How to compute the amount of CPF savings usage for property that is less than 60 years lease?
For HDB flats/private properties with leases of less than 60 years, the following rules apply:
1) No CPF can be used if the remaining lease of a property is less than 30 years.
2) A property owner is eligible to use his CPF for the property if his age plus the remaining lease of the property is at least 80 years.
3) The maximum amount of CPF that can be used is capped at a percentage of the lower of the purchase price or the value of the property at the time of purchase. The percentage is computed based on the remaining lease of the property when the youngest eligible member using CPF reaches age 55, as shown below:
Let see the example below:
Jane (25 years old) and John (35 years old) are intending to buy a property with a remaining lease of 58 years.
The property purchase price is $400,000.
The value of the property is $410,000.
When Jane turns 55, the remaining lease is 58 - (55-25) = 28 years.
The maximum amount of CPF saving that Jane and John can use is 28/58 = 0.48 (or 48%) of the lower of the purchase price or value of the flat. Therefore, the maximum amount of CPF is 48% of $500,000 = $192,000 from their Ordinary Accounts to pay for their property.
Another simple way is to use the below table to work out the percentage to be applied on the lower of the purchase price or the value of the property at the time of purchase.
Source: CPF Board