HDB RESALE FLATS : 'UNDER-THE-TABLE' MONEY PRACTICE

Abstract

Public housing in Singapore is subsidised housing, intended to provide shelter for those unable to afford private housing. It should not foster property speculation and profiteering. Hence, right from the beginning, the Housing and Development Board (HDB) has been stringent in its formulation of policies on resale, in order to ensure that there is no abuse through profiteering or other means. Although the HDB had revised its resale policy several times since 1971 to prevent abuse, the problem of profiteering still occurs. Since 1989, the HDB resale market has been opened to citizens and permanent residents alike, including owners of private property. This has jacked up demand and the prices of resale units, both of which were further increased by the spillover effects from the buoyant market for private residential housing. The surge in demand for HDB resale flats in April last year caused prices to rise dramatically. Stories abounded of how sellers of HDB resale flats demanded cash upfront ('Under-the-table' money) from buyers. Sellers then pocket the cash paid upfront, and under-declare a resale price that is below the actual transacted price, to save on levy fees to the HDB. Over the years, this practice became a norm in the HDB resale market. This study attempts to examine the factors that may have contributed to the 'Under-the-table' money practice and the measures that the Government has taken to curb this illegal practice.