10 February 2012
We refer to the letters by Mr Paul Chan Poh Hoi and Mdm Yeo Siok Peng, ‘Why most homes should be excluded from AV amendments’ (TODAY, 28 January 2012) and ‘We do not need more expenses to deal with’ (TODAY, 1 February 2012).
We note the concerns raised by Mr Chan and Mdm Yeo that owner-occupiers do not derive incomes from their homes and thus find the rise in property tax puzzling. Property tax is a tax on property ownership, and is levied irrespective of whether the property is owner-occupied or rented out. Properties are taxed at a standard rate of 10% of the property’s annual value. Owner-occupied homes enjoy concessionary progressive tax rates of 0%, 4% and 6% depending on the annual values. Thus, for two similar properties of the same annual value, an owner-occupier would pay lower property tax than an owner who rents out his property.
The property tax amendments reflect the change in market values of the property. In Singapore, we use annual value which is market rentals of similar or comparable properties as a proxy to market values. The practice of using market values or market rents to determine the annual values and property tax is aligned to international practice, for example in countries such as UK, US, Hong Kong and Australia.
Information on property tax and annual value revision is available at www.iras.gov.sg. Taxpayers with enquiries may call IRAS on 1800-356 8300 or e-mail us at firstname.lastname@example.org for assistance.
We would like to thank Mr Chan and Mdm Yeo for their feedback and the opportunity to clarify.
Claire Chua (Mrs)
Director (Corporate Communications)
Inland Revenue Authority of Singapore