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With the upcoming improve in property taxes, 4 in 10 Singaporeans mentioned they are going to be affected by the upper taxes. However is that basically true? I made a decision to calculate the numbers to seek out out.
Property tax is at the moment Singapore’s principal technique of taxing wealth, so it comes as no shock when Finance Minister Lawrence Wong introduced within the newest Finances 2022 that the federal government can be elevating these taxes, which haven’t been raised since 2015. At first look, the headline charge of 6% – 32% (for owner-occupied) and 12% – 36% (for non-owner-occupied) could sound like a steep improve, however what number of Singaporeans will truly be affected by the change?
Because it seems, not a lot.
Other than the GST hike, the second most urgent concern was that of the upper property tax charges, with 4 in 10 Singaporeans saying that it could have a “massive influence” on them. However right here’s some information:
Nearly all of properties in Singapore have an AV of lower than $30,000.
In case you keep in a HDB flat, you’ll not be affected as a result of even the most important flats have an AV of beneath $10,000+. And though IRAS has announced that they will be revising the Annual Values (AVs) of HDB flats upwards by 4% to 6% from this year onwards (to keep in line with the increase in market rentals), this can nonetheless not push the AV to above $12,000:
| Sort of HDB | Median Annual Worth (AV) | 4% AV improve | 6% AV improve |
| 1 or 2 Room | $5,100 | $5,304 | $5,406 |
| 3 Room | $7,680 | $7,987 | $8,141 |
| 4 Room | $9,600 | $9,984 | $10,176 |
| 5 Room | $10,380 | $10,795 | $11,003 |
| Govt & Others | $10,680 | $11,107 | $11,321 |
In case you keep in a personal residence as a substitute, right here’s how the annual worth stacks up:
| Sort of Property | Median Annual Worth |
| Non-landed (contains Govt Condominiums) | $22,200 |
| Landed | $34,800 |
Because of this the overwhelming majority of properties – together with HDB flats, condos and landed property in suburban areas and most mass-market condos – will NOT be affected by the rise in property tax charges as your AV is prone to be beneath $30,000.
Examples of properties with AV above $30,000
Most properties that go previous $30,000 AV are usually landed properties, industrial and business properties:
| Sort of Property | Median Annual Worth (AV) |
| Condos / Landed in central Singapore | $40,000 |
| Industrial | $36,000 |
| Industrial | $61,500 |
So in case you personal a personal residential property in a central space, then there’s an opportunity that the AV can be increased than $30,000. To seek out out if that applies to you, merely log into your IRAS tax portal and click on on the View Property Portfolio service.
How rather more property taxes will I’ve to pay?
Proprietor-occupied residential properties can be taxed at 6% – 32% on a progressive tier (check the full breakdown of the rates here on IRAS website), which works out to be:
| Sort of Property | Annual Worth* | Present Property Tax | Revised Property Tax | Improve |
| HDB flat | $10,000 | $80 | $80 | – |
| Suburban Condominium / Landed | $30,000 | $880 | $880 | – |
| Central Condos / Landed | $40,000 | $1,280 | $1,480 | $200 ($17/month) |
| Giant landed property | $70,000 | $2,780 | $5,080 | $2,300 ($192/month) |
| Very massive landed property | $150,000 | $12,580 | $27,980 | $15,400 ($1,283/month) |
Thus, in case you stay in a HDB flat or a mass-market apartment, you might be unlikely to be affected by these increased tax charges. However in case you at the moment personal a residential property which you’re not staying in, you’ll be taxed at considerably increased charges of 12% – 36%.
For non-owner-occupied residential properties, that is what the brand new tax implications could appear to be:
| Sort of Property | Annual Worth* | Present Property Tax | Revised Property Tax | Improve |
| HDB flat | $10,000 | $1,000 | $1,200 | $200 ($17/month) |
| Suburban Condominium / Landed | $30,000 | $880 | $880 | $600 ($50/month) |
| Central Condos / Landed | $40,000 | $1,280 | $1,480 | $1,400 ($117/month) |
| Giant landed property | $70,000 | $2,780 | $5,080 | $5,900 ($492/month) |
| Very massive landed property | $150,000 | $12,580 | $27,980 | $19,200 ($1,600/month) |
You probably have an present second property which you’re not dwelling in, be ready to pay wherever between $17 – $117 extra in property taxes a month as soon as the brand new charges kick in.
I’m planning to purchase an funding property. Will the tax charges have an effect on me?
In brief, sure as a result of funding properties are being taxed increased by the federal government as a part of the most recent transfer. Nonetheless, it nonetheless will depend on the precise AV of the unit you’re shopping for – in case you’re buying a mass-market apartment or a suburban non-public residential property, the rise of $50 a month needs to be minimal in comparison with your different property bills.
Nonetheless, it pays to be extra prudent in case you’re going for prime district condos or landed properties, as you’ll now be saddled with not solely increased mortgage repayments but in addition increased property taxes each month. Remember to issue these into your price range calculations.
In fact, I presume that landlords will seemingly attempt to go a few of the improve in property taxes and mortgage rates of interest to tenants, which can lead to increased rental charges from right here.
Not sure whether or not your funds are enough on your property buy? My husband has agreed to assist advise my readers in his skilled capability, so in case you want some steerage and lack a trusted advisor, you possibly can at all times DM me on Instagram here and I’ll hyperlink you up.
Necessary Disclaimer: The data offered right here is for reference and academic functions solely. To get an correct evaluation of your property tax payable and annual worth of your own home, please login together with your SingPass to IRAS myTax portal and retrieve your info. I don't signify nor communicate on behalf of any authorities businesses or statutory board, and undoubtedly not for HDB or IRAS.
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