Let property assessment be more transparent

http://business.asiaone.com/Business...07-184398.html

Mon, Dec 07, 2009

The Straits Times

Let property assessment be more transparent


THE system of property taxation in Singapore, apart from hotels, relies on an assessment of the 'market rent' of a property called the annual value (AV). A rate (currently 10 per cent) is then fixed to the AV to arrive at the annual tax payable.

While this system has an obvious benefit of giving the taxman the upper hand to fix the level of property tax, despite market movements, it lacks transparency. The law stipulates that the property owner must pay the tax first, regardless of whether the AV was fixed correctly or not. If he disagrees with the assessment, he can object to it, and eventually go to the Valuation Review Board (VRB) for arbitration.

The channel for objection and appeal seems to provide a fair means to examine the assessment by the authorities, but it suffers two deficiencies.

* First, it is time-consuming and an objection can stretch for years and still not be attended to.
* Second, it is costly to start an appeal to the VRB because each case costs $200. So if a building has 100 units for appeal, it will cost $20,000.

As a start, perhaps the authorities can publish on their website the level of assessment of each year's review so property owners can know how these assessments compare with market rents.

In the long run, the Government should look into taxing property owners for the actual rents they fetch, with a right to review them if they should appear low compared with market rents.

Patrick Sio

Your suggestion that IRAS tax according to the actual rent received cannot work for properties that are owner-occupied.

The Chinese character for government has "two mouths".

If you can accept the fact that no minister anywhere else in the world is paid a million dollars a year or more and continue to live in Singapore, what's the big deal about some property tax?:tongue3:

That's why some of my friends insist on renting their homes and let their landlords suffer the kind of heartache you are experiencing.