For an elderly owner sitting on a paid up flat but short on monthly income, the Lease Buyback Scheme offers a middle path between selling outright and simply making do. It converts part of the flat's value into income, without requiring a move.
How the scheme works
Under the Lease Buyback Scheme, an eligible owner sells a portion of their flat's remaining lease back to HDB. The value of the portion sold is calculated based on the flat's current market value, prorated to the fraction of the lease sold. The owner retains a shortened lease sufficient to cover their expected remaining lifetime, and continues to live in the flat exactly as before, the flat itself is not sold and there is no move.
Who is eligible
At least one flat owner must be aged 65 or above. Household gross monthly income must fall under a set ceiling. The flat must be a 3 room, 4 room, 5 room or Executive flat, 1 and 2 room flats are not eligible. The flat must be at least a set minimum age, and must have a minimum amount of remaining lease before the buyback. There must be no outstanding HDB housing loan or bank mortgage on the flat, and the owner must retain a minimum number of years of lease after the buyback. Confirm the exact current income ceiling and lease thresholds with HDB, as these are periodically reviewed.
Where the proceeds go, CPF top up then cash
Proceeds from the lease sold back to HDB are first used to top up the owner's CPF Retirement Account, up to the applicable retirement sum. Any proceeds remaining after that top up are paid out as cash. The CPF Retirement Account top up is what funds the lifelong monthly CPF Life payout, so the scheme is really converting a slice of illiquid flat value into a guaranteed monthly income stream for as long as the owner lives.
What you give up
The retained lease is shorter than the original, so the flat's remaining value falls. If the owner lives beyond the retained lease, or simply wishes to leave the flat to family, there is less asset value left in the estate, since the bulk of the value sold back to HDB is converted into income rather than kept as capital. This tradeoff, income now against inheritance later, is the central decision point for any family considering the scheme.
Is it right for your parents
The scheme tends to suit an owner who wants to remain in a familiar flat, needs a reliable monthly income more than a lump sum or a legacy asset, and is comfortable that the flat's eventual value to the estate will be reduced. It is worth comparing against renting out a room, or a full sale and downsizing, before committing, since each path trades income, continuity and inheritance differently.
Frequently asked questions
Does the flat get sold under the Lease Buyback Scheme?
No. The flat itself is not sold and the owner does not move out. Only a portion of the remaining lease is sold back to HDB, and the owner keeps living in the flat for the rest of their retained lease.
What happens to the flat after the owner passes away?
The retained lease is set with the owner's expected remaining lifetime in mind, but the exact treatment of the flat afterwards is a specific scheme detail that should be confirmed directly with HDB before your parents commit.
Weighing the Lease Buyback Scheme for your parents?
Winfred lays out the scheme against renting out a room or a straightforward sale, so the family can compare income, continuity and inheritance side by side.
Book a free 30 minute callWinfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence No. L31010886H). CEA R073319H. This page is for general information only and does not constitute financial, investment, or legal advice. Rates and rules reflect the position as at 9 Aug 2026; verify current figures with IRAS, HDB, or MAS before making any decision.