Guide to CPF Usage for Property in Singapore

CPF Housing Schemes

CPF Board administers several schemes that allow members to use their OA savings for housing:

• Public Housing Scheme (PHS): For the purchase of new or resale HDB flats.
• Private Properties Scheme (PPS): For the purchase or construction of private residential properties in Singapore.

The rules and limits for using CPF can differ slightly between these schemes and property types.

What Can You Use Your CPF OA Savings For?

Subject to withdrawal limits, you can typically use your CPF OA savings for:

1. Downpayment: A significant portion of the initial downpayment for a property can often be paid using CPF OA, after meeting any minimum cash downpayment requirements (especially for bank loans).
2. Monthly Mortgage Instalments: You can use your OA savings to service your monthly housing loan payments, whether it's an HDB loan or a bank loan.
3. Stamp Duties and Legal Fees: In many cases, CPF OA can be used to pay for Buyer's Stamp Duty (BSD), Additional Buyer's Stamp Duty (ABSD), and legal fees associated with the property purchase and mortgage. Our Stamp Duty Calculator can help you estimate these duties.
4. Home Protection Scheme (HPS) Premiums: If you are using CPF to pay your HDB housing loan instalments, you are required to be covered under HPS, a mortgage-reducing insurance. Premiums can be paid from your CPF OA.

CPF Withdrawal Limits for Housing

While CPF OA can be used for housing, there are limits to how much you can withdraw. These limits are in place to ensure you have enough savings for retirement.

1. Valuation Limit (VL) and Purchase Price (PP)

Generally, you can use your CPF OA up to the lower of the property's purchase price (PP) or its valuation (VL) at the time of purchase. This is often referred to as the 100% VL/PP limit.

2. Withdrawal Limit (WL)

For properties financed with a bank loan, there's an additional Withdrawal Limit (WL), which is typically set at 120% of the Valuation Limit (VL). Once your total CPF usage (principal + accrued interest) reaches this WL, you cannot use further CPF for the property; subsequent payments (like mortgage instalments) must be in cash.

If you are taking an HDB loan, you may be able to use your CPF OA up to the VL/PP without being restricted by the 120% WL, provided certain conditions are met (e.g., if the property can cover you to age 95).

3. Basic Retirement Sum (BRS) / Full Retirement Sum (FRS)

When you reach age 55, you can withdraw your CPF savings after setting aside the Full Retirement Sum (FRS) or the Basic Retirement Sum (BRS) if you own a property that can last you up to age 95. If you have used CPF for your property, the amount you can withdraw in cash might be affected by the amount pledged from your property. Using CPF for housing beyond certain limits might mean you have less cash withdrawable at 55.

4. Remaining Lease of Property

There are restrictions on using CPF for older properties with a short remaining lease:

• CPF cannot be used if the remaining lease is less than 20 years.
• The amount of CPF that can be used is pro-rated if the remaining lease of the property does not cover the youngest buyer until at least age 95.

It's crucial to check the latest CPF Board guidelines regarding property lease and CPF usage.

Using CPF for Second or Subsequent Properties

If you are purchasing a second or subsequent property, the rules for using CPF become more restrictive. You generally need to set aside the prevailing Basic Retirement Sum (BRS) in your CPF accounts (OA and SA combined) before you can use the excess OA savings for the next property.

Selling Your Property and Refunding CPF

When you sell a property for which you've used your CPF savings, you are required to refund the following amounts to your CPF account:

• The principal amount of CPF withdrawn for the property.
• The accrued interest that this principal amount would have earned if it had remained in your CPF Ordinary Account. The current CPF OA interest rate is 2.5% per annum (subject to change).

This refund replenishes your CPF savings for retirement. If the sale proceeds are insufficient to cover the full CPF refund amount (principal + accrued interest), you generally do not need to top up the shortfall in cash, provided the property was sold at or above market value. However, this can impact your future CPF withdrawals and housing options.

CPF Housing Grants

For eligible first-time buyers of HDB flats (new or resale), the Singapore government provides various CPF Housing Grants (e.g., Enhanced CPF Housing Grant (EHG), Family Grant, Proximity Housing Grant). These grants are credited into your CPF OA and can be used to offset the purchase price of the flat, reducing the loan amount needed and/or the cash outlay.

Eligibility for grants depends on factors like citizenship, income, family nucleus, and property type. It's a complex area, and you should refer to the HDB website for detailed information on grants.

Important Considerations & Tips

• Accrued Interest: Be mindful of the accrued interest. The longer you use CPF for your property and the larger the amount, the more accrued interest you'll need to refund upon sale.
• Retirement Planning: While using CPF for housing is common, consider its impact on your retirement savings.
• Check Your Eligibility: Always verify your eligibility and the latest CPF rules on the official CPF Board website before making any decisions.
• Financial Planning: Consider using our Affordability Calculator to understand what you can afford before diving into CPF usage details.