Vacant land or development sites

Pointers for Buyers of Vacant Land or Development Sites

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 the 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 year as well as the current year.  Before you buy we advise you to check if there is any outstanding property tax on the property 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.

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 property which includes vacant land and development sites.

How is Property tax calculated?

For vacant land and development sites, property tax is calculated based on a percentage (Tax rate) of the Annual Value (AV) of your land. The AV is assessed at 5% of the estimated freehold land value. The current tax rate is 10%.

 Example : AV of land is $1,000,000 

 
For land purchased in an en-bloc sale, please refer to the e-tax guide onProperty Tax Treatment of En-Bloc Sales Site (59KB).

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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

You may apply for tax exemptions or relief if you satisfy the conditions under the following schemes.

• "Approved Building Project" (ABP)  

• If you demolish and are reconstructing a new residential house for your own occupation, you may claim for remission of tax under the 1997 Order.
  
  Note: The Property Tax (Residential Premises Under Construction)(Remission) Order 1997 is available for home owners who rebuild their houses for their subsequent occupation. It is applicable when the land is made vacant by the demolition of a house for the purpose of reconstructing a replacement house. If you have purchased a piece of vacant land, the remission is not applicable. 

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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). More information for corporate owners.

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.

When you buy any land, 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 property purchase will arrange for payment of Stamp Duty.
 

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FAQs