CNA : Govt to introduce progressive property tax schedule for owner-occupied residences

Govt to introduce progressive property tax schedule for owner-occupied residences
By May Wong, Channel NewsAsia | Posted: 22 February 2010 1715 hrs

SINGAPORE: All HDB flat owners and a majority of private property owners can expect to pay lower taxes through a new progressive property tax system introduced for owner-occupied residential property.

The new system will apply for property tax payable from January 2011.

Finance Minister, Tharman Shanmugaratnam said that this will replace the current scheme of property tax rebates introduced in 1994.

The new property system will see three tiers of tax rates of zero percent, four per cent and six per cent.

The first S$6,000 of Annual Value will be exempted from property tax.

The next tier of S$59,000 will be taxed at four per cent.

And the balance of Annual Value in excess of S$65,000 will be taxed at six per cent.

Mr Tharman said all owner-occupied homes will enjoy tax savings of S$240 as a result of the exemption of the first S$6,000 of Annual Values.

Owners of high-end properties with Annual Values of over S$77,000 will see a small increase in tax payable.

This is because their effective tax rates will be higher than the current four per cent.

This group makes up the top three per cent of private owner-occupied residential properties or the top 0.4 per cent of all owner-occupied homes in Singapore.

Homes with Annual Values of about S$80,000 will see a small increase in tax of less than S$100 a year while a property with an Annual Value of $150,000, will have to fork out another $1,500 in property tax annually.

These are within the top 0.5 per cent level of private owner-occupied homes, which are large properties in the central districts.

Mr Tharman said this new system of property taxes will cost the government about S$230 million a year initially.

The property tax structure of non-owner occupied residential properties and other properties will see no changes.

Mr Tharman said: "Our property tax rates, even for the high-end, will remain lower than in most international cities. That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike. This new progressive system of property taxes for owner-occupied homes will lower taxes for the vast majority of Singaporeans." - CNA/vm