Ultimate SERS HDB Guide: Is Getting Chosen for SERS a Blessing or Curse?

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23 Jul 2022

If you are one of the many Singaporeans who own a Housing and Development Board (HDB) flat, one of the key concerns you might have is the number of years left on the lease.

After all, even if you are lucky enough to have gotten a new Build To Order (BTO) flat, you can own your HDB flat for up to 99 years.

This means that at some point in time, our property will depreciate in value. Or, as some property experts call it, lease decay.

This lease decay situation is why most Singaporeans tend to celebrate like they won the lottery when they find out their flat is selected for the Selective En bloc Redevelopment Scheme (SERS) scheme.

Under this scheme, those who own an ageing HDB flat selected for SERS can swap out their old flat for a similarly sized new one with a 99-year lease at a relatively low cost.

But, this narrative that being chosen SERS is a ‘guaranteed windfall’ was challenged recently.

Residents living in the four Ang Mo Kio flats chosen for SERS in April this year were shocked to find that they might have to pay up to $100,000 for a SERS replacement flat of roughly the same size as their flats only had about 57 years left on the lease. This contrasts with past SERS exercises where flats had about 70 years left on the lease.

And when this matter was reported in the news, many Singaporeans complained that the residents were not being treated fairly as not only were they forced to move out, they had to choose a smaller flat if they did not top up money.

In response to the feedback, the Government announced two new rehousing options for those residents with flats selected for SERS, starting with the latest Ang Mo Kio SERS exercise.

With that in mind, here’s all you need to know about the SERS scheme in 2022!

TL;DR: SERS HDB Guide — SERS Payout And SERS Scheme Explained

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What Is the SERS Scheme?
SERS Eligibility
How Much is SERS Compensation?
SERS Rehousing Benefits Explained
Pros and Cons of SERS
What Happens During SERS?
SERS Options: Curious Case of the Ang Mo Kio Enbloc
Restrictions on Selling SERS Replacement Flat

What Is SERS Scheme? Is it HDB En Bloc?

SERS was started back in August 1995 as an urban redevelopment strategy employed by the HDB to redevelop and renew older HDB estates.

Under this scheme, a select group of flats in older estates are bought back by the Government for redevelopment. Residents of these flats would then be offered a new home with certain rehousing benefits.

Think of it like HDB’s version of the ‘en-bloc process ‘but with some key differences.

SERS Eligibility

If your flat is on a site chosen for SERS, it is compulsory for you to participate in this scheme.

Private En Bloc Definition vs HDB En Bloc Definition

Put simply, an en bloc sale is the sale of two or more property units to a single common purchaser.

More specifically, an en bloc sale refers to a collective agreement where the majority of the development’s property owners agree to sell their property to a developer.

For property owners, the best case scenario is when the compensation price is more than the purchase price of the individual apartments. This is why en bloc sales are frequently described as windfalls, as the property owners would likely have earned a significant profit.

Generally, for private en bloc sales, you have somewhat of a choice in the matter as you can either vote in favour of the sale or otherwise. But if the majority of the owners voted in favour of the en bloc sale, the sale will still go through even if you voted against it.

However, as mentioned above, if your flat is on a site chosen for SERS, you have no choice but to sell your flat to the Government and accept the compensation.

How Much is SERS Compensation?

If your flat is selected for SERS, you will be entitled to compensation based on the open market value of the flat.

At the time of the SERS announcement, residents will be given an estimate based on recent transactions of comparable resale flats in the area.

The actual compensation amount will be determined by a professional private valuer who will assess the price based on the following factors at a later date:

Recent transaction prices of similar resale flats in the area
Remaining lease of the flat
Renovation work and improvements made to the home
Type, size and level of flat
Existing and upcoming amenities and infrastructure in the area.

SERS Rehousing Benefits Explained

In addition, you will be given rehousing benefits depending on your chosen option.

HDB has stated that these rehousing benefits will vary depending on your household status:

First- and second-timer
Non-Citizen Spouse household
Singapore Permanent Resident (SPR) household
Remaining Single and Joint Singles household
Single Singapore Citizen (SC) household
Third-timer and household who has had SERS benefits before
Private property owner.

According to HDB, you can expect to receive:

SERS Grant (up to $30,000) to pay for a replacement flat
Reasonable moving expenses (determined by HDB)
Waiver of the payment of stamp and legal fees for the purchase of a replacement flat equivalent in value to their SERS flat
Concessions on resale levy or premium.
- Capped at $30,000, different payment options are available, including deducting the amount from the SERS compensation.
- Note that you will pay the resale levy or premium if you had previously sold a flat bought directly from HDB, or a unit, which can be a resale flat, DBSS flat or EC, bought with a CPF Housing Grant and had chosen to pay a deferred resale levy or premium.
  If you sold your first subsidised flat between July 1985 and May 1997 and chose to pay the premium, you may now change the option to resale levy (up to $30,000) if it is more favourable.
Waiver of administrative fees
- Administrative and booking fees for the replacement flat
- $10,000 premium on top of the purchase price when buying a flat directly from HDB (for first-timer SC/SPR household)
- Resale levy or premium if you bought the SERS flat directly from HDB or from the open market with a CPF Housing Grant.

But is SERS a good or bad thing? Let’s look into the Pros and Cons of SERS to find out.

Pros of Being Selected for SERS

SERS rehousing compensation benefits
A new home with a fresh lease of up to 99 years
A fresh start with a new environment and a chance to meet new neighbours.

Cons of Being Selected for SERS

Forced to uproot and move to a new home nearby
Moving homes and a change in living environment might be disruptive and stressful for the elderly
Residents might have to settle for a smaller replacement flat if they do not want to top up money.

What Happens During SERS?

So if you were wondering, here’s a step-by-step guide on what will happen during the SERS process, which can take up to four years (via HDB):

Step 1 – Announcement: HDB will announce the flats that have been chosen for SERS.
Step 2 – Exhibition: HDB will hold an exhibition on SERS near you so you can learn more about your new home. You might want to avoid visiting during the evenings and weekends, as the exhibition can get quite crowded then.
Step 3 – Flat Valuation: A professional private valuer will make an appointment with you to assess the market value of your flat.
Step 4 SERS Connect: Your HDB officer-in-charge will arrange for a meeting with you at HDB Hub, Lorong 6 Toa Payoh, to perform a Collector’s Inquiry.
At this meeting, HDB will confirm who owns the flat and help you with the financial planning for your replacement flat.
HDB will conduct a survey on your preferred type of flat, which will help us decide on the flat mix for the replacement flats.
Step 5 – Precinct Survey: In the precinct survey, HDB will ask you for your preferred facilities. You will also get to name your new home.
Step 6 – Compensation Notice: HDB will inform you how much compensation you will receive.
Step 7 – Rehousing Choice: You can choose from the available rehousing options. HDB officers will be on hand to help explain your options, which will help you make a well-informed decision.
Step 8 – New Flat Registration: If you choose to move to the designated replacement site, you can register for a new flat by submitting the application to HDB.
If you would like to continue living close to your neighbours in the designated replacement site, the Joint Selection Scheme is perfect for you.
Under this scheme, up to six households will be invited to choose their flats on the same day. If you and your neighbours ask for the Joint Selection Scheme in your flat application, HDB will issue a single queue number to everyone. Among the households, there will be individual queue sequences, and there is no priority given in the selection of a replacement flat.
Step 9 – New Flat Selection: HDB will provide you with the sales brochures, price lists, and your balloted queue number before the selection begins. You will need to come down to HDB Hub at Lorong 6 Toa Payoh to book your new home.
Step 10 – Key Collection: When your flat is ready, you need to come to HDB Hub at Lorong 6 Toa Payoh for your key collection appointment, where you will get the keys to your new home.
After paying off what you owe on your SERS flat, you may choose to use the rest of the compensation amount to help pay for your new home or ask for an advance of up to $35,000 to help with your renovation.
Step 11 – Moving Out: After the key collection, you have up to four months to renovate and move into your new flat.
When you return the SERS flat, you will receive your balance compensation (if any).

SERS Options: Curious Case of the Ang Mo Kio Enbloc

But, this narrative that being chosen SERS is a ‘guaranteed windfall’ was challenged recently.

Residents living in the four Ang Mo Kio flats chosen for SERS in April this year were shocked to find that they might have to pay up to $100,000 for a SERS replacement flat of roughly the same size.

In response to the feedback, the Government announced two new rehousing options on 2 July 2022 for those residents with flats selected for SERS, starting with the latest Ang Mo Kio SERS exercise.

These options will also be extended to flat owners of Blocks 212 to 218 Marsiling Crescent/Lane, whose flats were announced for acquisition on 26 May 2022 for the redevelopment and extension of Woodlands Checkpoint. as well as all future SERS projects as well.

New SERS Rehousing Options

Here are the two new options:

Option 1: 3-Room or Larger Flats With a 50-Year Lease

Offer 3-room or larger flats on a 50-year lease, at the designated replacement sites, if this can last flat owners till at least age 95.

To be eligible, the flat owners and their spouses must be at least 45 years old at the point of the SERS announcement.

Option 2: Extension of Lease Buyback Scheme For Seniors

Flat owners who are at least 65 years old and have not taken up the Lease Buyback Scheme (LBS) can also consider taking up the LBS option for their existing SERS flat if they are eligible for LBS. Previously, SERS flat owners could no longer apply for LBS after their flat had been announced for SERS.

Under LBS, flat owners can retain a lease length that will cover them and their spouse till they are at least 95 years old and sell the remaining tail-end lease to HDB.

The proceeds from selling the tail-end lease are used to top up their CPF Retirement Account (RA) and purchase a CPF LIFE plan that will provide them with a monthly payout for life.

They will also enjoy an LBS cash bonus of up to $30,000/$15,000 for 3-room and smaller/4-room flats, respectively, for the CPF RA top-up.

Existing SERS Rehousing Options

In addition, residents can choose from these rehousing options.

Option 1: Take up a New Flat at the Replacement Site With a 99-Year Lease

The first option is to purchase a new 99-year lease flat at the designated replacement site.

The new flats are priced with a generous subsidy, making their prices considerably lower than comparable resale flats in the vicinity.

On top of the subsidised flat prices, eligible flat owners will also receive a SERS grant of up to $30,000 to purchase a replacement flat.

In addition, residents aged 55 and above can choose to buy a 2-room Flexi flat on a short lease.

Option 2: Apply for a BTO or Sale of Balance (SBF) or Open Booking Scheme Flat With Rehousing Benefits

Flat owners may also choose to apply for a flat elsewhere with SERS rehousing benefits under the Build-To-Order (BTO) or Sale of Balance Flats (SBF) exercise or open booking.

Note that if you would like to apply for a Prime Location Public Housing (PLH) flat elsewhere with rehousing benefits, you need to meet the prevailing eligibility conditions for the purchase of a BTO flat.

HDB has also stated that they give priority allocation to those who are chosen for SERS:

We set aside up to 10 per cent of the flats offered in BTO or SBF exercises for priority allocation under the Resettlement, Relocation, SERS, and Tenants’ Priority Scheme, for eligible households. This does not include flats launched under the Prime Location Public Housing model or under open booking. Under this priority scheme:

If the number of applications that we receive is within 10 per cent of the flat supply, all applicants will be able to book a flat

The order in which we invite applicants to choose their flat will be decided in a ballot with the other public applicants

The selling prices of the HDB flats will be the same as that offered to public applicants

If you have been shortlisted to book a flat under a BTO or SBF exercise or booked a flat under the open booking and then decide not to carry on with your public sales application, we will place you at the back of the selection queue for a new flat at the designated replacement site.

Option 3: Sell or Transfer SERS Flat With Rehousing Benefits

In addition, you can choose to sell or transfer your SERS flat with the SERS rehousing benefits.

To give you more time to find out the SERS rehousing benefits before making the decision, there will be a one-month freeze on the resale or transfer of your flat.

You may grant the Option to Purchase for resale and submit the resale application or submit your transfer application after that. You cannot sell your SERS flat if you have previously enjoyed SERS rehousing benefits.

Option 4: Receive $30,000 Ex-Gratia Payment on Top of Compensation Instead of SERS Rehousing Benefits

You can also choose to return the SERS flat and receive an ex-gratia payment of $30,000 plus the SERS grant (if eligible) on top of their compensation.

By doing so, you will forgo the SERS rehousing benefits.

If you want to learn more about these options, you can head to HDB’s website.

Restrictions on Selling SERS Replacement Flat

One more thing.

If you plan to sell your SERS replacement flat, make note of the changes HDB made to the requirements for selling replacement flats under SERS.

Selling Replacement SERS Flats Before 7 April 2022

For SERS sites announced before 7 April 2022, you could sell your replacement SERS flat at the designated replacement site(s) either of the following options, whichever is earlier:

Seven years from the date of selection of the replacement flats
Five years from the date of collecting the keys.

With portable rehousing benefits:

5 years from the date of collecting the keys

Selling Replacement SERS Flats On or After 7 April 2022

But for SERS sites announced on or after 7 April 2022, you can only sell the SERS replacement flat five years from the date of collecting the keys.

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About Joel Koh

History student turned writer at Seedly. Before you ask, not a teacher. I hope to help people make better financial decisions and not let money control them.

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