Property Taxes and Annual Value of Properties

Parliamentary Question by Mr Pritam Singh:

To ask the Deputy Prime Minister and Minister for Finance (a) how much additional property taxes does the Government expect to collect in 2024 following the decision to increase property taxes as announced by the Ministry on 30 November 2023; and (b) how much property tax does the Government expect to collect in 2025 after accounting for the one-off rebate in 2024. 

Parliamentary Question by Mr Lim Biow Chuan:

To ask the Deputy Prime Minister and Minister for Finance (a) whether IRAS will review the methods used to determine the annual value of properties for which there is a dearth of comparable rental evidence; (b) how many properties in Singapore have had their annual values increased by more than 20% from the preceding year; and (c) whether the property taxes on owner-occupiers of such properties can be mitigated since they are not deriving any rental revenue.

Parliamentary Question by Ms Joan Pereira:

To ask the Deputy Prime Minister and Minister for Finance whether the Ministry will consider providing continued rebates in property taxes for owner-occupied private properties for the next five years beyond the once-off rebates. 

Parliamentary Question by Mr Yip Hon Weng:

To ask the Deputy Prime Minister and Minister for Finance (a) given the recent cooling of the rental market, whether a corresponding decrease in the annual value (AV) of properties and consequently property taxes, can be expected; (b) how does IRAS assess the physical condition of houses for fair AV and taxes, especially for asset-rich but cash-poor owners who have not renovated their house in years; and (c) whether inspections are conducted to determine the condition of houses for AV assessment and, if so, what is the frequency.

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Parliamentary Reply by Second Minister for Finance, Mr Chee Hong Tat:

Mr Speaker, my response will cover Question No 6 on today’s Order Paper, as well as related questions by Mr Lim Biow Chuan and Ms Joan Pereira in yesterday’s Sitting, and Mr Yip Hon Weng for a subsequent Sitting. May I have your permission to proceed, Sir?

Thank you, Sir. Mr Speaker, property Tax (PT) is a tax on property ownership, and it is our principal means of taxing wealth. PT payable is based on the Annual Value (AV) of the property, which is the estimated annual rent of the property. We have seen from past data that AV rises and falls based on market trends.

Mr Lim Biow Chuan and Mr Yip Hon Weng asked how property AVs are assessed. The Inland Revenue Authority of Singapore (IRAS) takes reference from rental transactions for similar properties over the course of the year. IRAS also takes into account the property’s attributes such as its location, age, land and floor area, improvement works last done and whether there are specific features like swimming pools.

For 2024, most owner-occupied residential properties saw their AV increase by more than 20% due to the increase in market rentals from 2022 to 2023. In addition, as announced in Budget 2022 as a form of wealth tax, PT rates were increased in two steps in 2023 and 2024, for high-value owner-occupied private properties with AVs above $30,000, as well as all non-owner-occupied properties. These moves were intended to enhance the progressivity of our wealth taxes, which I recall Members from both sides of the House had supported during the 2022 Budget debate.

Mr Lim also asked if the property taxes on owner-occupied properties can be mitigated. The Government has indeed done so. One, property tax rates on owner-occupied properties are lower than non-owner-occupied properties. Two, to cushion the impact of the increase on owner-occupiers, the Government has provided a PT rebate of up to 100%, capped at $1,000.

With the rebate, owner-occupiers of HDB 1- and 2-room flats continue to pay no PT; for owner-occupiers of other HDB flat types, the average PT increase is less than $3 per month; and for half of private property owner-occupiers, their increase in PT was less than $15 per month.

On Mr Pritam Singh's query on PT collections, after accounting for the 2024 PT rebate, the 2024 residential PT revenue is expected to be around $600 million higher than the 2023 PT collections. Around two-thirds of the increase is contributed by non-owner-occupied properties.

Sir, the Government closely monitors the rental market and reviews the AVs every year. On Ms Joan Pereira's question about future PT rebates, we are prepared to consider if such rebates are needed when we review AVs and PT payable.