Concessionary property tax rates automatically granted to EC, HDB, DBSS flat owners

5 Nov 2020

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Only owner-occupied residential properties enjoy concessionary property tax rates. Properties which are rented out or vacant do not enjoy this concession, said Deputy Prime Minister Heng Swee Keat.

The Inland Revenue Authority of Singapore (IRAS) automatically grants all buyers of HDB and DBSS flats as well as of new executive condominium (EC) units with concessionary property tax rates, revealed Deputy Prime Minister, and Minister for Finance, Heng Swee Keat in Parliament on Wednesday (4 November).

Heng noted that residential properties are subject to property tax, with higher-value homes taxed at higher rates.

“Owner-occupied residential properties enjoy concessionary property tax rates. Properties which are rented out or vacant do not enjoy this concession,” he said.

And since property owners are free to acquire one or more properties, and choose to live in any or none of the properties they own – the owners need to inform IRAS which property they are occupying to qualify for the concession, explained Heng.

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For taxpayers’ convenience, IRAS automatically grants the concessionary rates to HDB, DBSS and new EC unit buyers as these forms of housing are intended for owner occupation, said Heng.

He made the statement in response to MP Gerald Giam Yean Song’s query on why it is necessary for a property owner to declare that he is the owner occupying the property to enjoy owner-occupied tax rates instead of these rates being applied by default.

Heng added that IRAS had also been automatically extending the concession to buyers of private property or resale EC units purchased on or after 1 January 2011, “if he is a Singapore citizen or Permanent Resident, and neither he nor his spouse is enjoying the concession on any other residential property”.

Residential property owners who have been automatically granted the concession are required to inform IRAS in case the house is not being owner-occupied so that the concession may be withdrawn. 

Suggested read: Singapore Property Rental: A Guide for Tenants and Landlords

“For residential properties bought before 2011, there may be cases which could be eligible for the concession, but the owners did not apply for it. IRAS sent letters during a 2012 exercise to invite them to apply for the concession if they were residing in their property,” added Heng. 

On how many property owners have been taxed with non-owner-occupier property tax rates when they were in fact residing in their own homes, the minister shared that they “do not have statistics on how many property owners live in their own properties but do not enjoy concessionary tax rates”.

“On whether a property owner can claim the concession and seek a refund of the excess property tax paid after he has sold the property, IRAS will need to look at the specific circumstances,” said Heng.

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