Disclaimer (Block 1): This article is for educational purposes only and is intended to assist CEA-registered property agents in understanding regulatory frameworks. It does not constitute financial, tax, or legal advice. LEVR's calculations are indicative only. Always verify rates and eligibility with your bank, HDB, CPF Board, or a licensed financial advisor before advising clients.
What Is the HDB Home Improvement Programme?
The Home Improvement Programme (HIP) is an HDB initiative that upgrades older HDB flats — typically those built before 1986 — with essential improvements funded primarily by HDB, with a contribution from residents and flat owners. HIP improvements are carried out on blocks selected by HDB through a residents’ ballot, and implementation is managed centrally by HDB.
The HIP covers two categories of works:
- Essential improvements: Funded by HDB at no cost to the flat owner. These typically include spalling concrete repairs, replacement of waste pipes, upgrading of the toilet, and structural repairs. Essential improvements are carried out in all units in the selected block regardless of individual owner preference.
- Optional improvements: Additional upgrades that flat owners may elect to have carried out, at a subsidised cost. Examples include replacement of window grilles, installation of a new main door, or replacement of the entrance gate. Owners who opt in pay a subsidised amount to HDB for the optional items they select.
The Upgrading Levy
When a flat that has undergone HIP is sold in the resale market, an upgrading levy may be payable by the seller. The levy applies if:
- The flat was purchased directly from HDB (not from the open market) before the HIP was carried out; and
- The seller has not yet paid the upgrading levy contribution for the block.
The upgrading levy reflects the seller’s share of the cost of the essential HIP works carried out on the block. The levy amount is determined by HDB and varies depending on the block and the extent of works carried out. Typical levy amounts range from a few hundred to a few thousand dollars, but agents should always confirm the exact outstanding amount with HDB before finalising the pricing discussion with the seller.
How to Check for an Outstanding HIP Levy
Sellers and agents can check whether an outstanding HIP levy exists by:
- Logging into the HDB Resale Portal and checking the flat details — any outstanding levy will be reflected in the flat’s resale information.
- Contacting HDB directly by calling the HDB Branch managing the flat, or via the HDB website enquiry form, to request confirmation of outstanding amounts.
- The seller can also check their HDB correspondence for the original HIP ballot and contribution notice, which will state the amount and payment status.
HIP II and Enhanced HIP
HDB introduced HIP II and the Enhanced HIP (eHIP) for older blocks built between 1987 and 1997. These programmes extend the HIP framework to a newer cohort of flats. The same levy principles apply — any outstanding levy from HIP II or eHIP works must be settled at resale.
Agents listing flats from blocks built in the 1970s through 1990s should check whether the block is on a current or scheduled HIP programme, as mid-programme blocks may have levy obligations that are not yet reflected in the resale portal.
Impact on Pricing and Agent Advisory
An outstanding HIP levy reduces the seller’s net proceeds from the resale. Agents should:
- Check for an outstanding levy before advising the seller on a minimum acceptable offer price, and factor the levy deduction into the net proceeds calculation.
- Inform the buyer’s agent if an outstanding levy exists, as buyers may factor the levy into their offer — the levy reduces the seller’s net proceeds but does not increase the buyer’s cost. The purchase price is agreed between the parties; the levy is deducted from the seller’s side at completion.
- Advise sellers that the HIP improvements — particularly the toilet upgrade and waste pipe replacement — are a genuine improvement to the flat and may support a higher asking price compared to similar flats on blocks that have not yet undergone HIP.
Frequently Asked Questions
Q: If the seller paid the optional improvements contribution, does the buyer benefit?
A: Yes. Optional improvements elected and paid for by the seller (e.g., a new main door, replacement window grilles) become part of the flat and are included in the resale. The buyer inherits the improved flat. The seller cannot remove or charge separately for HIP optional improvements that have been installed, as they are fixtures that form part of the flat at the time of the OTP.
Q: Does the buyer need to pay anything toward the HIP if the works are ongoing at the time of purchase?
A: If HIP works are ongoing at the time of resale, the situation depends on the stage of the programme and HDB's billing. Typically, the outstanding levy (if any) is settled by the seller at completion from the sale proceeds. The buyer takes possession of the flat once works are complete. Agents should check with HDB to confirm the outstanding balance and whether any ongoing works will affect possession timing.
Q: Does a completed HIP affect the flat's CPF usage or loan eligibility for the buyer?
A: HIP completion does not directly affect CPF usage limits or loan eligibility. These are determined by the flat's remaining lease and the buyer's financial profile. However, the improved condition of a HIP-completed flat may support a higher valuation, which in turn affects the CPF drawdown and loan quantum available to the buyer based on the assessed value.
Disclaimer (Block 3): LEVR's calculator outputs are estimates based on inputs provided and current regulatory parameters as known at time of publication. They are not a guarantee of borrowing capacity, stamp duty liability, or CPF eligibility. Regulatory thresholds and rates may change. Always verify with IRAS, your bank, or a licensed financial advisor before making financial decisions.