Category Archives: Tax Matters / Property Tax

Govt amends Stamp Duties Act

Posted on 12 Mar 2010 | Comments Off on Govt amends Stamp Duties Act

Parliament has passed changes to the Stamp Duties Act. The amendments will give legislative effect to the seller’s stamp duty, which was re-introduced on February 20 as one of the measures to discourage property speculation.

Those who sell their residential properties and residential lands within one year of purchase February 20 will have to pay a duty of one per cent for the first S$180,000, two per cent for the next S$180,000 and three per cent for the balance.

Speaking at the second reading of the bill on Friday, Finance Minister Tharman Shanmugaratnam said the government first introduced the seller’s stamp duty in 1996 to cool the overheating property market.

It was subsequently suspended in November 1997. Relevant provisions in the Stamp Duties Act were subsequently repealed in 2005.

Another key change – the government will now be able to introduce, vary or remove the seller’s stamp duty, via a Ministerial Order that will be published in the Government Gazette.

The Finance Minister said the process of introducing and repealing provisions in the Stamp Duties Act each time the government wants to introduce, vary or remove the duty is not efficient, especially when it has to respond to changes in the property market cycle in a timely and calibrated manner.

Mr Tharman stressed that the government does not intend to change the seller’s stamp duty liberally.

He said: “Any future change to the seller’s stamp duty will be a carefully considered decision, taking into account all prevailing and projected factors at the time.”

Source : Channel NewsAsia – 12 Mar 2010

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Posted in Cooling Measures, Property Market / Real Estate, Rental / Lease, Tax Matters / Property Tax

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Property tax for most will still be lower even if AV is hiked

Posted on 4 Mar 2010 | Comments Off on Property tax for most will still be lower even if AV is hiked

MR DENIS Distant said that the benefits of the new progressive property tax may not last long if IRAS starts revaluing the Annual Value (AV) of properties (BT, Feb 26, ‘Property tax boon may be short-lived’).

Property tax is a tax levied on the ownership of property, based on the AV of the property. AV reflects the prevailing market rentals of properties. The tax payable will thus increase with an increase in market rentals and vice versa.

IRAS will only adjust the AVs of properties if the market rental data support such revisions. Currently, owner-occupied residential properties are taxed at a flat 4 per cent.

With the progressive property tax schedule, properties with an AV of less than $77,000 will pay less property tax compared to the current flat 4 per cent rate.

This is because the first $6,000 of AV is exempt from property tax. Even with future increases in AV, most owner-occupied properties will still pay lower tax under the new regime so long as their AV does not exceed $77,000. (As a reference, all HDB flats have AVs of not more than $11,000 currently.)

Only about 3 per cent of private owner-occupied residences now have AVs in excess of $77,000. Even then, our property tax rates will remain lower than in most international cities, even for the high-end properties.

Deanna Choo
Director (corporate communications)
IRAS

Source : Business Times – 4 Mar 2010

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