It’s been 65 years since Singapore’s Housing & Development Board (HDB) was founded, and the nation’s first-ever HDB flats were built. These flats, and all HDBs thereafter, come with a 99-year lease. Yes, 99 years seems like a long time, but for many of these buildings, and those built in the years after, that end is nigh. But what happens to your HDB when its time is up?
Why do HDB flats have a 99-year lease?
Image credit: gov.sg
Before we get to what happens when your HDB flat’s 99-year lease is up, let’s take a look at why there is an expiry date in the first place. It all starts with a very fundamental problem━Singapore being a land-scarce country.
Because of this arises the need to recycle land every once in a while, in order to “be fair to future generations”, to quote then-PM Lee Hsien Loong in his 2018 National Day Rally, “to ensure all our descendants can buy new BTO flats of their own … newer, better, more liveable flats … more suited to what our grandchildren and great-grandchildren will want to live in.”
In short: taking back the land allows the government to rejuvenate the city for generations to come, giving everyone access to affordable, quality housing.
Will I be left empty-handed when the lease expires?
Singapore’s first HDB flats on Stirling Road.
Image credit: Roots.sg
Several years ago, 191 two-storeyed terrace houses in Geylang Lorong 3 saw their 60-year leases expire━the first time in Singapore where residential properties have been returned to the state. Residents were informed by Singapore Land Authority (SLA) that they had to return their homes with no compensation, sparking concerns that HDB dwellers would face the same eviction when their 99-year leasehold HDB flats reach the end of their time.
Yes, it is a fact that at the end of the 99 years, the value of your HDB flat is $0. And as demonstrated by the Geylang Lorong 3 case, there is absolutely no obligation on the government’s part to compensate anyone when the lease is up━your ownership agreement on a new HDB flat openly states a tenure of 99 years.
However, you can find comfort in knowing that the Geylang properties were private, rather than public homes. While no HDB flats have as yet reached the grand old age of 99 years, the government has historically always stepped in way before the end of the lease, in the form of the Selective En-Bloc Redevelopment Scheme (SERS).
SERS vs VERS
Ghim Moh Valley was developed for SERS residents in Ghim Moh.
Image credit: HDB
SERS was launched in 1995 as an urban redevelopment scheme that upgrades older HDB flats in order to build new public housing options. From a state perspective, maintaining and continually upgrading mature flats gets progressively more costly and challenging as the buildings deteriorate with age. So there comes a point when it makes more sense to redevelop and better utilise the land, even before the 99 years expire.
Another scheme that is in place, but has yet to be implemented, is the Voluntary Early Redevelopment Scheme (VERS), which is a process similar to en-bloc sales of condo estates. In the case of HDB, the government buys the land, offering residents a payout that they’ve stated will be less generous than any SERS sum.
Here’s a table comparing the two schemes:
| Feature | SERS (Selective En bloc Redevelopment Scheme) | VERS (Voluntary Early Redevelopment Scheme) |
| Purpose | To redevelop selected older HDB estates with high redevelopment potential. | To redevelop older HDB flats on a voluntary basis when they are near the end of their lease. |
| Eligibility | Limited to a small number (4%) of older HDB estates with high redevelopment value. | Applies to many more ageing HDB estates as their leases near expiration. |
| Initiation | Initiated by the government (HDB selects the sites). | Residents vote to decide if their estate should undergo redevelopment. |
| Compensation | Owners receive compensation based on the market value of their flat. | Owners will receive compensation (specific details to be announced). |
| Replacement Housing | Guaranteed new flat in a nearby location with priority allocation. | Residents will have the option to purchase a new flat but are not guaranteed a specific location. |
| Voting Requirement | No voting required—participation is mandatory if the estate is selected. | Requires a majority vote from residents to proceed with redevelopment. |
| Lease Duration | Typically targets flats with substantial lease remaining (usually 40 years or more). | Targets flats that are nearing the end of their 99-year lease. |
| Timeline | Implemented since 1995 and ongoing for selected estates. | Expected to start in the 2030s, with implementation phased over decades. |
| Objective | Optimise land use and rejuvenate mature estates. | Provide a fair and gradual process for managing flats reaching lease expiry. |
| Resident Choice | No option to refuse if the estate is chosen for SERS. | Residents have the choice to vote for or against the redevelopment. |
| Flat Age Focus | Typically flats built in the 1970s-1980s with strong redevelopment potential. | Older flats with little lease remaining and limited redevelopment value. |
Thus far, 79 HDB sites have undergone SERS, with the last SERS project to date being that of 4 blocks in Ang Mo Kio Avenue 3 back in 2022.
Should I sell my depreciating HDB flat?
Before we get to the last years of your HDB’s lease, you might wonder what you can do to maximise the value of your home before it further depreciates to nothingness.
- Sell early: if your HDB flat is still relatively young, you can consider selling it early━within the first 40 years of its lease, before significant depreciation occurs. As evidenced by the burgeoning number of resale HDB flats crossing the million-dollar threshold, there is a demand for these flats.
- Hold and rent: you can consider renting out your HDB flat for additional income if you can afford to do so, after fulfilling your MOP. While not applicable now, Prime and Plus flats cannot be rented out even after the 10-year MOP. However, as the flat gets older, its value as a rental property might decrease.
If you choose to hold on to your flat, you must remember that leasehold properties hold less value the closer they get to the end of the lease. You will be hard-pressed to find buyers for the flat at this point too, because it’s more difficult for them to obtain any loans to finance the purchase.
The amount of CPF savings they can use to buy the flat is also pro-rated based on the remaining lease, making your ageing flat unattractive to buyers, thus reducing the demand, and causing the market value of your flat to drop.
What can I do after my HDB reaches 99 years?
Image credit: HDB
If you’re lucky enough to be living in an HDB flat selected for SERS, you’ll have the option of upgrading to a brand new BTO unit, with a reset on the 99-year countdown. There’s also the possibility that you wind up with cash in hand if you should pick a new flat that’s worth less than the market value of your current HDB unit.
There is, of course, the option to go private. In this case, you can return your flat to HDB for an ex-gratia payment of $30,000 on top of the SERS grant if you’re eligible━you get half in cash, and half credited to your CPF OA. Do note that the compensation for every flat can differ based on the condition of the flat as evaluated by professional, HDB-appointed valuation experts.
The general advice, however, is not to hedge all your bets on buying an old resale flat in hopes of the estate being selected for SERS━the older your HDB is, the less value it holds. There are some rare cases where factors such as an excellent location or proximity to top primary schools help selected HDB estates retain value, but the room for further gains is small.
For more housing news:
- HDBs that will enter the resale market in 2025
- 5-room HDB flat in Toa Payoh transacts for $1.6m
- New condo launches in 2025
Cover image adapted from: Google Maps, PropertyGuru
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