SINGAPORE — Inland Revenue Authority of Singapore (IRAS) is revising the Annual Values (AV) of most residential properties in Singapore, which include private property and HDB flats, upwards with effect from 1 January 2023, to reflect the rise in market rents.
This revision is part of IRAS’ annual review of properties to compute the property tax payable.
The Government will provide a one-off 60 per cent property tax rebate for all owner-occupied properties, up to a maximum of $60.
Following the revision, All one- and two-room HDB owner-occupiers will continue to pay no property tax in 2023 as their AVs remain below $8,000.
While the majority of owner-occupiers in other HDB flat types will pay between $30 and $70 more in property tax for 2023 as compared to 2022, after taking into account the 60 per cent property tax rebate and between around $38* and $400 more in property tax from 2024 onwards.
The property tax payable is derived by multiplying the property tax rate with the AV of the property. The increase in property tax after the rebate will be higher for those with more expensive properties.
As a concession, owner-occupiers enjoy lower property tax rates for their homes, while all non-owner-occupied residential properties (which include second homes and those held for renting out or investment) are taxed at higher residential tax rates.
As announced in Budget 2022, the property tax rates for 2023 will be made more progressive from 1 January 2023, with higher value and non-owner-occupied residential properties being taxed at higher rates.
Deputy Prime Minister Lawrence Wong in his Budget speech said that the increases in property tax rates will be implemented in two steps, starting with the tax payable in 2023. When fully implemented, they will raise Singapore’s property tax revenue by about $380 million per year.
However, with this revision by IRAS, the revenue would probably be higher than Mr Wong’s initial estimation.
IRAS Monitors Market Rental Trends To Determine The Annual Values Of Properties
IRAS states that the market rents of HDB flats and private residential properties have risen by more than 20 per cent since the last revision of AVs on 1 January 2022 and therefore, revising the residential property AVs accordingly from 1 January 2023 to reflect this.
HDB flat owners may refer to HDB’s website for more information on median rents of HDB flats. Private property owners may refer to URA’s website.
One-Off Property Tax Rebate In 2023 For Owner-Occupied Homes
To mitigate the increase in property tax payable, amidst concerns about global inflation and cost of living, the Government will provide a one-off rebate, which is equivalent to 60 per cent of the 2023 Property Tax Bill, up to $60.
All owner-occupied residential properties will receive the rebate.
The rebate will be automatically offset against any property tax payable in 2023.
Social Support Schemes Will Not Be Affected By This Revision Of AVs
IRAS states that social support schemes that use AV to determine scheme eligibility (e.g. GST Voucher scheme, MediShield Life premium subsidies, Workfare Income Supplement Scheme) will not be affected by the revision of AVs in 2023, as AVs as of 2022 will be used to determine scheme eligibility in 2023.
However, it does not clarify if the schemes would be affected by the revision in 2024.
*Based on the figures of IRAS, the increase for 3-room flats is $38.40 – $90.40 in 2024.
