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Property Tax – When is it due, how it is calculated and how to pay?

Property Tax is a tax on property ownership and applies whether the property is rented out, owner-occupied or vacant

The privilege of owning property comes with the need to pay tax on that property annually. Property Tax is a tax on property ownership and applies whether the property is rented out, owner-occupied or vacant. Even as we enjoy the perks of the property or properties we own, it is imperative that we remember to fulfil our tax obligations to the Inland Revenue Authority of Singapore (IRAS).

In Singapore, we have a progressive property taxation system. Broadly speaking, there are two different tax rates that will apply on the residential property depending on whether the residential property is owner-occupied (i.e. you own the residential property and you live in it) or whether the residential property is non-owner occupied (i.e. you own the residential property but you do not live in it).

All other properties are taxed at 10% of the Annual Value.

property taxWHEN IS PROPERTY TAX DUE

Your next Property Tax bill is due on 31 Jan 2021.

IRAS will send out customised SMS reminders to those who have not paid and will also send out final reminders in the last week of January 2021.  The SMS reminders will set out your property address, tax amount payable plus your unique property tax reference number. While we are lucky in Singapore with IRAS taking a proactive step in reminding us to pay our tax dues, we should still keep on top of such payments without relying on such reminders.  It is imperative to note that if your property tax payment is not received before the due date, a 5% late payment penalty will be imposed on the unpaid tax.

However, you do have the right to appeal or ask for a waiver of the late fee penalties which may be considered when you pay your overdue tax in full, or if you have been good at paying for the past two years. Note that this is at the sole discretion of IRAS.

If you persist in not paying, the billing institution may request for the amount to be deducted from your bank account directly via GIRO

HOW TO PAY

IRAS makes it really convenient to pay your property tax and there are many options to choose from. You can pay via AXS, Internet Banking, SAM or via NETs at any post office. All you need is your property tax reference number. You can also pay by GIRO which will let you pay monthly in interest -free monthly instalments if you so choose.

HOW PROPERTY TAX IS CALCULATED

In a nutshell, the property tax payable = Annual Value of the property in question multiplied by the applicable tax rate. For case studies to illustrate this formula, you should read more about Property Taxes in Singapore.

What is Annual Value?

In short, the Annual Value of a given property is the estimated gross annual rent payable on the property if it were to be rented out, minus the cost of furniture, furnishings and maintenance fees. The amount is based on the estimated market rental amounts of similar or comparable properties and not on the actual rental income received. The way the Annual Value is determined is the same for all properties whether its owner or non-owner occupied.

More information on Annual Value can be found on the IRAS webpage on the subject matter.

What is the applicable tax rate?

Owner-occupier Residential Tax Rates
Annual Value ($)  Effective 1 Jan 2015 Property Tax Payable
First $8,000 0%  $0
 Next $47,000  4%  $1,880
First $55,000  – $1,880
Next $15,000 6% $   900
 First $70,000  – $2,780
Next $15,000 8% $1,200
First $85,000  – $3,980
 Next $15,000 10% $1,500
First $100,000  – $5,480
Next $15,000 12%  $1,800
 First $115,000  – $7,280
 Next $15,000  14%  $2,100
 First $130,000  –  

$9,380

 Above $130,000  16%

 

Non-owner-occupier  Residential Tax Rates
Annual Value ($) Effective 1 Jan 2015 Property Tax Payable
First $30,000 10% $3000
Next $15,000  12% $1,800
First $45,000 $4,800
Next $15,000 14% $ 2100
First $60,000 $6,900
Next $15,000 16% $2,400
First $75,000 $9,300
Next $15,000 18% $2,700
First $90,000  

$12,000

Above $90,000 20%

Source: IRAS 

WHAT HAPPENS IF YOU DISAGREE WITH THE IRAS’S ASSESSMENT OF THE ANNUAL VALUE OF YOUR PROPERTY?

IRAS determines the Annual Value of your property.

IRAS reviews the Annual Value of properties yearly to reflect the changes in the market rental values of comparable properties. The Annual Value will be amended if the latest market rent data no longer support your existing Annual Value. If your property undergoes physical changes that could materially affect its rental value, IRAS will also revise such Annual Value at the date of the change.

You can check the Annual Value of your property using IRAS’s e-Service “View Property Dashboard”. All Annual Values shown are as at the current date.

You can object to the Annual Value  and/or its effective date within 30 days from the date of the Valuation Notice. If you do not receive the Valuation Notice, you can also object to the AV at any time in the year if you can show that the market values have dropped to below the AV. You cannot, however, object to the tax rates.

If your objection is declined, you can appeal to the Valuation Review Board (VRB) within 30 days of the notice on the outcome of your objection. You need to pay the following fees to VRB:

  • $50 for a residential property taxed at owner-occupier tax rates; or
  • $200 for any other property.

In your appeal, you need to state the grounds of your appeal and indicate whether you are represented by any agent.

PROPERTY TAX EXEMPTIONS

In Singapore, there are a few types of properties that are eligible for a tax exemption. These include (but are not limited to) properties which constitute places of worship, are used for charitable purposes, are utilised for education or schooling purposes or those which promote social development in the country.

*This does not constitute legal advice. Please see independent professional advice

Written by Grace HUI

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