SINGAPORE - Minister for Home Affairs and Law K. Shanmugam told Parliament on Monday that he is not making money from the difference in rent he is collecting for his family home and the rent he is paying to live in 26 Ridout Road.

Both Mr Shanmugam and Foreign Minister Vivian Balakrishnan delivered ministerial statements in Parliament on the issue of black-and-white bungalows at Nos. 26 and 31 Ridout Road which they are each paying rent for, respectively.

Mr Shanmugam pays a monthly rent of $26,500 for No. 26 Ridout Road, while Dr Balakrishnan pays $20,000 monthly for 31 Ridout Road.

Mr Shanmugam said he was not earning from any difference in the amount between the rent he was paying for the bungalow and the money he was receiving from renting out his family home, a good class bungalow (GCB) in Astrid Hill.

He had decided to review his finances in 2016 as he was approaching his 60s, and realised too much of his savings were tied up in the family home, which he decided later to put up for sale.

Said Mr Shanmugam: “I pay for the rental of 26 Ridout Road, mostly from renting out my family home. But taking into account property tax, because the family home is now non-owner-occupied, and two, income tax on the rental proceeds, there is a net deficit. I top up the deficit.

“I am, in essence, using my previous lawyer’s income to pay for the rental for 26 Ridout Road.

“Based on my current income, I would not have offered to rent 26 Ridout Road. That is based on my personal approach to finances.”

Mr Shanmugam said he had bought his family home using his previous income as a lawyer, before he became a minister.

Having been advised it would be wiser not to have most of one’s savings in one asset, he put his family home up for sale.

He said he did not regret giving up his previous earnings as a senior counsel. “It is a privilege to be in public service. And if I am asked, I will make the same choice again.”

To prepare for the sale, he decided to move out from his family home and live in a rental property.

“I looked at several rental properties, including black-and-white houses. I have long liked black-and-white houses,” he said.

Mr Shanmugam said when he made an offer for 26 Ridout Road in 2018, he did not know the guide rent. He told his agent to assess how much he should offer, based on surrounding properties.

He offered $25,000 a month, which his agent advised would be fair based on rentals for similar properties at the time and taking into account the built-up area and the property’s condition.

The Singapore Land Authority (SLA) came back with a counter-offer of $26,500, which was accepted without further negotiation. Mr Shanmugam said: “I had no idea, when I accepted SLA’s counter-offer, what the guide rent or the minimum rent was. These were decisions internal to SLA that I wasn’t privy to.”

Around the same time, he rented out his family home, while deciding on the sale. Mr Shanmugam said it took him a while to decide to sell, and the Covid-19 pandemic had disrupted this process.

His family home was put on the market in November 2021. 

Mr Shanmugam said he did not want or need the extra land outside the boundary of the Ridout Road bungalow, which is now part of the lease.

He said he offered to maintain that land – which is 150,000 sq ft – at his own cost because if it was not properly maintained, there would be problems for him.

“For example, there are large trees in the property. If any of them fell, it could be serious,” he said, citing the fatal incident at the Botanic Gardens in 2017 when a tree fell on a woman and killed her.

He said there was a greater responsibility for potential health risks as well, including mosquitoes.

Mr Shanmugam said: “But SLA took the position that if I wanted to maintain the surrounding land, the surrounding land had to be part of the lease. I did not want to negotiate, and agreed to this.”

If SLA agrees to take back the extra land – which was more than 60 per cent of the total – he said he would be very happy to give it up, while maintaining it and continuing to pay the agreed rent until the end of the contract.

Mr Shanmugam said26 Ridout Road was old and unoccupied for over four years, and required a fair amount of work.

He said on his count, he spent over $500,000 on improvements, including paying for the car porch and planting several trees.

He said:“The money that I put in, I knew that I would not benefit from it after my lease is over – it would all go back to the State. That is the deal when one rents a black-and-white, and I knew that.”

In renting the property, Mr Shanmugam said that as he had recused himself from the process in the dealings with SLA, there was no actual, potential or perceived conflict of interest.

He added that he told his agent everything had to be done strictly in accordance with the rules.

Mr Shanmugam said the Corrupt Practices Investigation Bureau probe and review have made clear there was no conflict of interest, no breach of rules, and everyone acted properly and honestly.

Hesaid: “Conflict of interest means I make a decision, in a matter where I have an interest. I have an interest in the tenancy, obviously. But I made no decision for SLA on the matter... And I took steps to deal with any perceived or potential conflict of interest.”

Mr Shanmugam apologised that Parliament’s time had been taken up to address these issues, which arose out of a personal matter.

He said: “I know that there are many important things that we have to deal with as a nation. I am, like my colleagues, fully committed to working with Singaporeans to address the issues that matter to them.

“I did not enter public service to maximise my earnings, or try and pay less than I should, to the State.”

Asked by Mr Murali Pillai (Bukit Batok) about comments on whether ministers living in large private properties would be able to relate to the people, Mr Shanmugam said the issue of inequality is “seared” into him as he has lived at both extremes – growing up in rental housing in Bukit Ho Swee, and owning a GCB as a senior counsel.

“You don’t deal with inequality by preventing poor kids from doing well,” he said. “You tackle inequality by providing for social mobility, by helping people to move up.”

He said his empathy did not decrease as his houses got larger, or as he made more money.

Mr Shanmugam noted that he was doing well as a lawyer, and could have said no and carried on with his legal career when asked to serve.

“But I felt that if the Prime Minister wanted me on his team, I had something to contribute, and I could make a bigger contribution to Singapore in that way. So, I did,” he said.

“It is for others to decide if I have measured up as a minister. But in good conscience, I can say I have put my heart and soul into it and carried out my duties to the best of my ability.”