Redas has called on the government to review its property tax policies as part of its budget wish-list.
The Real Estate Developers’ Association of Singapore (Redas) has called on the government to review the property tax for vacant private land, and to grant property tax exemption for land slated for, or under development, and also buildings undergoing renovations, reported the Business Times.
Under the Property Tax Act, the annual value of vacant land is assessed at five percent of its capital value, on the assumption that the land is freehold. However, Redas noted that a freehold site’s annual value tends to be 10 percent higher compared to that of a 99-year leasehold site.
“The disparity widens for say a 30-year leasehold industrial property, or a petrol station, or a piece of transitional office land on a 15-year lease, where they are assessed on the basis of a freehold title,” it said in its budget wish-list.
“Operators of such properties will find the current assessment a cost burden to their businesses.”
On the property tax exemption, Redas explained that developers of land slated for, or under development, are yet to receive an income from such properties. As such, a tax exemption will help these developers significantly reduce development costs as well as business risks.
On the other hand, an exemption or concessionary rate for buildings undergoing additions and alterations (A&A) would “encourage owners to retrofit and upgrade their buildings, as well as adopt innovative solutions”.
“This is in line with the government’s efforts to rejuvenate the city and ensure a more sustainable built environment,” noted the association.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
