Ang Mo Kio SERS: How to read guide stating extra S$187,000 cash needed for new replacement flat

Note that this resident has an outstanding housing loan of S$258,000.

Lee Wei Lin | June 17, 2022, 10:55 AM

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Another resident under the Selective En bloc Redevelopment Scheme (SERS) project in Ang Mo Kio has shared the financial guide handed out by the Housing & Development Board (HDB).

Photo via Leong Sze Hian.

This comes after CNA spoke to two groups of residents troubled by the possibility of having to come up with additional funds for their replacement flats.

Estimated S$187,766 cash payment required

A financial guide given to a resident affected by the Ang Mo Kio SERS project announced two months ago, made its way to blogger Leong Sze Hian, who shared it online.

The guide revealed that the new replacement four-room flat is estimated to cost S$564,766 after taking into account its purchase price, cost of optional component scheme, along with stamp and conveyancing fees.

The estimated total compensation for the existing 43-year old four-room flat is S$450,000.

The guide also showed that the balance SERS compensation comes up to S$87,000.

This is after deducting a S$258,000 outstanding housing loan with OCBC, S$74,000 in CPF refund with accrued interest, S$30,000 resale levy, and S$1,000 retention sum.

The estimated cash payment of S$187,766 was derived after deducting the balance SERS compensation, S$30,000 SERS grant, S$74,000 CPF refund and S$186,000 CPF savings from the cost of the replacement flat.

What post about financial guide implied

In the caption of his Facebook post that shared the financial guide, Leong claimed that the resident told him that "the bulk of residents staying here are elderly and most are in their 50s, 60s, 70s.. many are retired or semi-retired".

Leong added that these elderly residents "thought that they could live out the rest of their lives in their existing HDB surrounded with good neighbours and familiar environment" and "did not expect to be worrying about finance and putting more financial burden to family members (sic)".

How to parse the info in financial guide

However, the financial guide shared is unlikely to belong to someone who fits the elderly resident profile that Leong mentioned.

The resident has an outstanding bank loan amount of S$258,000, which makes it unlikely that they moved in when the HDB block was first completed in 1979.

This is further supported by the S$30,000 resale levy that the resident has to pay.

In response to Mothership's queries, HDB shared:

"SERS flat owners are exempted from paying the resale levy if the SERS flat is their first subsidised flat. However, those who have previously sold a subsidised flat elsewhere and undertaken to defer their payment of resale levy will have to pay the levy before they collect the keys to their new flat. This is because they have enjoyed and realised the subsidy from the disposal of the previous subsidised flat. Nonetheless, special support is provided with the resale levy capped at S$30,000."

Final compensation amounts will only be confirmed at the end of the year

HDB also confirmed that the figures shared with residents are not set in stone, as a private valuer will assess the compensation amount by taking into account transacted prices of comparable resale flats and remaining lease.

The final figures will only be confirmed in the fourth quarter of 2022.

Residents are also given the option to choose the size of their replacement flat, with HDB confirming that there are two types of four-room flats available -- 80sqm and 90sqm respectively.

Home owners can also choose to buy a new flat at the designated replacement site, apply for a flat elsewhere offered under HDB’s Build-To-Order (BTO) or Sale of Balance Flats (SBF) exercises with priority allocation, or sell the flat with rehousing benefits.

More importantly, by the time home owners are estimated to move to their replacement flats at the end of 2027, they will swapping their decaying 51-year lease with a fresh 99-year one.

Ang Mo Kio SERS

A total of 606 flats located in blocks 562 to 565 Ang Mo Kio Avenue 3 are affected, in an effort to renew the 43-year-old Ang Mo Kio blocks.

This is the first announcement of a SERS project in nearly four years.

Owners have been invited to purchase new flats at Ang Mo Kio Drive, due to be completed in the third quarter of 2027, at subsidised prices.

What's SERS?

According to HDB, the programme "renews older housing estates", where those living in older HDB flats are given the option to move to one with a 99-year lease in a nearby location.

The first SERS project was announced in August 1995, and a total of 77 projects in locations such as Toa Payoh, Tiong Bahru, Ang Mo Kio and Clementi have been completed to date.

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Top photo from Google Maps street view.