The Singapore government Housing Development Board (HDB) claimed that it lost S$2.02 billion in taxes from its home ownership programme, despite profitting more than S$679 million in HDB rental business and other business segments.
Minister for National Development (MND) Khaw Boon Wan said that the HDB will expect to see more losses because HDB flats are still being completed. However Minister Khaw did not explain how did the S$2.02 billion losses came about.
HDB incur losses to another government statutory board, the Singapore Land Authority (SLA), of which it buys residential land from on a 99 year lease. HDB losing S$2.02 billion is akin to SLA profiting S$2.02 billion. There is no net loss from the Singapore Government. Residential land bought from HDB are priced at market rate, which explains the hefty and increasing “losses” incurred by HDB.
On the contrary, the Singapore Government is making an undisclosed profit by selling HDB flats at a price higher than its construction costs, where real taxes are made to pay private construction contractors. The HDB refuse to declare its construction cost of building a HDB flat excluding land costs, out of fear that Singaporeans will demand housing prices to go lower.