So, I have spoken out through the years on what a scam the HDB/CPF axis is. Those who “buy” HDB flats enter the arrangement are blind and brain dead. Are there any advantages to purchasing a HDB flat, other then an overpriced roof over your head? To be fair, there are 2 major advantages, both of which have some intrinsic value.
Firstly, there is there is the right of sole survivorship. Imagine if you sign a 5 year lease for a car. If you die within this 5 years, The lease does not transfer to your heirs. The lease was signed with you and if you are dead, the lease terminates. Same too for any 12 month rental agreements and such. The person signing it was qualified for the lease by the landlord or his agent, hence, no one is supposed to take over when that tenant is deceased. But in the HDB case, the flat and its remaining lease can be willed on towards your spouse, children, or any relatives you so chose. In theory they can stay there for up to the full 99 years long after you are deceased. There is a value in this, mainly because they will be staying almost rent free after the original housing loan to “purchase” the flat has been paid off and even if it has not been paid off, the monthly mortgage payments are likely way below the market rent for an equivalent flat.
The second advantage is that the remaining lease on the flat can be transferred to another individual at an arms length COMMERCIAL transaction for financial compensation. In other words, the “owner” of the flat can “sell” the flat for money, and maybe even for more then what he or she paid for it. The landlord (HDB) has to approve the transaction, but in almost all cases, there is no issue. In normal commercial and residential leases, this is not possible. Lets say If you sign a 5 + 5 commercial lease on a shop in say Katong Shopping Centre, and after 2 years someone offers you a lot of money to walk away from your lease because they want to occupy that space, the landlord has to approve your sublease to this new person. And its not always a given that it will happen. The landlord would rather terminate the lease with you and sign a more lucrative lease with this person who is willing to pay more.
These 2 advantages are in many ways unique to the HDB 99 year lease. Flat dwellers should take whatever pitiful advantages are offered.