Vacancy refund for property tax removed to ensure consistency23 Dec 2013
Mr Ang Miah Boon asked why the rationale for the removal of the vacancy refund for property tax was not shared with the public ("Questions remain on property tax"; Dec 14).
As property tax is a tax on wealth in the form of property ownership, it should be levied irrespective of whether the property is vacant or occupied. The vacancy refund scheme was thus removed, consistent with this intent of property tax.
The change coincides with the introduction of a new and more progressive property tax schedule on residential properties in 2014. The rationale for the removal was explained in the Budget statement in February this year, and when the amendment Bill was tabled in Parliament in October.
Mr Ang also asked why property tax is the only tax on wealth in Singapore. We eliminated estate duties in 2008 as its greatest impact was not on the wealthiest, who tended to manage their financial assets globally.
In doing so, the Government explained that property tax would be retained as a wealth tax. Property taxes are more efficient, and can be structured more equitably, with the owners of more valuable properties paying more.
We also do not levy wealth taxes on any other forms of wealth such as cash or equity for practical reasons - monies can easily be shifted to similar assets in other financial centres, and such taxes will impact Singapore's competitiveness as a financial centre.
Lim Bee Khim (Ms)
Director, Corporate Communications
Ministry of Finance