Most owner-occupiers of Singapore property are now paying lower property tax bills after the Progressive Property Tax Rates, announced in Budget 2013, came into effect at the start of the year.
The Inland Revenue Authority of Singapore (IRAS) said that all owner-occupied HDB flats and three quarters of owner-occupied private homes in Singapore are now paying lower property taxes.
In total, 95 percent of owner-occupied homes have been affected, and taking into account non-owner-occupied homes, 80 percent of all homes are now paying lower property taxes.
The new Progressive Property Tax Rates for owner-occupied residential properties, announced in Budget 2013, took effect on January 1. With the new property tax structure, the Annual Value (AV) exemption threshold for which no tax applies has been raised from S$6,000 to S$8,000. This means that property owners who live in their homes will not have to pay property tax on the first $8,000 of the AVs of their properties.
The new property tax structure also increases the progressivity of the property tax structure by taxing properties with higher AVs more.
After applying the new property tax rates to the AVs for 2014, 95% of owner-occupiers , including all HDB owner-occupiers , will pay lower tax bills next year.
AV and Property Tax for Owner-Occupied HDB Flats
The Inland Revenue Authority of Singapore (IRAS) reviews the AVs of all properties annually. The AV of a property is based on the estimated annual market rent of the property if it was to be let out, and is used as a basis to compute the property tax payable.
The market rents of three- to five-room HDB flats have increased by about three percent since the last AV revision on January 1 2013. The AVs of these three- to five-room HDB flats were revised from January 1 2014. There will be no change to the AVs of the rest of the HDB flats as their market rents have remained largely the same since the last AV revision.
Taking into account their AVs and the new property tax rates, all one- and two-room HDB owner-occupiers will continue to pay no property tax, as the AVs of these flats remain below S$8,000. The rest of HDB owner-occupiers will enjoy property tax savings ranging from $28 to $40 this year.
Property tax information brochures from IRAS are available in four languages from the IRAS website.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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