CPF Property Changes from 1st Jan 2009

Finally I saw something in the CPF website here that says something about the CPF rule change announced some time back.

From 1st Jan 2009, if you sell your property purchased using your CPF savings, you will need to return to your CPF the amount that you've withdrawn from the CPF for the property, including accrued interest. The amount to be returned is capped to your minimum sum.

If your bank has first charge over your loan (non HDB loan), the bank loan has to be settled first before money is returned to CPF. If CPF has first charge (HDB loan), the amount will be returned to your CPF first.

These are 2 examples from the CPF website:

Example 1
Member X is 58 years old and intends to sell his property.

(a)	Member’s Minimum Sum	$90,000
(b)	Balances in Retirement Account (excluding interest earned)	$30,000
(c)	Property pledge plus the accrued interest on the pledge	$51,000 (Property was pledged for $45,000 at age 55)
(d)	Principal CPF withdrawn for the property plus the accrued interest	$100,000

If he sells his property before 1 January 2009, he has to refund the property pledge plus the accrued interest on the pledge of $51,000 to his CPF Retirement Account (RA).

If he sells his property on or after 1 January 2009, he has to refund $60,000 [i.e. (a) – (b)] to his RA to meet his full Minimum Sum.

Example 2
Member Y is 60 years old and intends to sell his property. However, he has used less CPF moneys for his property, and has pledged his property for a lower amount.

(a)	Member’s Minimum Sum	$80,000
(b)	Balances in Retirement Account (excluding interest earned)	$30,000
(c)	Property pledge plus the accrued interest on the pledge	$39,000 (Property was pledged for $33,000 at age 55)
(d)	Principal CPF withdrawn for the property plus the accrued interest	$37,000

If he sells his property before 1 January 2009, he has to refund the property pledge plus the accrued interest on the pledge of $39,000 to his RA.

If he sells his property on or after 1 January 2009, he only needs to refund $37,000 [i.e. (d)] to his RA. This is because while he needs another $50,000 [i.e. (a) – (b)] to meet his full Minimum Sum, he has only withdrawn $37,000 (including accrued interest) from his CPF for the property.