And there's many people up in arms.
It's a lease. Everyone knows that.
Yet people don't want to recognize it as a 99 year rental agreement.
People tell themselves many stories, fluff up their own thoughts. Ownself bluff ownself.
A lease is a lease. End of story. You don't own the place.
End of the lease, the property goes back to the OWNER... The REAL person who owns the place.
It's been really good marketing.
Selling Singaporeans the idea that they own their property. Regardless whether it's HDB or Condo.
Of course this idea goes back to when the Government marketed HDBs as growth assets.
And it's true. HDBs are growth assets for a period of time.
People buy the prepaid rent.
Then they live in it for 5 years. Due to inflation, market rent is much higher than the prepaid rent offered by HDB or the condo developer, so people are now able to sell their unused rent at market rates. Which is higher than what they initially paid for it.
Then people try to tell themselves that they own the place. They say, if you don't own it, you don't pay property tax, you don't pay conservancy fees, etc...
HELLO... those are the terms of rental.
It's like a clause in the rental contract... Just terms and conditions...
Landlord is willing to rent you his property if you are willing to pay for conservancy charges, pay his property tax, pay for upgrading, etc...
And since you sign the terms of this "rental agreement" then you have to cover the costs of all these things.
But make no mistake. People don't own the property for a 99 year lease... Heck people don't even own the property of a 999 year lease.
Just cos the renter pays for all the miscellaneous fees doesn't make the person the owner of the place.
So why is it so hard for people to understand this?
Well, I think could be due to a combination of multiple factors.
1. The Government has consistently used the term "home ownership".
Keep saying it and people will believe it.
2. People like the idea of owning their own place.
It's a good feeling. So people like to tell themselves that they own their own place.
Ownself bluff ownself also feels good.
3. 99 years is a long time.
Humans aren't really good at planning for the future. They think 99 years is a long time. And it is...
For most part, 99 years is a long time. So people don't need to think about the lease expiring.
4. The ability to keep moving.
Many people keep moving. So they don't need to think about the concept of a lease. They just stay in a place for 10 years, then sell and move, and repeat. They'll never need to bother about the lease expiring. Just need to keep downgrading the location, or size and keep the lease remaining long.
5. You pay to the bank.
People don't have to pay "rent" cos... prepaid rent ma. They borrow from the bank to pay the "landlord" a lump sum. You don't pay it regularly to the landlord. So psychologically, people don't relate the payment to the landlord when they stay in it.
Change the payment terms to paying HDB monthly like any rental agreement and see how fast people will realize that it's rent, even though it's 99 years.
6. Miscellaneous fees.
For people who rent regularly, they don't need to pay certain fees, like property tax, light bulbs, upgrading costs, etc...
So when people need to pay for these, they relate it to ownership...
But as I said above, all these could easily be included into any rental agreement.
Some rental places have free utilities, some rental places, the tenant pays for utilities.
Some rental places have free facilities, some rental places, the tenant pays for facilities...
So similarly, the terms of rental could be adjusted to have the tenant pay for anything else. It's an agreement between the landlord and the tenant.
There's probably other psychological reasons which I didn't think of...
But it is what it is...
There's no other way to think about it. 99 year lease is a lease.
You don't own it.
Although practically, there's ways to work around the situation. Like moving every 10-15 years. Then you won't experience the lease expiring, cos it's always "renewed".
So bottom line, it's a lease, you don't own the HDB or any property on lease. But it's possible to work around it, such that the expiration of the lease doesn't affect us.
And just for fun... you own your car... You just can't use it if you don't have COE. Different from HDB...
The effect is similar, when the COE expires you can't use the car, but technically, you actually own the car. The car isn't on lease.
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