HDB Income Ceiling for BTO, EC & RF – A Young Couple’s Guide

Buying a HDB flat is a rite of passage for many Singaporeans. However, there is a HDB income ceiling in force which ensures that only those with an average gross monthly household income below a set amount can purchase a BTO flat. Depending on the type of HDB flat you are interested in, this income ceiling can range from S$7,000 to S$14,000.

BTO flats are considered subsidised housing in Singapore, but the typical median gross monthly income of a young couple submitting a flat application in the city-state is around S$4,500 – making most first-time buyers eligible for BTO flats.

That said, if your household income earned is simply too high for the BTO flat combined income ceiling limits set by HDB, or you’d rather buy a different flat type, there are other private property options available. For example, you could purchase a HDB resale flat, or maybe even a private condo.

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What is the HDB Flat BTO Income Ceiling?

As BTO flats are considered subsidised housing, Singapore’s Housing Development Board (HDB) sets a limit on the average gross monthly household income of families than can purchase them.

Much like HDB loan products and CPF Housing Grants, the idea is that such a regulation will keep housing affordable and ensure that everyone has the means of purchasing a private property in the city-state. This is important, as unlike in other countries, it’s not just lower income Singaporeans that live in public housing here – almost everyone does. This means that public housing protections are required to ensure the wealthiest members of society don’t take advantage of the system.

But what exactly is the HDB flat income ceiling limit? Let’s take a look.

HDB Income Ceiling at a Glance

The BTO income ceiling currently in place is S$14,000. This is an average gross monthly household income figure which includes the total income of everyone in your family nucleus that you have listed in your flat application. Let’s look at how this works with each different type of HDB flat –

The above income ceilings apply to the entire family nucleus listed on your flat application. This means that if you are buying a flat with your spouse or partner, your combined incomes together must not exceed the income ceiling limit. Let’s review what this means exactly for BTO, HDB resale flat and EC buyers –

1. HDB BTO Flats

Most BTOs have a S$14,000 income ceiling which your household’s combined income will have to fall under if you wish to purchase a BTO property. That said, if you’re buying a 2 room flexi flat with a lease that’ll run on for 99-years, or selected 3 room flat types that qualify for HDB’s alternative S$7,000 income ceiling, your monthly household income ceiling is even lower.

2. HDB Resale Flat

If BTOs simply aren’t an option for you, a HDB resale flat might just be the next best thing for lower to middle income Singaporeans. No income ceiling restrictions apply, yet lower income Singaporeans might still be able to access CPF Housing Grants to assist with their purchase.

3. Executive Condominium (EC Buyers)

Executive condos or “ECs” are classed as HDB properties in their earlier years, but don’t have the same income ceiling requirements as BTOs. Instead, the earnings of your family nucleus will need to fall under a monthly household income ceiling of S$16,000.

How is HDB Income Ceiling Calculated?

As we’ve briefly already mentioned, HDB’s income ceiling is calculated according to the gross monthly income of your household in total. In other words, everyone in your home’s combined income counts toward the income ceiling – for example, the income ceiling figures quoted by HDB include both you and your spouse’s income earned together (and not just your own) if you are applying to buy a HDB flat as a couple.

Let’s take the example of a man with a gross monthly income of S$5,000 and a woman with a gross monthly income of S$2,000 who want to move into their first HDB flat together. In this scenario, your combined monthly household income would be S$7,000, putting your family nucleus well below the S$14,000 income ceiling limit that applies to most types of BTO flat.

In terms of calculations, when you are purchasing a BTO flat, HDB will calculate your median gross monthly income according to your last drawn pay from the last three months. HDB will use the official sum from your pay slips excluding any CPF contributions you might have made.

What if I Exceed the Income Ceiling on My HDB Flat, Resale Flat or EC?

While many lower and middle income Singaporeans will qualify for HDB’s income ceiling, not everyone will be eligible to purchase a BTO flat. But if this sounds like you, don’t fear – as there are many other types of flats and houses on the open market that might be available to you.

Your first port of call will probably be a HDB resale flat. Resale flats come with no income ceiling restrictions and can be purchased at very affordable prices across Singapore. Even if cost is a concern, you might also be able to access CPF Housing Grants depending on your unique situation.

If you’re looking for a larger space or a property with the luxurious look and feel of a private condo, you could opt for an executive condo or “EC”. These properties are often cheaper than traditional private condos but retain many of the same excellent facilities and are also generally considered to be a sound investment in the medium to long-term.

Let’s look at some of these alternative housing options in a little more detail to help you decide which might be the best fit for you.

Alternative Private Housing Options – Which Flat Type is Right for You?

1. Buying a HDB Resale Flat

If your family’s household income exceeds the BTO income ceilings or you’re simply looking for an affordable option or alternative to BTOs, then HDB resale flats are a good, safe bet. Pretty much anybody in the city-state can buy a HDB resale flat, but if you’re hoping to claim a CPF Housing Grant to assist with the purchase price, certain eligibility requirements apply.

Many CPF Housing Grants have the same income ceiling as a BTO flat, though there are a few exceptions – such as the Proximity Housing Grant or the CPF Housing Grant for first-time buyers who are purchasing a resale flat as a family. You can read more about these on the HDB website here.

HDB resale flats come with the huge benefit that you won’t need to wait for your new home to be built before you move in, meaning that the moving-in process will always be fast and efficient. You’re also likely to pay an affordable purchase price for your property – though renovation costs could prove expensive if the flat has had a lot of previous owners and is showing signs of wear and tear. You’ll also have to watch out for private properties or resale flats that have a dwindling lease, too.

Pros

• Resale housing affordable for most Singapore citizens
• CPF Housing Grants are available
• Fast moving-in process

Cons

• Renovation costs could prove expensive
• You won’t get a brand-new place
• The lease might be waning away

2. Buying an Executive Condo or “EC”

If you’re looking for top-notch facilities like swimming pools, gyms and the look and feel of a private property, an executive condo or “EC” might be a good option. Unlike more expensive private condos that you might find elsewhere, ECs are subsidised by HDB, which means they come with a generally cheaper purchase price but are still bound by income ceilings restrictions.

At the time of writing, you’ll need be earning less than HDB’s income ceiling average gross monthly household income limit of S$16,000 for an EC. If your family has a combined income of less than S$14,000, you might also be eligible for a Family Grant or Half Housing Grant to assist you with the purchase price.

Both new-from-developer ECs and resale ECs are generally considered good investments, particularly once they hit five to 10 years old. That said, new EC launches are rare and it’s likely that ECs won’t have such a good location as BTO or resale flats – which could make you more reliant on public transport.

It’s also worth noting that your EC will be considered a HDB property for the first 10 years, too – meaning you’ll need to abide by HDB’s Minimum Occupation Period MOP rules, which prevent you from selling or renting out the entire flat during a (usually five-year) period.

Pros

• An executive condo is usually cheaper than a private condo
• Strong values are likely to be retained
• You can enjoy the look and feel of a private property

Cons

• Locations may sometimes be undesirable
• EC launches are relatively uncommon
• HDB MOP rules apply for 10 years

Frequently Asked Questions (FAQs) About the HDB BTO Income Ceiling

Still unsure about income ceiling restrictions and purchasing a HDB flat in Singapore? We’ve compiled a list of frequently asked questions (FAQs) below:

1. Is a HDB Flat, HDB Resale Flat or EC Best?

Which type of HDB flat is best suited to you will depend on your unique situation. While buying a BTO is the obvious choice for those who fall below the income ceiling, ECs offer premium living at a bargain price, and resale flats are a good middle-ground for Singaporeans who want affordability and a fast moving-in process but aren’t too worried about renovations.

2. How Much Can I Get in CPF Housing Grants?

There are several types of CPF Housing Grants available to Singaporeans, the majority of which are targeted at those purchasing resale flats. Applicants can potentially claim up to S$50,000 in CPF Housing Grants depending on household income. You can find out more about CPF Housing Grants on the HDB website here.

3. What is the Enhanced CPF Housing Grant?

Families and couples with a median gross monthly household income of S$9,000 or less can potentially claim between S$5,000 and S$80,000 with an Enhanced CPF Housing Grant. This consolidated grant is available on all HDB, BTO and resale flats, but you’ll want to check your eligibility with HDB here before you apply.

4. What’s the Difference Between a HDB Loan and a Bank Loan?

If you’re buying a HDB flat, there are two key loan options available to you – a HDB loan or a bank loan. A HDB loan will allow you to borrow a loan to value of up to 85% of the flat price, requiring a 15% down-payment to be made. You can usually make this down-payment using funds from your CPF Ordinary Account with a HDB loan, while a bank loan is likely to require a larger down-payment of which at least 5% must be paid in cash.

5. What Does a HDB Loan Down-Payment Cost?

Your HDB down-payment cost can vary depending on several factors, including the purchase price of the property and the loan to value amount you have decided to borrow. Generally, however, a HDB loan will require you to make a down-payment of at least 15% of the flat price, which can be paid for using your CPF OA, cash or a combination of both.

6. Why Does HDB Have an Income Ceiling for BTOs?

The reason behind HDB’s income ceiling restrictions is simple – they are designed to keep the city-state’s housing market competitive and fair. HDB homes are classed as a type of subsidised government housing, so the income ceiling limitations effectively act as means-testing criteria to separate eligible from ineligible buyers.

HDB BTO Income Ceiling – What You Need to Know

Income ceiling requirements are in place to make Singapore’s housing open market fairer for all. While these restrictions may appear complicated at first glance, they’re actually easier to understand than you might think – in short, if the gross monthly income of your household exceeds the income ceiling limit, you will not be eligible to buy a BTO.

Here are the key things to keep in mind:

• The income ceiling HDB imposes on BTO purchases is usually S$14,000, though some selected types of 2 room Flexi Flat or 3 room flat may have an even lower income ceiling of S$7,000. Conversely, ECs are subject to a totally different income ceiling limitation of S$16,000.
• If your household income exceeds the income ceiling for BTOs, there are lots of alternative home-buying options available to you – such as purchasing a resale flat or EC.
• If choosing to purchase an EC, HDB’s Minimum Occupation Period MOP rules apply for the first 10 years, meaning that you cannot sell or rent out the entire flat during a pre-agreed period.

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