POSTED: 26 Nov 2013 19:04 | UPDATED: 26 Nov 2013 20:55 | CNA

SINGAPORE

2014 will usher in lower property tax for 95 per cent of the 975,200 owner-occupied homes in Singapore.

Making the announcement on Tuesday afternoon, the Inland Revenue Authority of Singapore (IRAS) said the reduction is a result of the progressive property tax rates announced in Budget 2013.

Taking into account homes that are not occupied by their owners, that means lower taxes will be collected for 80 per cent of all residential properties in Singapore.

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 owners who live in their properties will not have to pay property tax on the first S$8,000 instead of the first S$6,000 of the AVs of their properties.

The new property tax structure also taxes properties with higher AVs more.

IRAS said it 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 were to be let out, and is used as a basis to compute the property tax payable.

IRAS said the market rents of three-room to five-room HDB flats have increased by about 3 per cent since the last AV revision on January 1, 2013.

The AVs of these flats will be revised from January 1, 2014.

There will be no change to the AVs of other HDB flats as their market rents have remained largely the same since the last AV revision.

Despite the adjustments in the AVs of three-room, four-room and five-room HDB flats, they will still be paying less tax next year compared to this year.

The tax saving for three-room flats is S$30.40, and S$28 for both four-room and five-room flats.

The saving for executive flats is S$40.

The market rents, and hence AVs, of 70 per cent of private residential properties over the past year have remained largely the same since the last AV revision, with the remaining 30 per cent seeing an increase in AV.

Taking into account their AVs and the new property tax structure, less tax will be levied on 74 per cent of private owner-occupied properties after the new tax rates are applied on their 2014 AVs.

Under the new property tax structure, the property tax rates for non-owner-occupied residential properties with AV above S$30,000 will be increased from January 1, 2014, based on a progressive schedule.

With this change, higher property taxes will be levied on 74 per cent of non-owner-occupied private residential properties after the new tax rates on their 2014 AVs are applied.

IRAS said property owners will receive their property tax notices and bills by the end of this year, and reminded them to pay their property tax by January 31, 2014.

– CNA/gn

http://www.channelnewsasia.com/news/singapore/lower-property-tax-for-95/900592.html