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Property Tax In Singapore – What Are The Rates And How Are They Calculated? 2022 Edition
Article was updated on 19/02/2022 to reflect on the changes in Property Tax
Property Tax In Singapore – What Are The Rates And How Are They Calculated?
Property taxes for non-owner-occupied residential properties - including investment properties - will increase to 12% - 36%.
This compares with the current 10% to 20% tax levied on such properties
At the same time that the property tax rate for owner-occupied homes will increase by up to 32 per cent. This compares with 4% to 16% for such annual value today.
As with most countries, Singapore levies a tax on property owned either by an individual or a legal entity such as a corporation. This is an automatic and mandatory requirement – once you own a property, you will need to pay property tax.
Unlike stamp duties, which are one-time charges imposed at the point of a property purchase, property tax is a yearly affair (as with most other taxes) and it is levied regardless of how you came into possession of the property.
Knowing how property tax is calculated is thus of utmost importance for any current and aspiring property owner.
How is property tax calculated?
The Inland Revenue Authority of Singapore calculates annual property tax by multiplying the Annual Value (AV) of the property with the Property Tax Rates that apply to the individual/entity in question.
The formula is thus: Annual Value (AV) x Property Tax Rate = Property Tax Payable
For example, if the AV of your property is $30,000 and your tax rate is 10 percent, you would pay $30,000 x 10% = $3,000.
What is Annual Value (AV)?
The AV of buildings is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings, and maintenance fees.
It is determined based on:
· rentals of similar or comparable properties in the vicinity (and NOT the actual rental value of the property itself);
· the size of the property;
· location of the property;
· the condition of the property; and
· other relevant physical attributes.
IRAS reviews the AV of properties yearly to reflect the changes in the market rental values of comparable properties, and will send property owners a Valuation Notice informing them of any upward or downward adjustment to the AV and the date when it is to take effect.
Property owners can also check the current AV rates of their property by logging into myTax portal and clicking on “View Property Dashboard”.
You can also check the AV of any property using the Check Annual Value of Property at a fee of S$2.50 per search.
What is Property Tax Rate?
The property tax rate is taxed progressively; the higher the value of the property, the higher the tax rate will be. It also varies depending on whether the property is owner-occupied or not.
The property tax rates for owner-occupied residential properties and non-owner-occupied properties are as shown below:
Owner-occupier tax rates (residential properties)
Owner-occupied residential properties are condominiums, HDB flats or other residential properties where the owner lives in ("occupies") the property. Owner-occupied residential properties enjoy owner-occupier tax rates.
Owner-occupier tax rates
Non-owner-occupier residential tax rates (residential properties)
Non-owner occupied residential properties are condominiums, HDB flats or other residential properties that the owner does not live in ("occupy"). Hence, owner-occupier tax rates do not apply.
The following tax rates apply to non-owner occupied properties except for those in the exclusion list.
There are selected properties that are exceptions to the property tax rates and have flat property tax rates of only 10 percent. They will, however, need to have received planning approval from the government, but no application to IRAS is necessary.
According to IRAS, the list of exceptions is as below:
· Accommodation facilities within any sports and recreational club
· Child care centre, student care centre, or kindergarten
· Welfare home
· Hospital, hospice, or place for rehabilitation, convalescence, nursing care or similar purposes
· Hotel, backpackers' hostel, boarding house or guest house
· Serviced apartment
· Staff quarters that are part of any property exempted from tax under s6(6) of the Property Tax Act
· Student's boarding house or hostel
· Workers' dormitory
· For the existing 10% tax rate to apply, the property must have received planning approval for the above use. No application to IRAS is required.
If one wishes to avoid excessive number crunching, the IRAS progressive tax rate calculator may be used instead to get the property tax rate (albeit only for HDBs).
Property owners to update IRAS on any property changes
It is absolutely crucial to update the authorities on any change of information pertaining to one’s property. Misinformation or failure to inform will result in a fine of up to S$5,000.
Here are some of the events that require updating:
· Sale or Transfer of Property Ownership
· Completion of Demolition of Property
· Rental of Property
· Increase in Rental Charge
· Premium Charge for Letting
· Cessation of Owner-Occupation
Frequently Asked Questions
When and how do homeowners pay for Singapore property tax?
These taxes must be paid before 31 January every year. For ad-hoc property tax notices, it is due one month from the date of notice. Payment can be made via GIRO, at AXS machines or through internet banking.
If I own and occupy more than one residential property, what will be the tax rate?
The owner-occupier tax rates can only be granted to one property owned and occupied by you. For subsequent properties, you will be taxed at non-owner-occupier residential tax rates even if you are occupying it as your second home.
What if my residential property is used as a home office?
The property will be subject to the property tax rates for residential properties as it is used primarily for residential purposes. Property owners are to satisfy the terms and conditions set out by URA or HDB for the home office scheme.
What if my residential property is used as a childcare centre?
For landed houses used as childcare centres, approval for change of use would have been obtained from URA. They will continue to be taxed at 10%.
What rates will apply for shophouses or shopflats with 2 distinct and demarcated uses?
The residential component will be subject to the property tax rates for residential properties while the commercial component will continue to be taxed at 10%.
Do I have to inform IRAS whenever I change the use of my residential property to non-residential?
Yes, you have to notify IRAS in writing within 15 days from the date of the change.
Do I pay the same rate of tax if I am a foreigner?
Foreigners pay, in addition, a 10% surcharge.
What are the late payment charges for property taxes?
There is a late payment penalty charged at 5% of the property tax payable..
Can I apply for a late payment waiver?
Yes, you can appeal online via the myTax Portal if the following conditions are met:
· You must have paid the overdue tax before the due date in the late payment penalty notice
· You must not have been granted a waiver in the past two years, or
· You must have paid your property tax on time for the past two years.
What if I can't pay my property taxes?
If you are facing financial difficulties in paying your property taxes, you can contact the IRAS and put in a request to make your payment via instalments. These cases are however only approved on a case-to-case basis.