Results 1 to 3 of 3

Thread: Property Owners: Lower tax for most

  1. #1
    mr funny is offline Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default Property Owners: Lower tax for most

    http://www.straitstimes.com/PrimeNew...ry_493550.html

    Feb 23, 2010

    Property Owners: Lower tax for most


    MOST home owners will pay less property tax after a new property tax system is implemented this year.

    All Housing Board flat owners and the bulk of private property owners will save $240 a year in tax with the new three-tier system.

    The savings will result from the first $6,000 of a home's annual value (AV) now being exempt from tax. The next $59,000 of the AV will be taxed at 4 per cent, and any remaining value above $65,000 will be taxed at 6 per cent.

    The AV is the estimated annual rent of an owner-occupied property if rented out instead.

  2. #2
    mr funny is offline Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default

    http://www.straitstimes.com/PrimeNew...ry_493566.html

    Feb 23, 2010

    BUDGET 2010

    New progressive property tax system

    By Jessica Cheam


    SINGAPORE is shifting to a progressive property tax system that will mean lower- and middle-income property owners living in their homes will pay less tax.

    All Housing Board (HDB) flat owners and a large majority of private property owners will enjoy tax savings of $240 a year as a result of the new system.

    Finance Minister Tharman Shanmugaratnam said yesterday in his Budget statement that the Government intends to keep the property tax 'as a means of redistribution in our society, together with our income tax regime'.

    Although the current system already taxes the wealthy more than others, there is 'scope for us to introduce further progressivity in property taxes', he said.

    The new property tax regime is a three-tiered one at 0 per cent, 4 per cent and 6 per cent, and replaces the current flat 4 per cent concessionary rate for owner-occupied residential homes.

    The first $6,000 of a home's annual value (AV) will be exempted from property tax - saving owners $240.

    The next $59,000 will be taxed at 4 per cent and any AV above $65,000 will be taxed at 6 per cent.

    The AV is the estimated annual rent of an owner-occupied property if it were rented out, excluding rent for furniture, fittings and any service charge.

    The new system will apply for property tax payable from January next year.

    Currently, owner-occupied homes with AVs below $10,000 also enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AV of their properties.

    This will cease and be replaced by the new system. All other non owner-occupied properties are taxed at 10 per cent and are unaffected by the new tax regime.

    Mr Tharman explained yesterday that when the Government abolished estate duty entirely in 2008, property tax was the remaining form of tax on assets.

    He said the Government intended to retain property tax as it did not affect the middle and upper-middle groups more than the wealthier ones.

    This was the reason that estate duty, which had been impacting middle and upper-middle income earners to a disproportionate extent, had been scrapped.

    Mr Tharman added that a moderately progressive property tax system, together with an income tax system that collects more tax from the wealthy and a flat goods and services tax rate that everyone pays, will, together form a fair system of taxes in Singapore.

    'Everyone pays something, but the rich pay more. Taken together, the overall burden of taxes will and must remain low by international standards,' he said.

    He also noted, however, that as HDB homes gradually appreciate in value over the long term, flat owners will see an increasing property tax bill over time.

    KPMG executive director (tax services) Leonard Ong said yesterday that the new system is a 'fairer way of collecting property taxes, as only a small, wealthier majority end up paying more'.

    Indeed, owners of high-end properties will see a small increase in tax payable.

    They comprise the top 3 per cent of private owner-occupied residential properties, or the top 0.4 per cent of all owner-occupied homes in Singapore, said Mr Tharman.

    Homes with AVs of about $80,000 will face only a small increase in tax, of slightly less than $100 per year.

    A property with an AV of $150,000, which typically is a large property in the central districts and is within the top 0.5 per cent level of private owner-occupied homes, will face an increase in property tax of about $1,500 per year.

    However, the new tax rates, even for the high-end, will remain lower than in most international cities, he added.

    'That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike.'

    Real estate consultancy Colliers International managing director of China, Singapore and Taiwan, Mr Dennis Yeo, said the switch to a more moderate progressive tax schedule is a more long-term approach than the periodic tax rebates extended by the Government previously.

    'It is expected to have little bearing on the property market in terms of market sentiment and activities,' he said.

    This new progressive system of property taxes will cost the Government about $230 million a year initially, said Mr Tharman.

    What's changing

    CURRENTLY: Owner-occupied residential properties are taxed at a concessionary 4 per cent rate.

    In addition, owner-occupied residential properties with an annual value (AV) of below $10,000 can enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AV of their properties.

    The AV is the estimated annual rent of your property if it were to be rented out, excluding the rent for furniture, fittings and any service charge.

    All other properties are taxed at 10 per cent.

    BUDGET 2010:

    For property tax payable from January next year, the 1994 property tax rebates will be replaced by a progressive property tax schedule for owner-occupied residential properties:

    # 0 per cent for the first $6,000 of AV;

    # 4 per cent for the next $59,000 of AV;

    # 6 per cent for the balance of AV in excess of $65,000.

    Non-owner-occupied residential properties and other properties will continue to be subject to 10 per cent property tax.

  3. #3
    mr funny is offline Any complaints please PM me
    Join Date
    May 2006
    Posts
    8,129

    Default Property tax gets a welcome tweak

    http://www.businesstimes.com.sg/sub/...73602,00.html?

    Published February 23, 2010

    BUDGET 2010: PROPERTY

    Property tax gets a welcome tweak

    More progressive system will benefit more owners, won't hit high-end demand

    By KALPANA RASHIWALA


    MOST market watchers have welcomed Finance Minister Tharman Shanmugaratnam's move towards a progressive property tax regime for owner-occupied residential properties as a fairer system.

    Currently, owner-occupied residential properties are taxed at a flat rate of 4 per cent of annual value (AV) or the estimated annual rent of a property, excluding the rent for furniture, fittings and service charge.

    But for property tax payable on such properties from January 2011, there will be three tiers of tax rates. The first $6,000 of AV will be exempted from property tax. The next $59,000 AV will be taxed at 4 per cent and the balance of AV above $65,000 will be taxed at 6 per cent.

    'The new system ... will benefit most Singaporeans ... all HDB flat owners and the large majority of private property owners will pay lower taxes compared to the current system,' Mr Tharman said.

    '...our property tax rates, even for the high-end, will remain lower than in most international cities. That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals,' he added.

    All owner-occupied homes will enjoy tax savings of $240 as a result of the exemption of the first $6,000 of AV, according to Mr Tharman.

    'Owners of high-end properties with AVs of more than $77,000 will see a small increase in tax payable, as their effective tax rates will be higher than the current 4 per cent. They comprise the top 3 per cent of private owner-occupied residential properties, or the top 0.4 per cent of all owner-occupied homes in Singapore.

    'Homes with AVs of about $80,000 will face only a small increase in tax, of slightly less than $100 per year. A property with an AV of $150,000, which typically is a large property in the central districts and is within the top 0.5 per cent level of private owner-occupied homes, will face an increase in property tax of about $1,500 per year,' he added.

    The move will cost the government about $230 million a year initially.

    Knight Frank managing director (residential services) Peter Ow welcomed the change, describing it as 'taxing the rich to give the poor. It's a fairer system'.

    He does not expect the higher property tax rate payable for higher AV properties to dent demand for residential properties bought for owner occupation. 'The 2 per cent will not hurt the pockets of owners in this bracket. A property with $65,000 AV would probably be worth around $2.5 million to $3 million.'

    Leonard Ong, executive director, KPMG Tax Services, said: 'We think it is a good way for Government to help owner occupiers of residential properties in Singapore. The bulk of them will be in the lower band of property tax; only a minority, those who own higher-value properties, will be in the upper tax band. This benefits more people than the current structure, which is a flat rate system.'

    The property tax for non-owner-occupied residential properties as well as other properties will remain at a flat rate of 10 per cent of AV.

    Inland Revenue Authority of Singapore determines the AV of a property by analysing rents of similar properties.

    Currently, in addition to the 4 per cent concessionary tax rate, owner-occupied residential properties with AVs below $10,000 can enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AVs of the properties. The rebates, introduced together with the Goods and Services Tax, are aimed at supporting the lower- and middle-income groups. 'It has significantly reduced property tax payable by HDB flat owners. However, as HDB homes gradually appreciate in value over the long term, flat owners will see an increasing property tax bill over time,' Mr Tharman said.

    The government provided special additional rebates last month to mitigate increases in tax payable as a result of higher rentals and hence AVs of HDB flats over the past two years.

    However, the need for a longer-term solution that provides a fair and balanced system for all property owners led Mr Tharman to announce the progressive property tax schedule for owner-occupied residential property.

    Market watchers also noted that there were no property tax rebates for commercial and industrial properties in the latest Budget statement.

    Earlier in his Budget speech when he covered the fiscal position for FY2009, Mr Tharman also revealed that a strong recovery in the volume of transactions in the property market boosted stamp duty collections which ended up $1.3 billion higher than initially estimated.

Similar Threads

  1. Lower property tax for HDB flats
    By reporter2 in forum Finance and Legal
    Replies: 1
    -: 01-12-16, 20:27
  2. Replies: 0
    -: 07-12-15, 16:49
  3. Property prices lower, ‘but still out of reach’
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 1
    -: 21-10-14, 15:21
  4. Property tax for most will still be lower even if AV is hiked
    By mr funny in forum Finance and Legal
    Replies: 0
    -: 06-03-10, 03:12
  5. Laguna Park owners mull lower sale price
    By mr funny in forum En Bloc Discussion and News
    Replies: 1
    -: 19-10-09, 18:24

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •