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CPF Usage

Updated: Sep 13, 2021

"Do you know if you purchase a resale residential property with remaining lease which is insufficient to cover the youngest buyer until 95 years old, you are unable to fully use CPF and the loan will also be lower to purchase the house?"

Image Source: Straits Times

With effect from 10 May 2019, CPF members above the age of 55 will need to have a property with sufficient remaining lease to cover them until at least the age of 95, before they can withdraw their CPF savings above the Basic Retirement Sum (BRS). Beside using CPF above BRS, if a property's remaining lease does not cover the youngest buyer up to 95 years old, the buyer is not able to fully utilize their CPF to purchase the house. Instead, they are only able to use prorated amount. For example, if the property's remaining lease is only able to cover the youngest buyer to 85 years old, the buyers can only use CPF to pay a maximum of 80% of the property purchase price. The buyers are not able to loan this amount as well and have to pay the shortfall using cash only!

Image Source: Straits Times

As a main bulk of buyers are newly married couples or singles who have just turned 35 years old, due to this regulation, it is expected that residential property prices will greatly depreciate as the remaining lease runs down since most young people are not able to fork out such a large amount of cash for downpayment!

Looking to purchase your new home but unsure what is the ideal age of house to purchase? Contact Chester @ 8883 8301 for your free consultation.


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