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A resale flat bought with no grant and no HDB loan has no income ceiling

A worked RES examination question on income ceiling and first timer, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 2Lesson 6Income ceiling and first timerFree — no sign-up

The question

A family and a single applicant are each checking the income ceilings for their intended purchases. The family may add extended relatives to the household, while the single is looking at a two-room Flexi Build-To-Order flat. Each is quietly worried a high household income will shut them out, and wants to know exactly which ceiling, if any, bites on their intended purchase. Both parties have heard alarming talk that a single high earner in the household can sink an application, and each wants the real position on the income ceilings pinned down.

Consider the following statements.

  1. (i) The income ceiling for a Singles Scheme Build-To-Order flat is $7,000 a month.
  2. (ii) The income ceiling for most family Build-To-Order flats is $14,000 a month.
  3. (iii) A resale flat bought with no grant and no HDB loan is still subject to an income ceiling.
  4. (iv) The income ceiling for an extended or multi-generation family is $21,000 a month.
  1. A. (i), (ii), (iii) and (iv)
  2. B. (i) and (ii) only
  3. C. (ii) and (iv) only
  4. D. (i), (ii) and (iv) only

The answer, and why

Answer: D

The rule. Income ceilings: Singles Scheme BTO $7,000; most family BTO $14,000; extended/multi-generation family $21,000. A resale flat bought with no grant and no HDB loan has no income ceiling.

Why D is correct. (i), (ii) and (iv) are right; (iii) is false.

The other options.

  • A adds the false (iii), a resale income ceiling.
  • B drops (iv), the $21,000 extended-family ceiling.
  • C drops (i), the $7,000 singles ceiling.

Exam note. $7k singles, $14k family, $21k extended; no ceiling on a resale flat taken without grant or HDB loan.

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