Singapore Property Tax Guide: What Are The Rates And How to Calculate Them

what is property tax singapore and how to calculate it

When you own a property in Singapore, you are automatically required to pay property taxes. These taxes differ from your income tax, rental tax and stamp duty. Income tax are taxes on your income, rental taxes are only applicable on selected property owners, and stamp duty are charges imposed when you purchase a property. Property tax, also known as wealth tax, are taxes levied on you for owning a property.

Most property owners are however unaware of how these taxes are calculated as the property tax levied changes on a yearly basis. Here's a guide to the property tax rates, calculations, and more. 

 

Property Tax in Singapore: An Overview

What is property tax?

They are taxes levied on you for owning a property.

What is property tax rate?

The Property Tax Rate is calculated based on progressive tax rates, and whether the unit is owner occupied or non-owner occupied. 

How to calculate property tax?

Annual Value (AV) x Property Tax Rate = Property Tax Payable (or you may consider using the IRAS progressive tax rate calculator)

What are the late payment charges for property tax?

There is a 5% penalty charged for late payments.

As mentioned above, property taxes are chargeable to all property owners as long as they own a property.

How property tax is calculated may differ depending on: 

  1. The property’s Annual Value (AV) 
  2. The property tax rates based on the occupancy status of your property.

 

How to calculate property tax in Singapore 

The property tax payable is calculated with this formula:

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%, you would pay $30,000 x 10% = $3,000.

 

What is the Annual Value (AV)?

Your property's AV is determined by the Inland Revenue Authority of Singapore (IRAS) on a yearly basis.

The Annual Value rates fluctuate based on the market rental value of surrounding properties in the area. Hence when the rental value is up the AV rates will go up, and similarly when the rental value heads south, so will the AV rates.

The Annual Value is calculated based on the rental value minus reasonable furniture rental and maintenance fees. Let’s take Mr. Chong’s rental unit for example:

Monthly rental income: $2,500
Monthly furniture rental: $900
Monthly maintenance: $500
$2,500 - ($900 + $500) = $1,100

So the AV for his unit will be $1,100 x 12 months = $13,200

To make it easier for property tenants, the IRAS will send them a notification every time there is a change to their AV rates. However, property owners can also check the current AV rates at anytime from the Inland Revenue Authority of Singapore (IRAS) at anytime by logging into their website.

On a side note, if you are purchasing a property, you can check the current and past 5 years AV value of the property from IRAS at $2.50 a search.

Read more about AV here: Property Annual Value: What Is It And How Do You Check Yours?

 

Property Tax Rate: What is it?

The Property Tax Rate is calculated based on progressive tax rates, and whether the the unit is owner occupied or non-owner occupied. The progressive tax rates indicates that the higher your property value is, the higher your tax rate will be. 

 

Property tax calculation

Owner-occupier property tax rates

If you are an owner occupier, the below tax rates apply to you. 

First $8,000

0%

$0

Next $47,000

4%

$1,880

 

Next $15,000

6%

$900

 

Next $15,000

8%

$1,200

 

Next $15,000

10%

$1,500

 

Next $15,000

12%

$1,800

 

Next $15,000

14%

$2,100

 

Source: IRAS

As you can see, your property's annual value (and the occupancy status) determine your property tax rate. For example, if your home has an AV of $36,000, you will be charged 0% on the first $8,000, and 4% on the following $28,000. That sums up to $1,120. 

Non-owner-occupier property tax rates

If you don't live in the said property and are renting the entire place out, here are the rates for you:

First $30,000

10%

$3,000

Next $15,000

12%

$1,880

 

Next $15,000

14%

$2,100

 

Next $15,000

16%

$2,400

 

Next $15,000

18%

$2,700

 

Source: IRAS

Using the same example of $36,000 AV, for non-owner-occupier properties, you will be charged 10% on the first $30,000, and 12% on the next $6,000. That makes it $3,720. 

 

Singapore Property Tax Calculator

IRAS progressive tax rate calculator

If all these numbers are confusing you, an easier way to get your property tax rate calculations would be to use the IRAS progressive tax rate calculator.

 

Property tax reliefs 2020: for residential properties (HDB flats, condos, landed property)

As you may have heard, the recent Resilience Budget 2020 to help stimulate the economy during the COVID-19 crisis had many property tax reliefs. However, they are not for residential properties. This means you must continue to pay property tax for your HDB flat, condo, and landed homes. 

As seen above, however, as long as you are an occupant in the property, you will enjoy lower owner-occupier property tax rates, which is considered an ongoing relief measure. 

 

Exclusion List to Progressive Property Tax Rates

There are selected properties that are exceptions to the property tax rates, and have flat property tax rates of only 10%. 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:

  1. Accommodation facilities within any sports and recreational club
  2. Chalet
  3. Child care centre, student care centre, or kindergarten
  4. Welfare home
  5. Hospital, hospice, or place for rehabilitation, convalescence, nursing care or similar purposes
  6. Hotel, backpackers' hostel, boarding house or guest house
  7. Serviced apartment
  8. Staff quarters that are part of any property exempted from tax under s6(6) of the Property Tax Act
  9. Student's boarding house or hostel
  10. 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.

 

More FAQs on property tax in Singapore

When and how do homeowners pay for Singapore property tax? 

These taxes must be paid before 31st January on a yearly basis. For ad-hoc property tax notices, it is due one month from the date of notice. You can pay for it via GIRO, at AXS machines or through internet banking.

What are the late payment charges for property taxes?

There is a 5% penalty charged for late payments.

For example: If the date of the Property Tax bill is 15 Dec 2019 (for year 2020 Property Tax) and the tax payable is $1,000, 5% penalty of $50 (i.e. 5% x $1,000) will be imposed if the tax was still not paid before 31 Jan 2020.

There are however exceptions to the penalty rule. If your property underwent and ad hoc reassessment or a new assessment, the property owner will be given an additional 1 month to pay their property tax.

In the event that the property owner still does not make good on their payment, the government has the right to obtain the monies from the property owner from anywhere they can - whether it is their personal bank accounts or their payroll. Before this happens, if the property owner is facing financial difficulties, they can contact the IRAS and arrange to pay via instalments. These requests are however only approved on a case-to-case basis.

Can you 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? What happens then?

Property owners cannot dispute paying their property taxes; however, they can dispute the AV value if the market rental value in the area is actually lower. Substantial supporting documents need to be provided to show that the market rental value has declined, and then the property owner must make an appeal to the Ministry of Finance of Singapore (MOF). They will have 30 days of receiving their valuation notice to make their dispute.

On the other hand, 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.

Budgeting for your property tax is essential as soon as you purchase a property. To avoid getting stuck on the 31st of January every year, create a budget for it as soon as you own a property.

 

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