Main Upgrading Programme (MUP)
Cost Sharing Ratios

Reduction of Subsidy and Payment of Upgrading Levy for Singapore Citizens Whose Second or Subsequent Flat Undergoes MUP

Singapore citizens will continue to enjoy the current level of government subsidies for the upgrading of their first flat that undergoes MUP. Details of the current subsidies are shown at Annex A. However, they will get a lower subsidy from the Government and will have to pay an upgrading levy when their second or subsequent flat undergoes MUP.

• Reduced Subsidy from Government

The cost-sharing portion to be paid by the Government will be reduced substantially. This means that Singapore citizens will pay between $19,100 and $21,800 (or 45% to 51% of the total cost) for the standard package and between $36,500 and $44,000 (or 54% to 66%) for the standard-plus package which includes a space-adding item. Annex B gives the details of the revised costs payable.

• Payment of Upgrading Levy

When they sell their second or subsequent flat which is to undergo upgrading after the announcement of the successful poll, they will have to pay an upgrading levy set at 10% of the resale price.

The one who is lessee at the time between the announcement of a successful polling and the date of billing for the upgrading cost will be considered as one who has already enjoyed one upgrading subsidy.

Withdrawal of Subsidy for Singapore Permanent Residents (SPRs)

Currently, SPRs participate in the poll for upgrading and enjoy the same subsidy as Singapore citizens. They also pay the same subsidised interest rate in instalments for upgrading costs.

With immediate effect, SPRs will not be allowed to poll for upgrading. HDB will amend the Housing & Development Act and the Polling Rules to exclude SPRs from having to participate in the poll. 7. They will also be required to pay the full cost of upgrading if their precincts voted for it. Based on current estimates, the full upgrading cost payable is $42,400 for the standard package and $67,200 for the standard-plus package.

If they do not wish to pay for the full upgrading cost, they may sell their flats to HDB at market price as at the date of announcement of the successful poll. If SPRs sell their flats after the announcement of the successful poll and before the date of billing for the upgrading cost, they will have to pay an upgrading levy set at 10% of the resale price. After the date of billing, those who opt to pay the full upgrading cost in instalments can do so, but they will have to pay market interest rate.

SPRs who subsequently become Singapore citizens can claim reimbursement for the upgrading subsidy. To be eligible, SPR lessees must obtain their citizenship within one year after the date of billing. As the number of SPRs is small, the measure will not affect many present residents.

Transitional Measures

The revised policy on the reduced government subsidies for upgrading and the payment of the upgrading levy for Singapore citizens, and the payment of the full upgrading cost by SPRs will apply to lessees whose flats come under the Batch 7 precincts, where polling is scheduled for Oct/Nov this year, and future batches after this.

For precincts where polling has already been completed, the following will apply:

• The share of the upgrading costs for both Singapore citizens and SPRs will remain unchanged. This is to ensure that lessees who voted based on the estimated costs indicated at the time of polling will not be suddenly burdened by the higher costs,
• Singapore citizen lessees will be considered as having enjoyed one upgrading subsidy. Hence, citizen lessees who own a second or subsequent flat in these precincts will also have to pay the 10% upgrading levy if they sell their flats, and
• SPR lessees will be required to pay the 10% upgrading levy if they sell their flats.

The MUP was conceived as a scheme to help raise the standard of living of HDB residents, and not to allow quick profits for speculators through the buying and selling of upgraded flats. The measures announced will serve to curb such speculation. If Singapore citizens and SPRs were to indulge in such speculation to reap monetary gains and move from their upgraded flats every few years, this will defeat the important objective of the MUP in preserving community ties among the residents. More importantly, the Government wants to ensure an equitable distribution of the upgrading subsidies, and HDB home owners should not get more than one bite of the cherry.