Property tax rebate for HDB owner-occupiers

http://www.businesstimes.com.sg/sub/...60145,00.html?

Published November 19, 2009

Property tax rebate for HDB owner-occupiers

Set at 50% of tax payable, it is capped at $120; zero tax for one and 2-room HDB owners


THE government will grant a new property tax rebate to all HDB owner-occupiers next year to help them adjust to the increase in annual values (AVs).

The Inland Revenue Authority of Singapore (Iras), which reviews the AVs of all properties, did not revise AVs for HDB flats on Jan 1 this year, given the uncertainty in market rental trends due to the recession.

HDB rentals have since stabilised after a moderate decline and have begun to rise. As a result, current values of HDB rentals, as well as HDB resale prices, are significantly higher than 2007 levels. Iras will therefore revise the AVs of all HDB flat types from Jan 1, 2010. The last AV revision for HDB flats was done last year, based on rental values in 2007.

The new rebate granted to HDB owner-occupiers will apply to property tax payable next year after deducting the 1994 GST Rebate, which is available to all residential property owner-occupiers.

The new rebate is set at 50 per cent of the payable property tax and is capped at $120. To provide additional help to owner-occupiers of smaller HDB flats, the rebate will be the lower of $50 or the actual property tax amount.

With the new property tax rebate for HDB owner-occupiers and the ongoing 1994 GST Rebate, all one and two-room HDB owner-occupiers will continue to pay zero property tax next year.

For average three-room HDB owner-occupiers, the increase in property tax next year, after deducting the special rebates, will be $72 for the year. For four-room HDB owner-occupiers, the average tax increase will be $97 for the year and for five-room HDB owner-occupiers, the average tax increase will be $107 for the year as a whole. For executive HDB owner-occupiers, it will be $103.

Owners of HDB flats will receive their valuation notices and property tax bills by Jan 1 next year. Property tax for 2010 is payable by Jan 31 next year.

Iras encourages HDB flat owners to use the Giro payment scheme to enjoy up to 12 interest-free monthly instalments. Application forms can be downloaded from www.iras.gov.sg.

http://www.straitstimes.com/PrimeNew...ry_456155.html

Nov 19, 2009

Property tax on HDB flats going up

One-off rebate to cushion rise; one- and two-room owners will pay nothing

By Jessica Cheam


HOMEOWNERS: be prepared to pay higher property taxes next year.

In line with the rally in home prices, the taxman is revising upwards the value of Housing Board (HDB) homes.

The Inland Revenue Authority of Singapore (Iras) announced yesterday that the annual values (AV) of all types of HDB flats will be raised with effect from Jan 1.

This will mean a hike in property taxes for 2010.

The property tax rate in Singapore is currently set at 10 per cent of a property's AV, although owner- occupied residential properties enjoy a concessionary 4 per cent tax rate.

To soften the impact, a one-off rebate is being introduced to help HDB homeowners adjust to the increase.

With this new rebate and ongoing GST rebates, low-income households who live in one-room or two- room flats will not have to pay any tax for 2010, Iras said.

Industry analysts yesterday said that Iras's latest move was 'not totally unexpected'. HDB resale prices have risen a hefty 31.2 per cent in the past two years, and a further 3.8 per cent in the first nine months of the year.

'As HDB resale flat prices have exceeded the property peak of 2007, this was inevitable,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

What was more surprising, however, was the timing of the announcement.

'There are households who are still reeling from the recession, and unemployment is still high. It could have come a bit later when the job market has recovered,' said Mr Mak.

Iras last revised AVs on Jan 1, 2008.

It said yesterday that it reviews all property AVs annually, including HDB flats, to 'ensure that they reflect prevailing market rental values for the purpose of determining property tax'.

AVs of HDB flats were not revised last year, despite HDB rentals increasing by between 31 per cent and 37 per cent in 2008 relative to 2007, it said.

This adjustment was deferred in view of the uncertainty in market rental trends caused by the economic recession. Iras added that there was evidence of rental value declines due to the negative economic outlook at the time.

However, market sentiment has since changed dramatically. Iras noted that HDB rentals stabilised after a moderate decline from late 2008 to the middle of this year, and have since begun to rise.

As a result, current values of HDB rentals, as well as resale prices, are still significantly higher than levels seen in 2007.

'The AVs of HDB flats will, therefore, have to be adjusted beyond the last revision in January 2008,' said Iras.

But to help HDB homeowners adjust to the rise, the Government is granting a new property tax rebate to all HDB owner-occupiers for property tax payable in 2010 - set at 50 per cent of the property tax payable and capped at $120. Low-income households will be assisted because flats with a property tax of $50 and below will not need to pay property tax next year.

The average three- room HDB owner-occupier will face an increase, after rebates, of $72 for the year.

The rise will be about $97 for four-roomers, $107 for five-roomers and $103 for executive HDB flat owners.

PropNex chief executive Mohamed Ismail said the rebates will help cushion the blow. He pointed out that HDB owners have enjoyed higher rentals and resale values over the past two years, so the increase in taxes was 'to be expected'.

HDB homeowner Lim Chye Boon, 48, said he had expected the tax increase to come 'at some point' so was not too bothered.

But for Mr Kenny Koh, 27, who has just bought his five-room flat in Sengkang, it was not welcome news.

'I just spent so much money buying my new home and now have to pay more again,' he said. 'But at least, the rebate helps a bit.'

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How come all went up except for Executive Flats which actually will be lower? :doh:

tax is raised on all.
Average increase in 2010 not average tax in 2010

2010 executive = 106.38+103 = 209.38

How are you reading this? This is what it says to me.
If that's not what MOF means then they need to fix their English

Quote:

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Originally Posted by EBD

tax is raised on all.
Average increase in 2010 not average tax in 2010

2010 executive = 106.38+103 = 209.38

How are you reading this? This is what it says to me.
If that's not what MOF means then they need to fix their English

---

If you look at 3-room, the increase in 2010 is $72 over an average of 2009 $2.17 which amounts to a 33x increase. Whereas for Executive, although the value is higher, its less than 1x. :confused:

Hence, isn't the increase in taxes will affect the lower income staying in the smaller flats more? :doh:

Correct..... those lucky guys! [/sarcasm]

in other countries this would be political suicide running up to a general election.
Fortunately the gov here knows exactly what the response will be. Grumble then nothing.

btw, did anyone see an explanation of why all of a sudden tax is being raised? Is there some hole that needs to be plugged in the balance sheet somewhere or is this to "reward" the people for the increase in HDB prices?

Really pity those who are just scraping by. $2 to $74 a month is a major increase if you household income is 1000/month.