What sort of property tax rates do I have to pay as a property owner and investor?

 

What is Property Tax?

Property tax is a tax on property ownership by the Inland Revenue Authority of Singapore (IRAS). It is applicable to all properties whether

 - owner-occupied

 - rented out

 - left vacant.

It is different from Income Tax where you pay taxes on income from renting out the property. If you lease out your property, you will pay both property tax and income tax.

 

How is property tax calculated?

Annual Value x Tax Rate = Property Tax

An Annual Value (AV) is the estimated annual rent of your property.

The AV is determined by the market monthly rent of your unit type after deducting for furniture, furnishing and maintenance fees, and multiplying it by 12. This market rate is based on transactions of similar or comparable properties within his development.

For eg, a property fetching an average of $4800 may have an AV of $3000 x 12 = $36,000 after allowances for furniture, furnishings or maintenance fee.

You can check your AV by logging into the IRAS website with your Singpass, select “Property” and “View Property Portfolio”.

 

What are the tax rates?

If you are living in the property, the Owner-Occupied Tax Rates apply to you.

 

Owner-Occupied Tax Rates

Annual Value (AV)

Progressive Tax Rates

Property Tax Payable

First $8,000

Next $47,000

0%

4%

$0

$1,880

First $55,000

Next $15,000

-

6%

$1,880

$900

First $70,000

Next $15,000

-

8%

$2,780

$1,200

First $85,000

Next $15,000

-

10%

$3,980

$1,500

First $100,000

Next $15,000

-

12%

$5.480

$1,800

First $115,000

Next $15,000

-

14%

$7,280

$2,100

First $130,000

Above $130,000

-

16%

 $9,380

 

 

If you are renting out the property, or if the property is vacant, the Non-Owner-Occupied Tax Rates apply to you.

 

NON-Owner-Occupied Tax Rates

Annual Value (AV)

Progressive Tax Rates

 Property Tax Payable

First $30,000

Next $15,000

10%

12%

$3,000

$1,800

First $45,000

Next $15,000

-

14%

$4,800

$2,100

First $60,000

Next $15,000

-

16%

$6,900

$2,400

First $75,000

Next $15,000

-

18%

$9,300

$2,700

First $90,000

Above $90,000

-

20%

$12,000

 

 

Non-residential properties (commercial and industrial) incur a flat rate of 10%.

 

Case Study:

You stay in a property with an AV of $36,000 after deducting for reasonable allowances:

For the first $8,000, you pay $0

For the next $28,000, you incur 4% rate = $1,120

Total payable = $1,120

 

Supposing you rent out the same property:

For the first $30,000, you incur 10% rate = $3,000

For the next $6,000, you incur 12% rate = $720

Total payable = $3,720

 

When do I pay property tax?

The due date is 31 Jan yearly. You will receive your tax bill at the end of each year.

 

Can I contest the Annual Value?

If you do not agree with the AV of your property, you can challenge, you can file your appeal HERE.

Be ready to support your appeal with supporting documents regarding the market rental rates in your development. There is a fee of $50 for Owner-Occupied properties and $200 for Non-Owner-Occupied properties.

 

What if I am unable to pay?

If you have financial difficulties, you can write in to IRAS to appeal. You may be allowed to pay in installments on a case-by-case basis.

 

Disclaimer : This article serves as a guide only, and you should not make your decision based solely on this article. You are advised to seek professional advice from a licensed real estate salesperson to assist you in planning your real estate portfolio.