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Do You Know These 4 Things Can Be Paid By CPF Savings in a Property Transaction?


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What Can CPF be Used For


Introduction

The CPF is an important source of finance that often bridge the gap between minimum cash down payment and shortfall from the loan limit. It is important to know whether you can use your CPF, before proceeding to find out how much CPF you can use. In this article, we will be focusing on whether you can use your CPF. For detailed information on how much CPF can be used, please click here.

CPF is usually used from the CPF OA (Ordinary Account). For older buyers, they may have a disadvantage as monies in the CPF OA have already been transferred to the CPF RA (Retirement Account). Furthermore, any shortfall in the minimum sum will be filled up into CPF RA by current income earned thereby causing less CPF amount that can be used.

Whether a person can use their CPF for a house is determined on the individual himself / herself. In a joint tenancy, if the wife is not allowed to use her CPF while the husband is allowed to use his CPF, then they can still buy the house, but only one of them can use the CPF as a source of finance.

However, in a joint tenancy, it does not matter who comes out with the CPF. As long as the sum of both parties CPF used is less than the limit allowed collectively, then it is fine.

For a tenancy-in-common, then the limit is scaled accordingly to how much share of the house that person holds. For more information on the limit, please click here.


Using CPF for HDB Flats

CPF can be used for:

  • #1 Loan monthly installments (regardless of HDB loan or bank loan) through GIRO
  • #2 Down payment
  • #3 Buyer Stamp Duty (BSD)
  • #4 Legal fees

CPF cannot be used for:

  • Cost on any form of construction to the HDB flat (e.g. improvements, renovation, repairs, repainting etc)
  • Property tax
  • Conservancy charges

Also note that monies from CPF refund after selling a house cannot be used to pay for stamp duties or conveyance fees.

When the CPF use has reached the VL and there is still outstanding HDB loan repayment, owner can actually go beyond the VL. However, Owner should have already set aside the prevailing retirement sum in their CPF account, and the excess of the prevailing retirement sum can be used.


Buying a 2nd Property

For HDB lessees (owners) who are of a Singaporean household and have completed their Minimum Occupation Period (MOP), they may be thinking of buying a 2nd property. CPF can still be used on a second property even if you have used your CPF savings your first property.

If you already have a home that can last you to at least 95 years of age, then you must have already set aside the current Basic Retirement Sum (BRS) in your CPF OA and CPF SA (including investments) for buyers below 55 years of age. For buyers 55 years old and above, you must have already set aside the current Basic Retirement Sum (BRS) in your CPF OA, CPF SA (including investments) and CPF RA. Any excess of the BRS then can be used for the 2nd property up to the VL.

If you do not have a home that can last you to at least 95 years of age, then you must have already set aside the current Full Retirement Sum (FRS) in your CPF OA and CPF SA (including investments) for buyers below 55 years of age. For buyers 55 years old and above, you must have already set aside the current Full Retirement Sum (FRS) in your CPF OA, CPF SA (including investments) and CPF RA. Any excess of the FRS then can be used for the 2nd property up to the VL.


Others

Undischarged bankrupt cannot withdraw CPF savings.



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What Can CPF be Used For


Introduction

The CPF is an important source of finance that often bridge the gap between minimum cash down payment and shortfall from the loan limit. It is important to know whether you can use your CPF, before proceeding to find out how much CPF you can use. In this article, we will be focusing on whether you can use your CPF. For detailed information on how much CPF can be used, please click here.

CPF is usually used from the CPF OA (Ordinary Account). For older buyers, they may have a disadvantage as monies in the CPF OA have already been transferred to the CPF RA (Retirement Account). Furthermore, any shortfall in the minimum sum will be filled up into CPF RA by current income earned thereby causing less CPF amount that can be used.

Whether a person can use their CPF for a house is determined on the individual himself / herself. In a joint tenancy, if the wife is not allowed to use her CPF while the husband is allowed to use his CPF, then they can still buy the house, but only one of them can use the CPF as a source of finance.

However, in a joint tenancy, it does not matter who comes out with the CPF. As long as the sum of both parties CPF used is less than the limit allowed collectively, then it is fine. This will mean that the husband can pay 100% of the CPF allowed to be used and the wife pays 0% of it. It is not restricted to only 50% of the limit as the share is half for each person in a couple.

For a tenancy-in-common, then the limit is scaled accordingly to how much share of the house that person holds. For more information on the limit, please click here.


Using CPF for HDB Flats

CPF can be used for:

  • Loan monthly installments (regardless of HDB loan or bank loan) through GIRO
  • Down payment
  • Buyer Stamp Duty (BSD)
  • Legal fees

CPF cannot be used for:

  • Cost on any form of construction to the HDB flat (e.g. improvements, renovation, repairs, repainting etc)
  • Property tax
  • Conservancy charges

Also note that monies from CPF refund after selling a house cannot be used to pay for stamp duties or conveyance fees.

When the CPF use has reached the VL and there is still outstanding HDB loan repayment, owner can actually go beyond the VL. However, Owner should have already set aside the prevailing retirement sum in their CPF account, and the excess of the prevailing retirement sum can be used.


Buying a 2nd Property

For HDB lessees (owners) who are of a Singaporean household and have completed their Minimum Occupation Period (MOP), they may be thinking of buying a 2nd property. CPF can still be used on a second property even if you have used your CPF savings your first property.

If you already have a home that can last you to at least 95 years of age, then you must have already set aside the current Basic Retirement Sum (BRS) in your CPF OA and CPF SA (including investments) for buyers below 55 years of age. For buyers 55 years old and above, you must have already set aside the current Basic Retirement Sum (BRS) in your CPF OA, CPF SA (including investments) and CPF RA. Any excess of the BRS then can be used for the 2nd property up to the VL.

If you do not have a home that can last you to at least 95 years of age, then you must have already set aside the current Full Retirement Sum (FRS) in your CPF OA and CPF SA (including investments) for buyers below 55 years of age. For buyers 55 years old and above, you must have already set aside the current Full Retirement Sum (FRS) in your CPF OA, CPF SA (including investments) and CPF RA. Any excess of the FRS then can be used for the 2nd property up to the VL.


Others

Undischarged bankrupt cannot withdraw CPF savings.



Date first posted on 18 June 2019; Last Edited on 18 June 2019

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