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HDB: divorcees, not PRs, game the system?

Amaths

Alfrescian
Loyal
I read with amusement how Minister for National Development, Khaw Boon Wan, was suddenly awakened to the plight of low to middle income Singaporean divorcees with children. Thanks to HDB’s stringent and profit-driven regulations, many Singaporeans are already facing a myriad of housing problems. Divorcees with children, slapped with the five-year debarment period, were effectively penalized by the government for their failed marriage by depriving them of public housing.

Now Khaw says this five-year debarment period is waived. But the ghost Scrooge within the PAP’s psyche refuses to be silenced. Khaw accused some Singaporeans of filing for divorce so that “they could then qualify for two subsidized flats”. This policy was apparently supposed to prevent people from “gaming the system”.

I hadn’t known divorce is a lucrative means to enrich one’s pocket. I thought divorce is costly and carries a whole load of social stigma in some quarters. How many such cases has the minister come across? How did HDB carry out its investigations? What is the percentage of such fraudulent divorces in the total number of bona fide cases?

One might be prompted to say that it is about upholding a principle that Singaporeans should not gain undue profit from HDB flats, never mind the low percentage of fraudulent cases. That is all well and good. However, allow me to contrast how magnanimous PAP is in allowing permanent residents (PR) to exploit the system in a way Singaporeans can never do so.

PRs, like Singaporeans, can buy a resale HBD flat and sublet after a minimum occupation period (MOP). This was previously three years, but was only recently increased to five years. If PRs decide to move back to their home country before the 5-year period, they can actually put in a special application to bypass MOP on the grounds that they are relocating “overseas”. (Hello! Where else do you think these foreigners are going?)

Looking at the commercial housing loan of 1.5% on the average, a 4-room flat would cost only $1,280 in monthly mortgage. The corresponding market rental is currently $2,000 at least. So in effect, PRs can fly back to their home country after buying a resale flat and proceed to live off the rental and have a fully paid-up flat at the end of the day! Talk about gaming the system big time, Mr Khaw! No need for messy costly divorce, or social stigma, or court records. Just do it legally!This ability of PRs to “game the system” in Singapore is already well known. They easily gain this arbitrage profit as they straddle between high cost Singapore and their low-cost home country, while eventually choosing to settle down in the latter. The Government knows this, yet it chooses to favour foreigners in its policy-making.

In 2010, then-Minister for National Development, Mah Bow Tan, said: “HDB flats are provided primarily for owner-occupation and not speculative profit or rental return.” (See here.)

Has Khaw changed this policy?

Granted that the number of PRs renting out their HDB flats is a small number. However, the principle, as elucidated by Mah, is important and should be adhered to. HDB flats are for public housing, not for profit-making, and this should apply even more strictly to non-Singaporeans. If it were not, then what is the difference between a citizen (who needs a roof over his head) and a non-Singaporean who, apparently, does not?

Another issue is the ownership of private properties by those who also own HDB flats. On the HDB website, it says:

“HDB flats are meant for long-term owner-occupation. HDB will increase the Minimum Occupation Period (MOP) to reinforce this and dampen demand from those who are not in urgent need of housing.

First, the MOP of non-subsidised flats for resale and subletting of flat will be increased from three to five years. Second, buyers of non-subsidised flats will be disallowed from concurrently owning both an HDB flat and a private residential property within the MOP. Private property owners who buy a non-subsidised HDB flat must now dispose of their private residential property within six months from the date of flat purchase. This will help ensure that buyers purchase HDB flats only when they have the intent of staying in it for long term and ensure equitable treatment for all HDB flat lessees during their MOP. Ownership of private properties by HDB lessees will be allowed after the MOP.”

As HDB is so good at ferreting out fraudulent divorces, I am sure Singaporeans are interested to know if HDB checks on PRs to make sure they do not own another property (locally or elsewhere) before purchase as well as during the minimum occupation period. Are there cases at all when PRs are found to flout this rule? What is the percentage of errant PRs versus total PR purchases?

Contine reading at http://publichouse.sg/categories/topstory/item/523-divorcees-gaming-the-system-mr-khaw?#itemCommentsAnchor
 
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