Most owner-occupied homes will pay lower property tax bills next year, as a result of the Progressive Property Tax Rates announced in Budget 2013. All owner-occupied HDB flats and three quarters of owner-occupied private homes will pay lower property tax in 2014. In total, 95% ^[1]   of owner-occupied homes will see lower property tax bills.

Taking into account non-owner-occupied homes as well, 80% ^[2] of all homes will pay lower property tax in 2014.

Lower Property Tax Bills for 95% of all Owner-Occupied Homes in 2014

The new Progressive Property Tax Rates for owner-occupied residential properties, announced in Budget 2013, will take effect from 1 Jan 2014. With the new property tax structure, the Annual Value (AV) exemption threshold for which no tax applies has been raised from $6,000 to $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.  Please refer to  Annex 1. 

After applying the new property tax rates to the AVs for 2014, 95% of owner-occupiers  3  , including all HDB owner-occupiers^[4] , 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 3 per cent since the last AV revision on 1 Jan 2013.  The AVs of these three- to five-room HDB flats will be revised from 1 Jan 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 $8,000. The rest of HDB owner-occupiers will enjoy property tax savings ranging from $28 to $40 in 2014.

The property tax payable for HDB owner-occupied flats in 2014 are as follows:

 AV and Property Tax for Owner-Occupied Private Residential Property

The market rents and hence AVs of 70% ^[6]  of private residential properties over the past year have remained largely the same since the last AV revision, with the remaining 30% seeing an increase in AV. Taking into account their AVs and the new property tax structure, 74% ^[7]  of private owner-occupiers will also pay less tax after applying the new tax rates on their 2014 AVs.

Increase in Property Tax for Non-Owner-Occupied Residential Properties in 2014

Under the new property tax structure, the property tax rates for non-owner-occupied residential properties with AV above $30,000 will be increased from 1 Jan 2014, based on a progressive schedule. Please refer to  Annex 2.

With this change, 74% ^[8]  of non-owner-occupied private residential properties and HDB flats will have higher property taxes after applying the new tax rates on their 2014 AVs.

Property Tax Payment is due on 31 Jan 2014

Property owners will receive their property tax notices and bills by the end of this year, and are reminded to pay their property tax by 31 Jan 2014. IRAS encourages property owners to join GIRO to enjoy the convenience of a one-time deduction or up to 12 monthly interest-free instalments. Taxpayers who have bank accounts at DBS/POSB or OCBC can apply for GIRO via Internet Banking and receive instant approval.

A 5% penalty will be imposed on owners who fail to pay or have not arranged to make payment by 31 Jan 2014. Owners facing financial difficulties are advised to contact IRAS before the due date to discuss a suitable payment plan.

More information can be found in   www.iras.gov.sg , and the e-Tax Guides published on the property tax rate changes.  Taxpayers with enquiries may also call 1800-356 8300 or e-mail   [email protected] . 

Inland Revenue Authority of Singapore