What happens to CPF Charge on Property after 55 if meet FRS?

[thevaluefund]

This is a niche case of mine. But I can't find the answer anywhere on CPF website.

1. I use my OA to service my bank loan. There is a CPF Property charge.

2. At 55, I already meet the FRS and MA from my SA and MA.

3. In theory, there shouldn't be any more CPF Property Charge as I fulfilled my obligations to the CPF already right ? My previous OA and future OA payments for pay loan should not attract a CPF Property charge ?


PS: It seems dumb there is a CPF Charge but there is no explicit wording that says the CPF Charge automatically expires once FRS is met.

 

[henrylbh]

If I am not wrong, under the new ruling, the charge will always be there until CPF used is returned first to release the charge or you uplorry.

 

[thevaluefund]

I also read between the lines that it stays until u return or uplorry. But this is illogical if they let u withdraw anything in OA/SA above FRS.

I actually 45 currently and meet FRS and MA limit liao. Auto compounding at current interest rates, this should still meet the new FRS and MA limits in 10 years time.

If I am not wrong, under the new ruling, the charge will always be there until CPF used is returned first to release the charge or you uplorry.

 

[whitesand]

If I am not wrong, under the new ruling, the charge will always be there until CPF used is returned first to release the charge or you uplorry.

This is want I understood fr CPF:

1. The charge will still be there. If you want to remove that charge now, got to get a lawyer to remove it (since you met FRS, CPF will agree), which cost money.

2. Alternatively, you can just leave the charge there, till someday you sell/transfer your property, and get the lawyer to remove the charges at the same time. This is more convenient and probably cost less as your lawyer to doing it together.

 

[eric3743]

I also read between the lines that it stays until u return or uplorry. But this is illogical if they let u withdraw anything in OA/SA above FRS.

I actually 45 currently and meet FRS and MA limit liao. Auto compounding at current interest rates, this should still meet the new FRS and MA limits in 10 years time.

This is all about proper accounting procedure.

What is taken out need to be returned + interest to your account as like it is there all along.

The point on CPF is whatever go in will have stay there until to the point that you are allow to withdraw based on conditions.

Anyway it is still your monies but the money flow in & out have to be recorded in your account statement.

Taking CPF out for housing do not mean as withdrawal but as merely a loan from your own CPF account managed by CPF Board.

 

[henrylbh]

This is all about proper accounting procedure.

What is taken out need to be returned + interest to your account as like it is there all along.

No, it was not like it is there all along. Then it was there and then not there and now it not here and not there

Last time when one has met the min sum at 55, CPF principal amount withdrawn and accrued interest no longer exist. When a flat is sold, the proceeds go directly to the CPF member. Even if member wants the money to go back CPF, they don’t allow.

Later on, CPF principal amount withdrawn (for 55er who met MSS) was briefly shown with accrued interest. But amount to be refunded would be shown as NIL

Then it was changed to show only CPF principal amount withdrawn from 1 Jan 2013 and the accrued interest and this is the amount that is to be refunded. But CPF principal amount withdrawn before 1 Jan 2013 was not shown.

Then it was changed to include principal amount withdrawn before 1 Jan 2013 and this is distinguished from CPF principal amount withdrawn from 2013 and the total accrued interest (with no distinction). But another line would show only CPF principal amount withdrawn from 2013 and its related interest and this is the amount that need to be refunded

So why care about CPF charge on property when panadol can't help the above can and cannot.

 

[The_Davis]

This is want I understood fr CPF:

1. The charge will still be there. If you want to remove that charge now, got to get a lawyer to remove it (since you met FRS, CPF will agree), which cost money.

2. Alternatively, you can just leave the charge there, till someday you sell/transfer your property, and get the lawyer to remove the charges at the same time. This is more convenient and probably cost less as your lawyer to doing it together.

where did you read about this?

 

[terence2112]

No, it was not like it is there all along. Then it was there and then not there and now it not here and not there

Last time when one has met the min sum at 55, CPF principal amount withdrawn and accrued interest no longer exist. When a flat is sold, the proceeds go directly to the CPF member. Even if member wants the money to go back CPF, they don’t allow.

Later on, CPF principal amount withdrawn (for 55er who met MSS) was briefly shown with accrued interest. But amount to be refunded would be shown as NIL

Then it was changed to show only CPF principal amount withdrawn from 1 Jan 2013 and the accrued interest and this is the amount that is to be refunded. But CPF principal amount withdrawn before 1 Jan 2013 was not shown.

Then it was changed to include principal amount withdrawn before 1 Jan 2013 and this is distinguished from CPF principal amount withdrawn from 2013 and the total accrued interest (with no distinction). But another line would show only CPF principal amount withdrawn from 2013 and its related interest and this is the amount that need to be refunded

So why care about CPF charge on property when panadol can't help the above can and cannot.

You must have inside knowledge to know this. Not any layman can understand this.
But yes, you are spot on.

 

[henrylbh]

where did you read about this?

Most of us get info from reading news and publications and CPF website and cocktails from forums and friends and then make our own cocktail No?

 

[whitesand]

where did you read about this?

Asked CPF Board, and their staff told me.

 

[SBC]

Is TS concern more of passing down the property involved?
Or the servicing of the mortgage using CPF?

 

[The_Davis]

Asked CPF Board, and their staff told me.

you mean this is unspoken rule and not available on website???

 

[henrylbh]

you mean this is unspoken rule and not available on website???

No every rules is available in the website, only common and less complicating ones.

For example, how many knows that when a member dies, all his accounts will be merged into one OA the following month. If not drawn out, it will cease to earn interest after 7 years.

 

[The_Davis]

No every rules is available in the website, only common and less complicating ones.

For example, how many knows that when a member dies, all his accounts will be merged into one OA the following month. If not drawn out, it will cease to earn interest after 7 years.

hmm...........

should we have one thread for what happens to your cpf after you die?

 

[henrylbh]

hmm...........

should we have one thread for what happens to your cpf after you die?

I see no need. It's clear enough that every cent will go to the nominee or to the public trustee - only when nominee decides to leave the bequest where is it and no many do.

 

[thevaluefund]

Thanks for the inputs. However, in theory, we can also have a CPF charge of zero. No legal fees needed. Perheps you are right that it becomes notional once u meet FRS ie for show, no effect.

Has anyone experienced this scenario yet ? Keen to hear what happened in your case.

I will write to CPF but don't know if CSO will understand. Sigh.

This is want I understood fr CPF:

1. The charge will still be there. If you want to remove that charge now, got to get a lawyer to remove it (since you met FRS, CPF will agree), which cost money.

2. Alternatively, you can just leave the charge there, till someday you sell/transfer your property, and get the lawyer to remove the charges at the same time. This is more convenient and probably cost less as your lawyer to doing it together.

 

[thevaluefund]

waliao. I need panadol.

No, it was not like it is there all along. Then it was there and then not there and now it not here and not there

Last time when one has met the min sum at 55, CPF principal amount withdrawn and accrued interest no longer exist. When a flat is sold, the proceeds go directly to the CPF member. Even if member wants the money to go back CPF, they don’t allow.

Later on, CPF principal amount withdrawn (for 55er who met MSS) was briefly shown with accrued interest. But amount to be refunded would be shown as NIL

Then it was changed to show only CPF principal amount withdrawn from 1 Jan 2013 and the accrued interest and this is the amount that is to be refunded. But CPF principal amount withdrawn before 1 Jan 2013 was not shown.

Then it was changed to include principal amount withdrawn before 1 Jan 2013 and this is distinguished from CPF principal amount withdrawn from 2013 and the total accrued interest (with no distinction). But another line would show only CPF principal amount withdrawn from 2013 and its related interest and this is the amount that need to be refunded

So why care about CPF charge on property when panadol can't help the above can and cannot.

 

[NewInvestor]

Thanks for the inputs. However, in theory, we can also have a CPF charge of zero. No legal fees needed. Perheps you are right that it becomes notional once u meet FRS ie for show, no effect.

Has anyone experienced this scenario yet ? Keen to hear what happened in your case.

I will write to CPF but don't know if CSO will understand. Sigh.

Just passed 55. CPF charge is still there. No problem for me cos I m happy for money to return to CPF if I sell the house. Then I decide what to do with the CPF funds later.

Spoke to a lawyer. He can get the CPF charge discharged but I will hv to pay his fees.

 

[thevaluefund]

Thanks for sharing your actual experience. Looks like this becomes a moot accounting exercise for CPF/Lawyers to suck more blood.

Just looks silly for those who meet FRS/ERS.

Just passed 55. CPF charge is still there. No problem for me cos I m happy for money to return to CPF if I sell the house. Then I decide what to do with the CPF funds later.

Spoke to a lawyer. He can get the CPF charge discharged but I will hv to pay his fees.

 

[henrylbh]

Just passed 55. CPF charge is still there. No problem for me cos I m happy for money to return to CPF if I sell the house. Then I decide what to do with the CPF funds later.

Spoke to a lawyer. He can get the CPF charge discharged but I will hv to pay his fees.

Under present rules, charge will always be there as long as CPF savings are used for property and not returned, even if one has met FRS at 55.

When one meets FRS at 55, can pay lawyer to remove the charge. But what for?

If charge is not removed, when the property is sold, the money must first go back to CPF with accrued interest, before one is allowed to apply to withdraw amount above FRS.

If charge is removed, proceed from sale of property will go directly to the seller. However, if one decides subsequently to go for BRS, there will be legal fee involved in creating the pledge/charge.

In conclusion, there is no harm living with the charge except for slight delay in getting the money out of CPF.

Although it matters not to most, some people like me would prefer that the CPF plus accrued interest go back to CPF when the property is sold as it is not possible if there is no charge.