Superannuation savings used for house purchases works in Singapore

Junice Liew, a Singaporean resident, is looking to purchase her first property in the city state.

With house prices the way they are, fortunately the 40-year-old marketing manager is able to tap her Singaporean superannuation savings to help put down a deposit.

Singaporeans typically contribute 20 per cent of their salary into super, while employers contribute another 17 per cent. It is a hefty sum, but Liew is grateful for the flexibility that the system provides. Liew has also used super to pay for medical procedures for her and her mother, who lives in Malaysia.

Liew concedes that younger consumers may not be so enamoured at having to pay 20 per cent of their monthly salary into a retirement fund, but at her stage of life, she is content.

“With budgeting, 20 per cent is quite all right, because I am focused on buying a place. I’m Generation X looking to buy property. It’s a good saving,” says Liew, who hopes to purchase a one-bedroom condo this year.

In Singapore, an individual’s super contributions are distributed between three separate accounts: an ordinary account that can be used to buy property and cover education costs; a medisave account that can be used to meet hospital and medical expenses; and a special account that is dedicated to expenses incurred in old age.

Liew must have 5 per cent of the deposit herself and she can then withdraw 15 per cent of the deposit from her ordinary account. She can withdraw all the money from that account if required.

“If I didn’t have the money in that account, I would have to tap into my Australian savings,” Liew says.

PUBLISHED: Wednesday, 11 March 2015

@Jurds Real Estate – Cessnock and Hunter Valley Wine Country Property Experts – the place to buy, sell and lease property in Cessnock and the Hunter Region.

The Australian Financial Review
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Superannuation savings used for house purchases works in Singapore