CPF usage have been updated in May 2019 to provide more flexibility for Singaporeans to buy a home for life. This modification of ruling will also make it harder for Singaporeans and PR to use their CPF for second property purchase.
The rule now focuses on whether the remaining lease of the home can cover the youngestest buyer until at least the age of 95. If so, property purchasers will be allowed to use maximum CPF usage.
There will still be a minimum lease requirement for the use of CPF for property purchases. This will be lowered to 20 years from the existing 30 years. Moreover, the amount that is needed to set aside for Basic Retirement Account will increase yearly..
1. Use of CPF Savings for multiple properties purchase
2. Use of Retirement Account Savings for property purchase
The remaining lease of the property needs to cover the buyer until at least the age of 95 for the buyer to use Retirement Account (RA) savings above the Basic Retirement Sum to pay for the property.
In summary, investor buyers used to be able to set aside the Basic Retirement before he can use the excess savings in his OA for 2nd property. Now, if buyer do not have property that can cover him til age 95, he has to set aside the FULL RETIREMENT SUM before he can use the excess savings in his OA for 2nd property.
Implication: Valuation of private property will have a higher tendency to depreciate once it it’s the 75 year mark. Used to be between 60-70 years.
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