
| BTO Flat | $14,000 per month | None |
| Resale Flat | NA | None |
| Executive Condominium (EC) | $16,000 per month | None |
| Non-landed Private Home | None | None |
Rental Options
| Property Type | Rental Options |
|---|---|
| Prime Location Housing (PLH) Flat | Can only rent out room(s) after MOP |
| BTO Flat | Can rent out whole flat after MOP |
| Resale Flat | Can rent out whole flat after MOP |
| Executive Condominium (EC) | Can rent out whole unit after MOP |
| Non-landed Private Home | No restrictions |
Private Property Ownership
| Property Type | Private Property Ownership |
|---|---|
| Prime Location Housing (PLH) Flat | Must not own or have an interest in a private or overseas property and have not disposed of any in the last 30 months |
| BTO Flat | Must not own or have an interest in a private or overseas property and have not disposed of any in the last 30 months |
| Resale Flat | Allowed, but must dispose of private or oversea property within sixth months of buying the resale flat |
| Executive Condominium (EC) | Must not own or have an interest in a private or overseas property and have not disposed of any in the last 30 months |
| Non-landed Private Home | Allowed |
Government Housing Grants & Additional Subsidy
| Property Type | Housing Grants | Additional Subsidy |
|---|---|---|
| Prime Location Housing (PLH) Flat | Yes (depend on income) | Yes |
| BTO Flat | Yes (depend on income) | No |
| Resale Flat | Yes (depend on income) | No |
| Executive Condominium (EC) | Yes (depend on income) | No |
| Non-landed Private Home | NA | NA |
Resale Levy
| Property Type | Resale Levy |
|---|---|
| Prime Location Housing (PLH) Flat | Payable (depends) |
| BTO Flat | Payable (depends) |
| Resale Flat | NA |
| Executive Condominium (EC) | Payable (depends) |
| Non-landed Private Home | NA |
Clawback Subsidy Upon Resale
| Property Type | Clawback Subsidy Upon Resale |
|---|---|
| Prime Location Housing (PLH) Flat | Yes (depends on initial additional subsidy) |
| BTO Flat | No |
| Resale Flat | No |
| Executive Condominium (EC) | No |
| Non-landed Private Home | NA |
Estimated Waiting Period Before Allowed to Invest in Private Properties
| Property Type | Est. Waiting Period Before Allowed to Invest in Private Properties |
|---|---|
| Prime Location Housing (PLH) Flat | Estimated After 15 years (5 years construction + 10 years MOP) |
| BTO Flat | Estimated After 10 years (5 years construction + 5 years MOP) |
| Resale Flat | After 5 years (MOP) |
| Executive Condominium (EC) | After 5 years (MOP) |
| Non-landed Private Home | Anytime |
In summary
The Prime Location Public Housing (PLH) model is to prevent the “lottery effect” when owners resell their flats on the open market. PLH model ensures that new public housing built in prime, central locations like the city centre and the Greater Southern Waterfront will remain affordable, accessible, and inclusive for Singaporeans.
The PLH rules include:
- 10 years Minimum Occupation Period (MOP).
- Clawback additional subsidy upon resale.
- Subject to income ceiling of $14,000 or $21,000 if purchase with extended or multi-generation family. It applies to future resale PLH flats as well.
- Fewer flats may be set aside for married child priority scheme.
- No subletting of the whole unit even after MOP. Only room rental is allowed.
- Singles above 35 years old are not eligible to buy PLH model flat from both HDB or resale open market.
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