Homeowners in Singapore will benefit from paying lower property taxes in 2016 compared to this year, revealed the Inland Revenue Authority of Singapore (IRAS).
This is due to the reduced Annual Values (AVs) of HDB and private homes in line with market rentals.
In a statement, IRAS said the tax savings for HDB flats will range from nine to 24 percent, while over 80 percent of private homeowners will enjoy tax savings of between three and 20 percent.
In particular, all 1- and 2-room HDB flat dwellers and 28,200 3-room HDB flat owners will not have to pay any property taxes.
IRAS reviews the AVs of properties annually to ensure that they reflect prevailing market rentals.
Property tax is a tax on property ownership and it is payable on all properties regardless whether the property is rented out, owner-occupied, or left vacant.
According to IRAS, property tax has to be paid by 31 January 2016. A five percent penalty will be imposed on those who fail to pay their tax by that date.
For more information, go to www.iras.gov.sg
The Inland Revenue Authority of Singapore (IRAS) granted full or partial property tax exemptions to 980 buildings in 2013 from 650 buildings in 2000, according to media reports.
Uncollected taxes from these buildings reached around $94 million last year compared to $25 million previously. This translates to about $96,000 for each property versus the $38,400 seen 14 years ago.
These figures imply the steep increase in exempted taxes was caused by higher property values rather than more exemption grants, said PropNex CEO Mohamed Ismail.
“In the last decade or so, property prices have gone up multifold… with values driven up by demand and supply, and the increase in population.”
“We are land scarce, and those who want land have to constantly compete with someone who is willing to pay top dollar, so there will be an increase in land prices, and as land prices go up, so will property values and the taxable amounts,” he added.
Under the law, there are two types of properties eligible for tax exemption namely, places of religious worship and buildings “fulfilling purposes conducive to social development.”
The former includes churches and mosques, while the second category is “limited to public facilities that directly benefit the public at large,” said an IRAS representative. But due to confidentiality, the agency cannot name these tax-exempt buildings.