Will My CPF Withdrwal Limit be Reduced when Refinance Loan?

[Dennis Ng]

One of the common questions people asked us is this:

I bought my property in year 2006 when CPF withdrawal limit for property is 132%. If I refinance my property now, how will this affect the CPF withdrawal Limit?

Dennis Ng's comments:
Just a short answer. Your CPF withdrawal limit is SET (determined) at year of purchase. Subsequent refinancing will NOT affect the limit. If it does, I would NOT be in this Business to “harm” people.

It is only reset if a person bought his property before year 2002 (where there was no such limit). Then his/her CPF withdrawal limit will be determined on the year of the First refinancing this person does.

You can easily verify my answers with CPF Board.

If you bought a property in year 2003, the CPF Withdrawal Limit for properties is 150%, this is to be reduced by 6% each year as follows:

Year 2004 144% - if you buy property in year 2004
Year 2005 138%
Year 2006 132%
Year 2007 126%
Year 2008 120%

If you buy a property thereafter, say year 2009, remains at 120%.

Background/Reason for Implementation of CPF Withdrawal Limit:
Singapore government decided to impose a Max Withdrawal Limit for using CPF for purchase of Properties in order to avoid/prevent people from putting too much of their CPF into property and as a result, have not sufficient CPF balance for Retirement.