Housing fund is designed to minimise borrowing

THE new housing fund scheme is designed towards encouraging the public to save up, not maximise their ability to borrow money from the banks, the Permanent Secretary of Finance stressed yesterday.

Realtors in the country have recently said that the new housing fund and saving scheme through the Employees Trust Fund (TAP or Tabung Amanah Pekerja), will have a positive impact on the property market in Brunei and grant buyers greater borrowing ability, a previous report said.

The senior government official who requested not to be named, said it was "very important to know that this scheme was never meant to maximise any individual's ability to borrow money from the bank."

"It was intended to enhance the ability to own homes via savings, not by way of applying for a loan and maximise your entitlement for loan and pay back later," he said during an interview following a roadshow organised for the Ministry of Finance's personnel yesterday.

He noted that the new scheme is not supposed to prevent civil servants from applying for the existing housing loan programme provided by the government but through the new scheme, the public servants would not have to borrow beyond their financial capabilities.

"So it's more towards saving culture, people save, at the end of the day, you get the outcome of that savings."

The permanent secretary explained that as the scheme was aimed at the low-income groups, "there is no question of trying to prop up the property market."

"I think that's not part of the consideration in terms of the policy that we've designed for this scheme."

A representative from one of the real estate agencies in the previous report said that the revised civil servant scheme would allow public servants to have a greater borrowing ability and "give renewed hope to many people who dream of owning a home."

Another said that the scheme would improve the borrowing ability and secure bigger loan amounts with financial institutions as previously most local buyers could only borrow up to 80 per cent of the total house cost.

His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam, had announced in his 66th Birthday titah, that TAP members, particularly those with low incomes, would have access to a new housing fund scheme.

Contribution into this scheme is voluntary and no contribution is required from the player, a TAP statement read yesterday.

It added that participants who receive an income of not more than $6,000 monthly will receive guaranteed dividend rate of not less than three per cent per annum on their savings.

The government will provide assistance to top up any shortfall in the dividend should the declared TAP's dividend rate is lower than three percent.

The Finance Ministry in collaboration with TAP yesterday held the first series of roadshows as an initiative to enhance the public understanding on the new scheme.

The presentation was delivered by TAP's Managing Director Norliah Hj Kula, who explained that the objective of the scheme was to encourage the public, especially the Bruneian citizens who are TAP members to prioritise the aim of home ownership within one's means by fostering a savings culture.

It is also to enable TAP members who have met the eligibility criteria, to own a house as early as possible to reduce housing debt after retirement.

The scheme will be effective from the August 1, 2012.

The Brunei Times