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HDB property tax up on higher market values

But $55 rebate may mean marginal rise for lower-, middle-income households

Published on Dec 4, 2011

By Yen Feng


Rising rents of HDB flats have led to an increase in their market values, which in turn are attracting a higher property tax for next year.

But most HDB flat owners may be paying only a marginal increase, after a government rebate for lower- and middle-income households.

For such households, the Government will give a one-off rebate of $55 to offset some of the increase in property tax. This rebate, however, does not apply to flats that are not owner-occupied.

The Inland Revenue Authority of Singapore (Iras) made this announcement last Friday, as the annual values (AVs) of HDB flats are to be revised next year, reflecting the rise in market values.

The AV is the estimated annual rent of an owner-occupied property if it were rented out, excluding rent for furnishings and utilities.

Owners of one- and two-room HDB flats who live in their flats will not pay property tax next year, while those in three-room flats will pay roughly the same tax as last year, the Iras said.

For those in four- and five-room flats, the increase will be between $5 and $29 for the whole year.

The Iras said that the AVs of all HDB flats were last revised last year, taking into account the changes in market rents in 2009. They were not revised this year, as the increase in HDB market rents in the preceding year was small.

Taking last year and this year together, market rents have risen by around 20 per cent to 28 per cent - hence this latest revision, the tax agency said.

Asked whether the AVs of HDB flats would continue to rise, PropNex Realty chief executive Mohamed Ismail said HDB rents are now likely to remain stable, or increase marginally, in the near future.

This is because HDB rents are at an all-time high, and given the already 'narrow gap' in rent between an HDB flat and a private property in an outlying area, renters are likely to opt for the latter due to its amenities, he added.

A four-room HDB flat in Bukit Batok may now be rented for about $2,000 to $2,100; the rent for a condo in a similar outlying area may be about $2,500 to $2,600.

According to the Iras, the majority of four-room owner-occupied HDB flats will see a rise of $5 to $17 in property tax; only 2 per cent of four-roomers will see a rise of $29.

Property tax has to be paid by Jan 31 next year. Taxpayers with enquiries may call 1800-356-8300 or send an e-mail message to [email protected]

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