ST : Make tax system simpler for rented-out property

18 JAN 2011,
Make tax system simpler for rented-out property

THE Government has introduced progressive tax rates on property tax for owner-occupied properties from this year. Properties that are rented out will continue to be taxed at 10 per cent of the annual value.

The Government should consider extending the progressive tax rate system for rented out properties and remove property income from the income tax returns. There is no need for the same income to be taxed twice - as property tax and income tax - especially as the taxes are based on the market-adjusted annual value of the property.

The progressive tax rate on rented properties can be made to mirror the revenue that is currently collected by the Government from the income tax levied on the rental income.

As an owner of property that has been rented out, I now find it a hassle to compute the net property income to submit in my income tax returns. I must identify the rental income and expenses that are expended on the property, such as property tax, insurance, repairs, maintenance charges, agency fee and other items.

It is unclear if the owner is allowed to deduct the proportion of the rental that is set aside for furnishing of the property.

The complexity can be removed when the income tax portion is integrated into the proposed progressive rate on rented out properties. It will also save a lot of work for the Inland Revenue Authority of Singapore in policing the reporting of rental income.

Tan Kin Lian