A pointed June 24 Straits Times forum letter asked the Housing and Development Board (HDB) a few simple, straight-forward questions that did not have ready, easy answers:

Are HDB residents tenants or owners?

The report on the homes in Geylang Lorong 3 reaching the end of their leases highlights the issues surrounding leasehold properties (Govt taking back 191 homes in Geylang when lease ends; June 21).

While applying to rent out my HDB flat, I noticed that the Housing Board referred to me as a "tenant", and my potential tenant as a "sub-tenant".

I have paid up my HDB flat fully, and the title deed has been left in the safe possession of the HDB who, it appears, is my landlord.

Is that correct or should the wording of these documents be updated?

If I am an HDB tenant, why am I required to pay property tax?

Can we have some clarity on whether HDB dwellers are tenants or real home owners for 99 years?

Larry Leong

HDB's response

As expected, after a three-week wait, HDB eventually replied via the forum page on July 19 with a curt reply that left questions unanswered:

HDB buyers are home owners, not tenants

We thank Mr Larry Leong for his feedback (Are HDB residents tenants or owners?; June 24).

Purchasers of HDB flats are owners of their property.

Flat owners enjoy rights to exclusive possession of the flat during the tenure of the flat lease.

They can sell, let out, and renovate their flats, within the guidelines specified in the Lease and Housing and Development Act.

The name of each HDB flat owner is reflected in the title deed, the original of which is kept with the Singapore Land Authority, as part of the central and comprehensive record for all properties in Singapore.

This confirms his or her ownership of the property.

We would like to clarify that HDB does not use the term "tenant" to refer to those who have bought a flat, as Mr Leong had mentioned.

We use the term "tenant" to refer to those who rent public rental flats from HDB.

Lim Lea Lea (Ms)

Director (Branch Operations)

Housing & Development Board

Are you a HDB tenant or owner?

Leaving aside the issue of whether HDB addresses those who have bought a flat as "tenant", the real question of why property taxes ought to be paid remains unanswered, or at the minimal, unsatisfactorily addressed.

But we just need to look back at the hullabaloo in March 2017 to understand where Singaporean HDB-dwellers are coming from and why they say it is unfair for them to be paying property tax.

Property tax unfair because HDB buyers feel like they are renting

National Development Minister Lawrence Wong blogged in March 2017 about how 99-year leasehold HDB flats would return to the state once their leases are up.

Wong was trying to make the point that not all flats would be guaranteed to be picked as part of the Selective En bloc Redevelopment Scheme (SERS) when the lease runs out. As of 2017, only 4 percent of HDB flats have been part of SERS since it was introduced in 1995.

But the feeling has always been that a 99-year lease will make any buyer feel like a tenant.

As far back as January 2014, NCMP Gerald Giam had clarified HDB’s stance on lease with National Development Minister Khaw Boon Wan then.

The gist of it is based on what Minister Khaw said:

“Like all leasehold properties, HDB flats will revert to HDB, the landowner, upon expiry of their leases. HDB will in turn surrender the land to the State.“

Practical implications

The argument that HDB flats are a good store of asset value as long as buyers planned ahead and make prudent housing decisions, therefore, sounds good on paper -- but less so in reality.

This is because as long as the lease is up, HDB flats will go back to the state.

Essentially, as long as the timer on the time bomb goes off, it is going to blow. Unless, there is some form of intervention.

Because buyers of resale flats are holding on to properties that they know for certain will expire.

And buyers do not feel like owners as long as there is just no guarantee that the government of the day, a few decades down the road, will not leave Singaporeans in the lurch.

Relocation drives and redevelopment of old estates are matters that cannot be taken for granted to happen.

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As of today, there are no precedents set yet as no 99-year leases have expired.

The expectation, though, is that the HDB flats will be repossessed and the land returned when the time comes.

And even though flat owners can enjoy rights to exclusive possession of the flat during the tenure of the flat lease and can sell, let out, and renovate their flats, as HDB insists in its forum reply, whatever income derived from these living quarters at the end of the day, will already be declared and taxed.

By imposing a property tax, it is not hard to feel like HDB dwellers are facing double taxation.

And that simply isn't fair.

Top photo via Wikimedia