Property Tax - Budget 2013

[Pal]

Owner-occupied / Non-owner-occupied residential properties no longer enjoy a flat rate of 0 to 6% and 10% of their Annual Value (AV) of their property.

With effect from 1st Jan 2014 and a slight increment in 1st Jan 2015, house owners will be taxed based on the tables below:

Owner-occupied residential property tax in 2014 (current rate 0 to 6% of AV)
AV - $8,000 or less - 0% (2015 - 0%)
AV - Next $47,000 - 4% (2015 - 4%)
AV - Next $5,000 - 5% (2015 - 6%)
AV - Next $10,000 - 6% (2015 - 6%)
AV - Next $15,000 - 7% (2015 - 8%)
AV - Next $15,000 - 9% (2015 - 10%)
AV - Next $15,000 - 11% (2015 - 12%) *DOUBLED!!!*
AV - Next $15,000 - 13% (2015 - 14%)
AV - Above $130,000 - 15% (2015 - 16%)

Non-owner-occupied residential property tax in 2014 (current rate 10% of AV)
AV - $30,000 or less - 10% (2015 - 10%)
AV - Next $15,000 - 11% (2015 - 12%)
AV - Next $15,000 - 13% (2015 - 14%)
AV - Next $15,000 - 15% (2015 - 16%)
AV - Next $15,000 - 17% (2015 - 18%)
AV - Above $90,000 - 19% (2015 - 20%) *DOUBLED!!!*

[sundaymorningstaple]

So I end up with a $40 reduction. Not even enough for an Eagles Gathering!

[JR8]

Could someone please explain or link the background to me the meaning of 'Annual Value' ?


p.s. SMS, yeah that about 2.5 beers out in town. Don't splash-out all at once eh

[Pal]

The AV is the estimated annual rent of your property if it were to be rented out, excluding the furniture, furnishings and maintenance fees. It is determined after analysing the rents of similar or comparable properties. The basis of determining the AV is the same whether the property is rented out, owner-occupied or left vacant. If your property is rented out, the AV could be higher or lower than your actual rents as the AV reflects the market rent at the time of review, while your actual rents were committed earlier.

Illustration (A):
Estimated market rent of your flat is $1,000 per month
Annual Value is: $1,000 x 12 = $12,000

In short, AV is a value determined by IRAS. Recent years, it is not uncommon for IRAS to increase a property's AV a few times a year.

More info at:
http://www.iras.gov.sg/irasHome/page04_ektid2110.aspx

If you are a property owner, you can login at IRAS website www.iras.gov.sg to check your property's Annual Value (AV).

[JR8]

Hmmm... interesting, thanks for that.

I wonder why they use a 'derivative of value', rather than just an estimate of the property's value, as a benchmark.

Curious.

What do you think is the idea here. To 'encourage' retirees to down-size into smaller units, to free up larger homes for young SGns (who are resisting having children, apparently)?

[Pal]

Idea is to tax more for those living in private properties and those having investment properties.

Looking at the tables, the new tax easily exceed the current rate and not forgetting they can make upward adjustments of the AV.

[Sergei82]

So what now? Rent is also going up????

[zzm9980]

So what now? Rent is also going up????

Always up la

[x9200]

So what now? Rent is also going up????

Exactly my thought.

[JR8]

Idea is to tax more for those living in private properties and those having investment properties.

Looking at the tables, the new tax easily exceed the current rate and not forgetting they can make upward adjustments of the AV.

In which case it would seem to be a tax on owning or renting property*. I.e. it hits everyone who doesn't still live their parents. And how is this going to contribute towards resolving SG's low child-birth rate I wonder.

Another nail in the coffin to the idea that SG is a low tax country. Maybe it is on direct taxes, but take the 'cost of normal living' [perhaps the '4C's' and it surely isn't].




* You're right Sergei, naturally landlord's costs get passed on to tenants.

[scarbowl]

Rents are market based - not cost based. property taxes have nothing to do with it.

[x9200]

There is a difference of having an impact and being based on something. Nobody said it has a dominating effect. With greedy mentality of so many LL around hard not to expect any impact.

[JR8]

Rents are market based - not cost based. property taxes have nothing to do with it.

And market rents are based on... ?

Value, costs, and market rents (aka 'comparatives').

All a bit chicken and egg.

[stiwi]

So if someone owns a property that he doesn't occupy and which estimated rental value is S$100k / year, he will pay S$20k property tax from 2015, is that correct?

[PNGMK]

Every country I own property in has a form of property/council or land tax.