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Unmasking the five myths of property tax

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By Property Soul
On December 5, the Inland Revenue Authority of Singapore (IRAS) announced the reduction of property tax for HDB flats in 2015. Three days later, there was an article “Property Tax cut for one in four private home owners” in The Straits Times. A week after their announcement, a representative from IRAS further elaborated how annual values are calculated in The Straits Times Forum (“Annual values of homes reflect market rents“; Dec 15).
Below are my two cents contribution after being a private home property tax payer for twelve years, with an attempt to demystify the five common myths of property tax.
1. Lower annual value does not necessarily mean lower property tax.
According to IRAS, effective Jan 1 next year, the annual value of 25.7 percent private homes has been reduced while only 1.4 percent has been adjusted upwards.
However, IRAS has implemented progressive tax rates for owner-occupied private residential properties since 1 Jan 2011. A property tax rate of 4 percent of annual value applies unless the annual value is over $65,000 (6 percent tax rate applies). For non-owner occupied properties, new progressive tax rates are implemented since 1 Jan 2014.
By end of November, owners should have received a letter from IRAS, informing them the revised progressive property tax structure for both owner-occupied and non-owner occupied private residential properties.
For rental properties, the brackets of annual values are narrower, with upward adjustment on the percentages of tax rates that ranges from 10 to 20 percent. Even if you are one of the lucky ones with a lower annual value for your property, you may still end up paying more property tax next year.
2. Annual values are not only reviewed annually.
The December 8 article in The Straits Times mentions that “some feel that the volatility in the property market cannot be captured by annual reviews”. Together with the statement from IRAS about the property tax relief of property owners, it gives the wrong impression that annual values of properties are reviewed once a year. If there are changes, they will be made effective at the beginning of every year.
However, besides end of every year, in the past I have received notices from IRAS in March, August and October about changes in annual value. And it is not unusual to have two adjustments in one year’s time.
3. Owners may not be notified of changes in advance.
Unlike any hike in bank interest rates for your housing loans, you won’t receive a notification telling you in advance that the new rates will be effective from next month and changes in repayments will be reflected in the following month.
IRAS usually gives owners one month’s notice. However, on two other separate occasions, the new annual value was being made effective immediately. One letter I received in mid-December had the new annual value backdated to November. Another one sent in early March backdated the change from February.
4. Annual value does not reflect the performance of the rental market.
Property tax is calculated by the annual value of the property. And annual value is estimated based on the rental transactions of similar properties nearby.
In other words, the annual value of your property is determined by the rentals of comparable homes, not the performance of the prevailing rental market.
There are currently 285,000 private residential properties in Singapore. From 1 Jan 2015, only 25.7 percent will have their annual value lowered. Do you think that only one in four private property owners are affected by the slowdown of the rental market?
Below is a chart that shows the annual values of four of my private residential properties as compared to the URA Rental Index from 2002 to 2014. You can see that three properties have their annual values reduced slightly only once throughout the years. For most of the time, they climb up in big steps.
my_property_tax
5. Not all private residential properties are created equal.
Property tax is a wealth tax based on property ownership. The pricier the property you buy, the higher the rental it can generate, and the more property tax you need to pay. Depending on the annual value, the new property tax rate for non-owner occupied properties ranges from 10 to 20 percent.
If your property is in an affluent neighborhood, there are chances that your neighbors have newly renovated their flat or built a swimming pool. The good rent they fetch can inevitably result in a higher annual value for your property.
In a bad economy, it is difficult to find tenants with good budget. High-end properties are therefore most susceptible to high vacancy rate in a slow rental market. However, annual value is the same whether a property is self-occupied, tenanted or vacant. Despite the fact that you don’t have a tenant to help you pay for your mortgage and maintenance fee, you still have to settle with a high property tax.
From 1 Jan 2014, landlords of non-owner occupied properties can no longer claim any refund of property tax for an unoccupied property. The same apply for properties unable to rent out or undergoing repairs.
Lastly, if you find the annual value of your property unreasonably high, you can appeal to IRAS to raise your objection. However, you have to be prepared that the subsequent adjustment can be lower, the same, or even higher.
As what our previous speaker Mr Leung Yew Kwong, Principal Tax Consultant at KPMG Services, told the The Straits Times,

“It’s not that the process is not transparent … it’s impossible for IRAS to go into every home to access the condition it is in.”

Remember the famous saying from Benjamin Franklin?

“In this world nothing can be said to be certain, except death and taxes.”

 This article was first published at propertysoul.com

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Reforming Singapore’s defamation laws: Preventing legal weapons against free speech

Opinion: The tragic suicide of Geno Ong, linked to the financial stress from a defamation lawsuit, raises a critical issue: Singapore’s defamation laws need reform. These laws must not be weaponized to silence individuals.

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by Alexandar Chia

This week, we hear the tragic story of the suicide of Geno Ong, with Ong citing the financial stress from the defamation lawsuit against her by Raymond Ng and Iris Koh.

Regardless of who’s right and who’s wrong, this Koh/Ng vs Ong affair raises a wider question at play – the issue of Singapore’s defamation laws and how it needs to be tightened.

Why is this needed? This is because defamation suits cannot be weaponised the way they have been in Singapore law. It cannot be used to threaten people into “shutting up”.

Article 14(2)(a) of the Constitution may permit laws to be passed to restrict free speech in the area of defamation, but it does not remove the fact that Article 14(1)(a) is still law, and it permits freedom of speech.

As such, although Article 14(2)(a) allows restrictions to be placed on freedom of speech with regard to the issue of defamation, it must not be to the extent where Article 14(1)(a)’s rights and liberties are not curtailed completely or heavily infringed on.

Sadly, that is the case with regard to precedence in defamation suits.

Let’s have a look at the defamation suit then-PM Goh Chok Tong filed against Dr Chee Soon Juan after GE 2001 for questions Dr Chee asked publicly about a $17 billion loan made to Suharto.

If we look at point 12 of the above link, in the “lawyer’s letter” sent to Dr Chee, Goh’s case of himself being defamed centred on lines Dr Chee used in his question, such as “you can run but you can’t hide”, and “did he not tell you about the $17 billion loan”?

In the West, such lines of questioning are easily understood at worse as hyperbolically figurative expressions with the gist of the meaning behind such questioning on why the loan to Suharto was made.

Unfortunately, Singapore’s defamation laws saw Dr Chee’s actions of imputing ill motives on Goh, when in the West, it is expected of incumbents to take the kind of questions Dr Chee asked, and such questions asked of incumbent office holders are not uncommon.

And the law permits pretty flimsy reasons such as “withdrawal of allegations” to be used as a deciding factor if a statement is defamatory or not – this is as per points 66-69 of the judgement.

This is not to imply or impute ill intent on Singapore courts. Rather, it shows how defamation laws in Singapore needs to be tightened, to ensure that a possible future scenario where it is weaponised as a “shut-up tool”, occurs.

These are how I suggest it is to be done –

  1. The law has to make mandatory, that for a case to go into a full lawsuit, there has to be a 3-round exchange of talking points and two attempts at legal mediation.
  2. Summary judgment should be banned from defamation suits, unless if one party fails to adduce evidence or a defence.
  3. A statement is to be proven false, hence, defamatory, if there is strictly material along with circumstantial evidence showing that the statement is false. Apologies and related should not be used as main determinants, given how many of these statements are made in the heat of the moment, from the natural feelings of threat and intimidation from a defamation suit.
  4. A question should only be considered defamatory if it has been repeated, after material facts of evidence are produced showing, beyond reasonable doubt, that the message behind the question, is “not so”, and if there is a directly mentioned subject in the question. For example, if an Opposition MP, Mr A, was found to be poisoned with a banned substance, and I ask openly on how Mr A got access to that substance, given that its banned, I can’t be found to have “defamed the government” with the question as 1) the government was not mentioned directly and 2) if the government has not produced material evidence that they indeed had no role in the poisoning affair, if they were directly mentioned.
  5. Damages should be tiered, with these tiers coded into the Defamation Act – the highest quantum of damages (i.e. those of a six-figured nature) is only to be reserved if the subject of defamation lost any form of office, revenue or position, or directly quantifiable public standing, or was subjected to criminal action, because of the act of defamation. If none of such occur, the maximum amount of damages a plaintiff in a defamation can claim is a 4-figure amount capped at $2000. This will prevent rich and powerful figures from using defamation suits and 6-figure damages to intimidate their questioners and detractors.
  6. All defendants of defamation suit should be allowed full access to legal aid schemes.

Again, this piece does not suggest bad-faith malpractice by the courts in Singapore. Rather, it is to suggest how to tighten up defamation laws to avoid it being used as the silencing hatchet.

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Current Affairs

Man arrested for alleged housebreaking and theft of mobile phones in Yishun

A 23-year-old man was arrested for allegedly breaking into a Yishun Ring Road rental flat and stealing eight mobile phones worth S$3,400 from five tenants. The Singapore Police responded swiftly on 1 September, identifying and apprehending the suspect on the same day. The man has been charged with housebreaking, which carries a potential 10-year jail term.

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SINGAPORE: A 23-year-old man has been arrested for allegedly breaking into a rental flat along Yishun Ring Road and stealing eight mobile phones from five tenants.

The incident occurred in the early hours on Sunday (1 September), according to a statement from the Singapore Police Force.

The authorities reported that they received a call for assistance at around 5 a.m. on that day.

Officers from the Woodlands Police Division quickly responded and, through ground enquiries and police camera footage, were able to identify and apprehend the suspect on the same day.

The stolen mobile phones, with an estimated total value of approximately S$3,400, were recovered hidden under a nearby bin.

The suspect was charged in court on Monday with housebreaking with the intent to commit theft.

If convicted, he could face a jail term of up to 10 years and a fine.

In light of this incident, the police have advised property owners to take precautions to prevent similar crimes.

They recommend securing all doors, windows, and other openings with good quality grilles and padlocks when leaving premises unattended, even for short periods.

The installation of burglar alarms, motion sensor lights, and CCTV cameras to cover access points is also advised. Additionally, residents are urged to avoid keeping large sums of cash and valuables in their homes.

The investigation is ongoing.

Last month, police disclosed that a recent uptick in housebreaking incidents in private residential estates across Singapore has been traced to foreign syndicates, primarily involving Chinese nationals.

Preliminary investigations indicate that these syndicates operate in small groups, targeting homes by scaling perimeter walls or fences.

The suspects are believed to be transient travelers who enter Singapore on Social Visit Passes, typically just a day or two before committing the crimes.

Before this recent surge in break-ins, housebreaking cases were on the decline, with 59 reported in the first half of this year compared to 70 during the same period last year.

However, between 1 June and 4 August 2024, there were 10 reported housebreaking incidents, predominantly in private estates around the Rail Corridor and Bukit Timah Road.

The SPF has intensified efforts to engage residents near high-risk areas by distributing crime prevention advisories, erecting alert signs, and training them to patrol their neighborhoods, leading to an increase in reports of suspicious activity.

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