Singapore's 99-Year Lease Dilemma

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Dec 28, 2025
5 min read

Singapore’s 99-Year Leasehold Dilemma: Living on a Ticking Clock

Singapore's 99-Year Lease Dilemma

For the vast majority of Singaporeans, homeownership is synonymous with the 99-year leasehold. While the dream of owning a slice of the "Little Red Dot" is a cornerstone of national identity, a sobering reality is beginning to set in for many: the leasehold clock never stops ticking.

As HDB flats and private leasehold condos age, the "asset enhancement" narrative of the past is being replaced by a complex conversation about depreciation, inheritance, and the emotional value of home.

The Economics of the Ticking Clock

In the early years of a 99-year lease, a property generally appreciates in line with the market. However, as the remaining lease drops below the 60-year and 35-year marks, several financial hurdles emerge:

Loan Restrictions: The CPF Board and banks limit the amount of retirement funds and mortgage loans available for properties with low remaining leases. This shrinks the pool of potential buyers.
The "Lease Decay" Curve: Historically, property values don't drop linearly. Instead, they tend to hold steady for decades before accelerating downward as the lease nears its end.
Bala’s Curve: This is a theoretical table used by land professionals to estimate the value of a leasehold property relative to a freehold one. It highlights that a leasehold's value drops significantly faster once it crosses the halfway point.

The Inheritance Anxiety

For many Singaporeans, a home is more than shelter; it is the primary vehicle for intergenerational wealth transfer.

Parents who bought flats in the 1970s and 80s are now facing the reality that their primary asset may have diminished value by the time it reaches their children. If a child already owns a home, they may be forced to sell the inherited property—potentially at a point where the lease decay has already eaten into the capital gains.

"We wanted to leave something for our kids, but if the lease has only 30 years left, will it be a gift or a burden?" — Typical sentiment among aging leasehold owners.

More Than Just Dollars: The Intangible Value

Despite the financial math, many residents choose to stay in their aging homes. For them, the "dilemma" isn't just about the balance sheet.

Community Ties: Decades spent in the same neighborhood build social capital that is hard to price. Proximity to familiar wet markets, hawker centers, and lifelong neighbors often outweighs the lure of a fresh 99-year lease elsewhere.
Right-Sizing vs. Staying Put: While the government offers schemes like the Silver Housing Bonus to encourage downsizing, the emotional upheaval of moving in one’s twilight years is a significant deterrent.
The VERS Factor: The Voluntary Early Redevelopment Scheme (VERS) offers a glimmer of hope for some compensation before the lease hits zero, though the exact mechanics and payout levels remain a point of much speculation.

Navigating the Dilemma: What Homeowners Can Do

If you are currently living in or considering an older leasehold property, consider these strategic moves:

Strategy	Benefit
Monitor the 60-Year Mark	Consider selling before the lease falls below 60 years to avoid major CPF usage restrictions for future buyers.
Lease Buyback Scheme	For HDB owners, selling part of the lease back to the government can provide a steady stream of retirement income.
Focus on Location	Properties in prime districts or near upcoming MRT lines often resist lease decay longer than those in less connected areas.

The Road Ahead

Singapore's 99-year leasehold model was designed to ensure land can be recycled for future generations in a land-scarce nation. While the "ticking clock" creates financial anxiety, it is also what allows the state to provide housing for the next generation of Singaporeans.

Ultimately, the choice between viewing a home as a financial asset or a sanctuary is a personal one. As the first batches of 99-year leases begin to age into their final decades, the way Singaporeans view "home" is set for a fundamental shift.

Breakdown of the specific CPF Usage Rules for Properties with Less Than 60 years of Lease Remaining

In Singapore, the rules for using Central Provident Fund (CPF) savings to buy a home shifted significantly in 2019. The focus moved from the property's absolute age to whether the lease covers the youngest buyer until age 95.

If you are eyeing a property with less than 60 years of lease remaining, here is the breakdown of how your CPF usage will be affected.

1. The "Age 95" Golden Rule

The primary factor determining your CPF usage is a simple calculation:

Age of Youngest Buyer + Remaining Lease ≥ 95

If YES (Covers to age 95): You can use your CPF Ordinary Account (OA) up to the Valuation Limit (VL), which is the lower of the purchase price or the property value.
If NO (Does not cover to age 95): Your CPF usage will be pro-rated. You will not be able to use the full valuation amount; instead, a percentage will be calculated based on how close the lease gets you to age 95.

2. The Minimum Lease Threshold

Regardless of your age, there is a hard floor for CPF usage:

Remaining Lease < 20 Years: You cannot use any CPF savings for the property purchase or to service the housing loan.
Remaining Lease ≥ 20 Years: You can use CPF, but subject to the pro-ration rules mentioned above if it doesn't cover you to age 95.

3. Impact on Housing Loans

The length of the lease also dictates how much you can borrow, which indirectly affects how much CPF you need to "top up" the difference.

Factor	Lease Covers Youngest to Age 95	Lease DOES NOT Cover to Age 95
HDB Loan LTV	Up to 75% (current 2025 limit)	Pro-rated (lower than 75%)
Bank Loan LTV	Up to 75%	Often lower; banks are more conservative
Max CPF Usage	100% of Valuation Limit	Pro-rated percentage

4. Pro-ration Formula (Simplified)

While the CPF Board uses a specific internal calculator, the logic follows this trend: If a 30-year-old buys a flat with 50 years left (total 80), they are "missing" 15 years of coverage to reach 95. Their allowed CPF usage might be roughly 80% to 90% of the Valuation Limit, meaning the remaining 10% to 20% plus the downpayment must be paid in cash.

5. Restrictions After Age 55

If you are 55 or older and buying a short-lease property:

Property Pledge: To withdraw CPF savings above your Basic Retirement Sum (BRS), the property you own must have a remaining lease that covers you to age 95.
Short Leases: If the property does not meet the age 95 criteria, you may be required to set aside the Full Retirement Sum (FRS) in cash/top-ups before you can use any excess OA for the property.

Summary Checklist for Short-Lease Properties:

Check the math: Does (Your Age + Lease) = 95?
Prepare for Cash: If the answer is No, expect to pay more cash upfront as your CPF and Loan limits will be reduced.
Resale Value: Remember that future buyers will face even stricter CPF limits, which may affect your eventual selling price.