For HDB-owning Singaporeans approaching retirement who are house-rich but cash-poor, the Lease Buyback Scheme (LBS) is one of the most practical and underutilised options available. It allows eligible flat owners to sell a portion of their flat's remaining lease back to HDB — converting an illiquid housing asset into cash and CPF LIFE income — while retaining the right to live in the flat until death. Here is what it involves.
How The Lease Buyback Scheme Works
Under the LBS, eligible HDB flat owners (currently for 4-room and smaller flats, with 5-room flats also eligible after March 2024 extensions) sell part of the flat's remaining lease to HDB, retaining enough lease to cover the youngest owner to at least 95. The proceeds from the lease sale are channelled into the seller's CPF Retirement Account, up to the prevailing Enhanced Retirement Sum (ERS). The CPF RA balance then funds a higher CPF LIFE monthly payout. Any proceeds above the ERS top-up are paid in cash — up to $100,000 for eligible households, with the remainder going into CPF LIFE.
Who Is Eligible
Eligibility conditions include: at least one owner is aged 65 or above, the flat has been owned for at least 5 years, all owners must be Singapore Citizens, the flat must be 4-room or smaller (or 5-room under recent extensions), and all owners must have lived in the flat for a minimum period. The full eligibility criteria are available on HDB's website.
The Financial Impact
The LBS produces two financial outcomes simultaneously: a higher CPF LIFE monthly payout (from the increased RA balance) and continued free occupation of the flat. For retirees whose monthly CPF LIFE payout is insufficient to meet living expenses, the LBS can meaningfully increase monthly retirement income without requiring a move or lifestyle disruption.
The Trade-Off
The trade-off is that the flat's remaining lease — and therefore its estate value — is reduced. Owners who want to leave the property as an inheritance for children may find LBS reduces the estate value. For owners whose priority is their own retirement income rather than estate planning, this is an acceptable and often sensible trade.