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Income Ceiling HDB 2024 (BTO & EC) – Breakdown & Calculations!

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Singapore’s Housing and Development Board (HDB) has provided affordable housing solutions to its citizens. For many Singaporeans, owning an HDB flat is a significant milestone and a key part of their journey to financial stability and homeownership. However, eligibility for HDB housing is subject to an income ceiling, which can be confusing.

This article will delve into the HDB income ceilings in Singapore, understanding how they work and their implications for prospective homebuyers.

What role do HDB income ceilings play in Singapore’s housing landscape?

The HDB income ceilings play a vital role in ensuring that Singapore’s public housing remains accessible and fair to citizens. These income ceilings are assessed regularly and updated to align with Singapore’s dynamic economic landscape and the evolving cost of living.

One of the main objectives of reviewing the income ceilings is to maintain the affordability of public housing for citizen households. By adjusting the income ceilings, the government aims to balance providing adequate housing assistance to those who need it while preventing those with higher incomes from disproportionately benefiting from housing subsidies.

Factors HDB consider when reviewing and adjusting income ceiling:

The review process takes into account various factors to make informed decisions about adjusting the income ceilings. One of the factors is the household incomes of Singaporeans. By analysing the income distribution across the population, the government can ensure that income ceilings are set at levels that accommodate a significant portion of the citizens without excluding those with genuine housing needs.

Furthermore, the prevailing housing market conditions are considered during the review process. By doing so, the government can ensure that income ceilings remain relevant and effective in assisting those seeking homeownership.

The government must strike a balance when adjusting income ceilings. While higher income ceilings might provide more individuals with access to subsidised public housing, there is a concern that this could lead to higher demand, driving up property prices and inadvertently excluding vulnerable lower-income households from entering the property market.

However, check the latest income ceiling guidelines at the time of housing application, as they might change over time.

What is the HDB income ceiling in Singapore?

The income ceiling was last reviewed in 2019. The income ceiling was raised from $12,000 to $14,000 for families/couples buying a new HDB flat. For families/couples buying an EC from property developers, the income ceiling was raised from $14,000 to $16,000. Please note that there are no income restrictions for purchasing resale HDB flats on the open market.

The HDB income ceilings in 2024 at a glance:

HDB flat typeIncome ceiling (2024)
BTO (Build to Order)$7,000 for 2-room flexi (99-year lease) and some 3-room flats; $14,000 for all other flats
EC (Executive Condominium)$16,000
Resale flatNone

Remember that when your income slightly surpasses the HDB income ceiling, you are in a challenging position since you are ineligible to purchase HDB flats but financially strained to afford million-dollar private housing. Such a situation creates a middle point where housing options become constrained.

How is the HDB income ceiling calculated?

The HDB income ceiling is calculated based on the gross monthly household income of all applicants and co-applicants (if any) listed in the application. If you buy the flat with your spouse listed as a co-applicant, the sum of both monthly incomes must not exceed the income ceiling.

Let’s say you earn $4,500 a month, and your wife earns $3,000 a month. That means your gross monthly household income is $7,500.

Note that your gross monthly household income includes the total basic salary with other forms of income, like bonuses, allowances, employer’s Central Provident Fund (CPF) contributions and Singapore’s social security savings plan.

It ensures that public housing is accessible to those who genuinely need affordable housing while preventing higher-income households from benefiting from subsidised housing.

For salaried employees with a variable salary:
The gross monthly income is the average of the last three months’ pay. The gross salary on your payslip is used, i.e., your salary before CPF deductions.   For instance, if you earned $2,000, $4,000, and $2,000 in the last three months, your gross monthly income would be ($2,000 + $4,000 + $2,000) / 3 = $2,666.
For salaried employees with a fixed wage:
HDB considers your most recent salary (last-drawn pay) for income assessment.   If you go on no-pay leave for up to six months, your last received pay will be considered. However, if your no-pay leave lasts for six months or longer, you are considered unemployed for assessment purposes.
For freelancers or self-employed individuals:
HDB uses an average of your income for the last six months preceding your application.

Table. Calculation of gross monthly income for salaried employees & self-employed persons

Does HDB consider my bonuses when calculating the income ceiling?

HDB does not factor in bonuses and income from occasional overtime work when determining income ceilings. However, regular allowances, whether fixed or variable (like transport allowance), are taken into account for the calculation.

Does HDB include my CPF contribution when calculating the income ceiling?

HDB considers your gross monthly income, including your CPF contributions, when computing the income ceiling. However, your employer’s CPF contributions are not included in this calculation.

What is the income ceiling for HDB BTO?

BTO flats are subsidised housing sold below market value, which justifies the presence of an income ceiling. This ceiling caps your monthly household income at $14,000, which includes everyone listed on your flat application.

Here is the income ceiling for a typical family nucleus (like a couple) based on BTO flat type:

HDB BTO TypeIncome ceiling
2-room flexi flat (99-year lease)$7,000
2-room flexi flat (short lease, 15 to 45 years)$14,000
3-room flat$7,000 or $14,000, depending on the project*
4-room flat or bigger$14,000

*Income ceiling will be specified in the sales launch press release

The majority of Singaporeans don’t have to worry about exceeding the income ceiling, particularly if they are young couples embarking on their careers. The combined earnings of a young couple in Singapore are unlikely to surpass $14,000.

In 2022, the median gross monthly income for full-time employed residents stood at $5,070. For a couple with such earnings, their gross monthly household income would be below $10,000, rendering them eligible for most BTO flat types.

Unless you fall into the sandwiched class of homebuyers earning an above-average wage (for instance, $7,500 per month) but not quite wealthy enough to spend millions on a condo or landed property, you are eligible to buy HDB BTO flats directly.

If you are applying as a single buyer or a multi-generational family, see the table below:

Applying asIncome ceiling
Single$7,000
Family/couple$7,000 for 2-room flexi (99-year lease) and some 3-room flats; $14,000 for all other flats
Extended/multi-gen family$21,000

Single individuals are restricted to purchasing 2-room flexi flats in non-mature estates under the HDB BTO scheme with the income ceiling of $7,000.

For families or couples, the standard BTO income ceiling is set at $14,000. However, specific circumstances apply to 2-room & 3-room flats, so you must review the BTO project launch information sheets for these details.

In cases involving extended and multi-generational families, there is a higher income ceiling of $21,000 for eligible buyers.

Should HDB raise the BTO income ceiling?

Whether HDB should raise the BTO income ceiling is a complex question that requires careful consideration of various factors. While increasing the BTO income ceiling could help more families access subsidised housing options, there are reasons why HDB might consider not raising the income ceiling for BTO flats anytime soon:

Limited Income Growth. The median income hasn’t significantly increased, suggesting that overall affordability hasn’t improved substantially.

Already Overloaded. The BTO flat system is already under strain due to high demand, and raising the income ceiling might exacerbate supply shortages and longer waiting times.

Alternative Options. Those exceeding the current BTO income ceiling already have other housing options, such as private properties or Executive Condominiums (ECs).

Equity Concerns. For lower- to middle-income Singaporeans with limited income, BTO application isn’t a choice; it’s their only affordable housing chance. Raising the income ceiling could worsen their struggle to secure housing amidst more competition.

What is the income ceiling for EC in Singapore?

For executive condominiums (ECs), the income ceiling is usually higher than that of BTO flats. At present, the income ceiling for ECs stands at $16,000, marginally surpassing the $14,000 ceiling set for BTO flats.

Can I take an HDB loan to buy an EC?

Financing an EC with an HDB loan is prohibited. A bank loan with a 25% downpayment (5% in cash) is necessary to purchase an EC. Thus, eligibility involves accumulating sufficient funds while not exceeding the income ceiling of $16,000 – striking a balance between savings and gross monthly income.

Can singles buy ECs?

Single individuals are not permitted to purchase ECs on their own. However, they can team up with up to three other singles under the Joint Singles Scheme (JSS) to buy an EC. In such a scenario, the income ceiling of $16,000 applies to the entire household of singles.

Is there any income ceiling for resale HDB flats?

Unlike BTO flats and ECs, no specific income ceilings exist for resale flats. They can be bought and sold on the open market without HDB imposing income restrictions.

But do you wonder why there are no income restrictions for HDB resale flats? Here’s why:

HDB resale flat prices often rise significantly after the first owner completes the Minimum Occupation Period (MOP) and decides to sell, as market forces come into play. This shift means that HDB can no longer artificially suppresses prices.

Transactions can even occur above HDB’s valuation, with the excess paid by the buyer as Cash Over Valuation (COV). Considering these dynamics, There is a diminishing rationale for imposing income ceilings on resale flats, as the market dictates their value more independently.

However, it’s essential to recognise that other eligibility criteria, like citizenship status,  ownership history, eligibility under one of the HDB housing schemes, and HDB’s ethnic and non-citizen quotas, still apply to maintain fairness and ensure genuine buyers benefit from the resale market.

What should I do if I exceed the income ceiling while buying a BTO or EC?

If you find yourself exceeding the income ceiling set by HDB for the housing scheme you are interested in, consider taking the following steps:

Review your financial situation: Take a closer look at your financial situation. If you have received bonuses or other one-time income that pushed you temporarily above the income ceiling, consider whether your regular income still falls within the limit. Understanding your financial stability and long-term prospects can help you make informed decisions about your housing journey.

Explore other housing options: If your income consistently exceeds the income ceiling for the specific HDB BTO flat type you are interested in, you might need to explore alternative housing options, such as resale condos and Executive Condominiums (ECs) in Singapore’s real estate market. However, remember these options may have different price points and eligibility criteria.

Consider joint ownership: If you are planning to purchase a property with a partner, family member, or friend, you can also explore the option of joint tenancy.

Stay informed: Keep yourself updated with the latest housing policies, including income ceiling guidelines from the HDB and the Singaporean government. There is a possibility that income ceilings could be adjusted in the future to reflect the changing economic conditions or housing demands.

Consult with financial advisors: If you are still unsure about your housing options, consider seeking advice from financial advisors or mortgage consultants. They can provide insights into your financial situation, the housing market, and potential strategies to achieve your homeownership goals.

Are the HDB’s income ceilings fair? Our Take…

In 2020, the idea of removing the HDB BTO income ceiling for first-time buyers was raised in Parliament. It was not the first time, nor the last. It stressed that every Singaporean should have the chance to buy their own BTO flat. This argument was backed by complaints from some young couples who could afford resale flats and private apartments but still preferred a BTO.

However, calling for the BTO income ceiling’s removal disapproves of why the government had implemented income ceilings in the first place. The income ceilings were implemented as part of the government’s housing policies to ensure that HDB flats are allocated to those who genuinely need affordable housing.

It aimed to strike a balance between providing housing assistance to lower-income families and individuals while preventing higher-income households from accessing heavily subsidised housing.

Income ceilings help promote social equity by directing subsidised housing resources to those with more limited financial means. It ensures that those in lower-income brackets have a better chance of owning a home and improving their quality of life.

Income ceilings also play a role in preventing property speculation, as higher-income individuals or families are less likely to take advantage of government-subsidised housing options meant for those in ‘real’ need.

While we believe that income ceilings are essential in regulating access to public housing, we understand they are just one component of a broader set of housing policies that strive to cater to the diverse needs of Singapore’s population.

Sometimes, income ceilings might not accurately reflect the varying financial situations of different households.

For instance, some families might have temporarily higher incomes due to bonuses or one-off windfalls but still genuinely require assistance securing affordable housing. Similarly, the sandwiched class of Singaporeans with incomes just above the income ceiling struggle to afford private housing and do not qualify for public housing, making their housing options limited.

While considering other eligibility criteria, such as the number of dependents, financial commitments, or the availability of financial resources, may help ensure a more nuanced and equitable assessment of housing needs than income ceilings, it is not so simple.

The fairness of HDB’s income ceilings is a multi-faceted issue, shaped by complex considerations in housing policies and their ongoing evolution to address the housing needs of Singapore’s population.

Final Thoughts

Owning an HDB flat is a dream shared by many Singaporeans, and the HDB’s commitment to providing affordable housing has made this dream a reality for many first-timers and lower to middle-income families. In the pursuit of homeownership, understanding HDB income ceilings in Singapore is paramount.

To ensure public housing in Singapore remains affordable and accessible, the government monitors housing market conditions closely.

As per the Ministry of National Development (MND) Singapore, there are no immediate plans to revise the household income ceilings for prospective buyers of BTOs and ECs. At the current income ceiling of $14,000, about 8 in 10 Singaporeans are eligible to apply for a BTO flat, while the $16,000 income ceiling enables about 9 in 10 Singaporeans to apply for EC.

At Dollarback Mortgage, we understand the significance of income ceilings in shaping the accessibility and affordability of housing for citizens. With our relentless commitment to assist potential buyers in their homeownership journey, we emphasise the importance of staying informed about evolving income ceiling guidelines.

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