Pointers for Buyers of Private Residential Properties
1. Property Tax Liabilities
2. Notify Change of Ownership
3. Property Tax Assessment
4. Payment Arrangement
5. File Property Tax Claims
6. Other Taxes on Property
1. Property Tax Liabilities
Once IRAS is notified of the property transfer, all property tax related correspondence including property tax bills will be sent to you as the new owner. As the property owner, you will be liable for all property tax on the property. Hence it is important that you, through your lawyer, enquire if there are any outstanding or future property tax liabilities, and make provisions for the seller to reimburse you for the property tax amount that is to be borne by him.
Enquire on outstanding property tax liability
Property Tax is payable in advance by 31 January every year. If you are buying the property after January, the seller ought to have paid property taxes from previous years as well as the current year. Before you buy we advise you to check if there is any outstanding property tax as you may be subsequently billed for any outstanding property tax that has not been paid by the previous owner/s. We encourage you to arrange for payment by GIRO for your tax obligations.
Enquire on possible future property tax liability
If you are buying a property that is under construction or newly completed and hence not assessed for property tax yet, you may be billed for the property tax that starts from the TOP date. This is usually within one year of TOP date for residential properties. Your lawyer would usually assist you in seeking any reimbursement of property tax from the seller/developer if the property is transferred to you after the TOP date.
Apportion property tax liabilities
The apportionment of property tax liabilities is a private arrangement between the seller and buyer. Your lawyer would normally make a legal requisition to check on the outstanding property tax, and make provisions to settle the outstanding amount with the seller. IRAS does not apportion nor arbitrate property tax liabilities between the parties. All bills and notices after the transfer of the property will be sent to you as the new owner.
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2. Notify Change of Ownership
You may wish to remind your lawyer to ensure that the seller/transferor’s lawyer has filed a Notice of Transfer to notify IRAS within one month of the property transfer. IRAS will update the ownership record for property tax purpose based on the information given.
For properties owned by more than one owner, all owners are collectively responsible for paying property tax. For correspondence purpose, we will usually address to the owner who is listed first in the Notice of Transfer filed by the seller’s lawyer. Hence, it is important that you as the new owner or one of the new owners, inform the seller’s lawyer the person who will be responsible for the property tax matters. Once the transfer record is updated, we will be corresponding with the person on all property tax matters, including payment of property tax.
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3. Property Tax Assessment
Property Tax is a tax on the property, and is payable by the owner whether or not the property is owner-occupied, rented out or vacant. It is unlike income tax which is levied only when owners derive rental income from properties.
How is Property Tax calculated?
Property Tax is calculated based on a percentage (Tax rate) of the Annual Value (AV) of your property.
The current tax rate is 10% per year. If you owner-occupy your home, you may apply for owner-occupier tax rates. You need to log in to myTax Portal with your SingPass > Apply for owner-occupier tax rates (left-hand menu).
The owner-occupier tax rates based on the Annual Values (AVs) of your building are as follows:
| Annual Value ($) |
Tax Rate (%) |
| First 6,000 |
0 |
| Next 59,000 |
4 |
| Amount exceeding 65,000 |
6 |
Example 1: AV of your house is $24,000
| Property Tax payable is: |
First $6,000 X 0% |
= $ 0 |
| |
Next $18,000 X 4% |
= $720 |
| Tax payable: |
= $720 |
Example 2: AV of your house is $84,000
| Property Tax payable is: |
First $6,000 X 0% |
= $ 0 |
|
Next $59,000 X 4% |
= $2,360 |
| |
Remaining $19,000 X 6% |
= $1,140 |
| Tax payable: |
= $3,500 |
New! Budget 2013 Changes
The Government announced the introduction of progressive tax rates for all residential properties from 1 Jan 2014 and 1 Jan 2015. See revised rates below.
A) Progressive Tax Rates for Residential Properties (Exclude residential land)
|
Progressive Tax Rates |
| Annual Value($) |
Effective 1 Jan 2014 |
Effective 1 Jan 2015 |
| First 30,000 |
10% |
10% |
| Next 15,000 |
11% |
12% |
| Next 15,000 |
13% |
14% |
| Next 15,000 |
15% |
16% |
| Next 15,000 |
17% |
18% |
| AV in excess of $90,000 |
19% |
20% |
B) Progressive Tax Rates for Owner-Occupied Homes
|
Progressive Tax Rates |
| Annual Value($) |
Effective 1 Jan 2014 |
Effective 1 Jan 2015 |
First 8,000
|
0% |
0% |
| Next 47,000 |
4% |
4% |
| Next 5,000 |
5% |
6% |
| Next 10,000 |
6% |
6% |
| Next 15,000 |
7% |
8% |
| Next 15,000 |
9% |
10% |
| Next 15,000 |
11% |
12% |
| Next 15,000 |
13% |
14% |
| AV in excess of $130,000 |
15% |
16% |
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4. Payment Arrangement
We encourage you to pay your Property Tax by GIRO as you will enjoy up to 12 interest-free monthly instalments. Alternatively, you may check out other available modes of payment.
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5. File Property Tax Claims
If you owner-occupy your home, you may apply for owner-occupier tax rates. If you are a Singaporean or Singapore Permanent Resident who own and occupy only one private residential property or executive condominium, you need not apply as the concession will be granted automatically.
If your property has been vacant for more than 30 days or a calendar month despite attempts to rent it out, you may apply for a refund of tax for the vacant period. New! The Government announced the removal of the property tax refund concession on unoccupied buildings with effect from 1 Jan 2014. All vacant buildings will be taxed at the prevailing tax rates. Tax treatments of vacant properties will also be streamlined. More information on Property Tax Changes for Unoccupied Buildings and Vacant Land (76KB)
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6. Other Taxes on Property
Rent received from the letting of property in Singapore is subject to income tax. Find out more on Rent & Net Annual Value (NAV).
Generally, the gains derived from the sale of a property in Singapore, or capital gains, are not taxable. However, when a person is deemed to be trading in properties, the gains from the sale of property in Singapore is income and it is taxable. Find out more on Gains from sale of property.
If you purchase and sell a residential property within four years of acquisition, you are required to pay seller’s stamp duty.
When you buy any property, you need to pay Stamp Duty within 14 days of the date of Contract/Agreement. In most instances, your lawyer acting for you in the purchase of the property will arrange for payment of Stamp Duty.
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FAQs
For HDB flat owners, HDB will inform IRAS on the change of ownership. Thus you do not have to inform IRAS separately.
For other properties, the seller or transferor shall give notice of the sale or transfer to IRAS within 1 month.
Generally, the lawyers acting on behalf of the seller/transferor will submit the Notice of Transfer via e-Notice of Transfer to IRAS.