http://www.straitstimes.com/archive/...homes-20120821
Iras: Property tax flat for most landed homes
Published on Aug 21, 2012
By Jonathan Kwok
THE taxman's review of the annual values of 56,000 landed homes so far this year has left about two-thirds unchanged, so the owners will not have to pay higher property tax.
The other homes have had their annual values adjusted upwards by an average of about 10 per cent, generally below last year's rises, the Inland Revenue Authority of Singapore (Iras) told The Straits Times.
A small number were increased over 20 per cent, as they had not been revised for a year or more.
There are 72,000 landed homes in Singapore and 193,000 private high-rise apartment units.
Iras is still reviewing the annual values of the private apartments and the rest of the landed homes. The review is expected to be completed by the end of the year.
Home owners typically keep an eye on a property's annual value, as it determines how much tax they pay. The annual value is the estimated annual rent the property may fetch.
This value can be revised up or down, based on market rentals of similar properties in the vicinity, said Iras. Valuation notices will be sent to owners when the annual values are revised, Iras added.
Reviews are generally held every year, but do not always result in changes to the annual values.
Property taxes depend on the annual value, and the rates differ according to whether the owner lives in the home or rents it out.
For those who rent out a property, the tax is a flat 10 per cent of the annual value. The tax will be lower if an owner lives in the property, with the rates staggered: No tax for the first $6,000 of a property's annual value, but the next $59,000 is taxed at 4 per cent, rising to 6 per cent for annual values exceeding $65,000.
Property analysts say rents in some segments have eased, with the global crisis hitting expat budgets.
But because the annual value is a lagging indicator, it is more likely to capture last year's rates, and may not fully reflect the current market.
"The rental market in the high-end areas has come off," said Savills Singapore research head Alan Cheong. He noted that rents for some units above 1,000 sq ft are lower than a year ago. But he added that rents in some other areas are still strong.
Mr Cheong said: "Rentals at suburban areas are holding up relatively well, as many incoming expats are choosing to live there."
Trader David Goh, 52, received an Iras notice saying that his house's annual value will increase 30 per cent in line with market rents, raising his tax bill by about $400 to around $1,600.
He has lived for 13 years in a corner terrace unit in Holland Grove that sits on 3,000 sq ft of land, and said the last jump in his house's annual value was about 20 per cent two years ago.
Mr Goh questioned pegging annual values for owner-occupiers to rents received by their neighbours. "I didn't renovate the place... but the annual value keeps on going up."
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