ST : Why raise property tax

Nov 22, 2009
Why raise property tax
By Sue-Ann Chia SENIOR POLITICAL CORRESPONDENT



Mr Lui pointed out that the Government is taking steps to soften the impact of the tax rise early next year. -- ST PHOTO: CHEW SENG KIM

THE property tax of HDB flats is being raised next year partly to avoid having to introduce a bigger increase later should home prices continue to rise, said Acting Minister for Information, Communications and the Arts Lui Tuck Yew.

He gave the reason on Sunday when he was asked, at a dialogue with Aljunied-Hougang residents, whether the Government could have delayed it since the recession has just started to ease.

Noting that the adjustment had been delayed once, in 2008, Rear-Admiral (NS) Lui said: 'The problem is the longer you defer it, the larger the increase will be in the property taxes if HDB prices continues to go up.'

He also pointed out that the Government is taking steps to soften the impact of the tax rise early next year.

It is giving HDB homeowners a one-off rebate, set at 50 per cent of the property tax payable and capped at $120. This means low-income families with homes whose property tax is $50 and less will not have to pay any such tax next year.

Singapore homeowners pay a tax set at 10 per cent of the property's value, which has been rising as HDB flat prices continue to climb despite the downturn.