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Net Annual Value (NAV)

NAV is the annual value (as shown in your property tax bill) of your property in Singapore less allowable expenses. Annual value is the gross amount at which the property can be expected to be rented from year to year.

When is Net Annual Value (NAV) taxable

From YA2010 onwards
NAV of all residential properties is not taxable.

YA2009 and before
NAV of a property is taxable if it is used by the owner or on behalf of the owner for residential purposes, and not for the purpose of producing profit (business purpose) in Singapore.

However, an annual exemption of up to $150,000 is allowed to the NAV of one property, which is occupied by the owner. Any excess above $150,000 is taxable.

The exemption does not apply in the case of another person occupying the property on your behalf.

If your properties are occupied for residential purpose

 

Use of property
Tax treatment on owner
You occupy 1 property Exemption of up to $150,000 is allowed to the NAV of this property.
You occupy more than 1 property Exemption of up to $150,000 is given to 1 property, the one with the highest NAV.

NAV of the rest of your properties is taxable.
Property is occupied by joint owners NAV is not taxable if it is below $150,000.

If the NAV is more than $150,000, all joint owners will be taxed on their share of NAV that is in excess of $150,000.
Property is occupied rent-free by others on your behalf Full amount of NAV is taxable (no exemption is applicable).

If the property is used for business purposes, NAV is not taxable.
Property is left vacant NAV is not taxable.

 

Example 1: You have 3 properties

 

Property

Ownership

NAV

Occupied by

A    Sole owner $200,000 owner
B Sole owner $65,000 owner
C Jointly owned with brother (assume equal share) $70,000 brother



You have the following 3 properties:

Property
Ownership
NAV
Occupied by
A Sole owner $200,000 owner
B Sole owner $65,000 owner
C Jointly owned with brother
(assume equal share)
$70,000 brother
  • If you occupied more than one property

    Exemption is given to property A since the NAV is higher. As the NAV is more than $150,000, the excess of $50,000 is taxable.

    NAV taxable on owner

    Property A $ 50,000
    Property B $ 65,000
    Total
    $115,000
  • If property is occupied by joint owners

    • You will not be taxed on NAV of property C since the property is occupied by a joint owner and NAV of the property is less than $150,000

    • In the case where NAV of property C is $180,000, you and your brother will be taxed on the excess of $30,000 ($180,000 - $150,000). Both of you will each declare $15,000 ($30,000/2).

If properties are owned and occupied by married couples, for residential purpose

 

Scenario
Use of property
Tax treatment
Husband owns 2 properties
The property occupied by husband Exemption of up to $150,000 is allowed to the NAV of this property.
The property occupied by wife Husband will be taxed on the NAV
Husband and wife each owns a property
Husband and wife occupied both properties  Exemption of up to $150,000 is given to 1 property, the one with the highest NAV.

Husband or wife (whoever is the owner) will be taxed on the NAV of the other property.

Example


  • Husband owns two properties

    Property
    Ownership
    NAV
    Occupied by
    A Husband $200,000 Husband
    B Husband $65,000 Wife

    Exemption is given to property A since the husband (the owner) occupies it. As NAV is more than $150,000, the excess of $50,000 is taxable.

    Taxable NAV on owner (husband)

    Property A $ 50,000
    Property B $ 65,000
    Total
    $115,000
  • Husband and wife each owns a property

    Property
    Ownership
    NAV
    Occupied by
    A Husband $100,000 Husband and wife
    B Wife $65,000 Husband and Wife

    For purpose of deciding on which property to be given the exemption, the wife's property is considered together with that of the husband as she is living with her husband.

    Since both properties are occupied by the owners, exemption is given to the property with the higher NAV i.e. husband's property.

    Taxable NAV on owner (wife):

    Property B $65,000

How to compute NAV

Example

  • NAV of property is more than $150,000

    Annual value $200,000
    Less: deductible expenses 1 $ 40,000
    NAV $160,000
    Less: exemption $150,000
    Taxable NAV $ 10,000
    1 To claim the expenses, owner must provide details of the deductible expenses incurred during the period in which the property is occupied.

    The NAV of $10,000 will be subject to tax based on your share in the property. If you own 50% of the property, $5,000 (50% of $10,000) is assessable on you.

  • NAV of property is less than $150,000

    Annual value $200,000
    Less: deductible expenses $60,000
    NAV $140,000
    Less: exemption (Lower of NAV or $150,000) $140,000 (restricted)
    NAV deficit Nil

    Since the NAV is less than the exemption limit of $150,000, it is not taxable.

    You and your brother jointly own a property, which is occupied by a friend.

    Annual value                                             $20,000

    Less: deductible expenses                   $8,000

    NAV                                                             $12,000

    You and your brother will each declare $6,000 ($12,000/2) in your income tax forms.

You may refer to the Statement of Gross Annual Value and Expenses Incurred in computing the net annual value.

Statement of Net Annual Value (Microsoft Excel Version) (74KB)
Statement of Net Annual Value (54KB)

NAV expenses

For an expense to be deductible from NAV income derived in Singapore, the expenses must be incurred:

  • Solely for the purpose of producing the NAV income; AND
  • During the period of tenancy.

 

 Type of Expense Claimable Expenses Non Claimable Expenses
Housing loans

Interest paid on the loan or mortgage taken to purchase the property which is occupied

1. Repayments of the principal loan or mortgage amount (monthly instalments)

2. Penalty imposed by banks for late repayment of loans 

Property tax Incurred during the occupancy period

1. Incurred outside the occupancy period

2. Penalty imposed

Fire Insurance Premiums paid on fire insurance Capital sum assured on property
Repairs Repairs done to restore the property to its original state

1. Initial repairs

2. Repairs done which results in improvement/additions and alterations

3. Repairs incurred outside occupancy period

Maintenance Cost of maintaining the property (eg. painting, pest control, and monthly maintenance charges to management corporations) Cost of renovation, additions, alterations to the property (eg. extension of car porch, construction of drains, cementing of walls and floors, installation of window grille)
Furniture and Fittings

1, Replacements of furnishings (e.g. furniture, fixtures, electrical appliances) to its original state

2. Hiring of furniture

1. Depreciation of furnishings (e.g furniture, fixtures, electrical appliances)

2. New/Improvements/Additions made to furnishings (e.g. furniture, fixtures, electrical appliances)


How to report NAV

You have to declare the annual value of your property in the previous year, and details of deductible expenses of each property under 'Rent and other income from properties' in your tax form.

For jointly owned property

All owners of the property have to give details of the annual value, and deductible expenses before showing each of their share of NAV.

NAV has to be reported based on the share of ownership of the property and cannot be reported solely under 1 owner’s name.

NAV deficits

If your NAV from property is less than your deductible expenses, you still have to declare the annual value, and the details of deductible expenses in your tax form. Such deficits on NAV will not be taxed.

NAV deficits

If your NAV from property is less than your deductible expenses, you cannot offset  such NAV deficits against any other income you may have in that year, or any other years.

Similarly, you cannot offset your loss in one year against your NAV in any other years.

The amount of NAV deficit of one property can only offset against the positive NAV of another property (if they relate to the same calendar year). You will only be taxed on the net gain from these two properties.

You cannot carry forward the previous year's NAV deficits against the current year's positive NAV.

Example


Property
Positive NAV/(NAV deficit) in the year 2010
A $30,000
B ($10,000)

Positive NAV from property A $30,000
Less: NAV deficit from property B $10,000
Taxable net NAV $20,000

You will be taxed on the net gain of $20,000 from these two properties.

 

Transfer of NAV deficits between spouses

A married couple can transfer their NAV deficits between each other.

You can only offset the amount of NAV deficit transferred against your spouse's taxable NAV income.

The amount of NAV deficits transferred is limited to the positive NAV of your spouse.

Example


Husband's taxable NAV income in 2008 $1,000
Wife's NAV deficit in 2008 $1,500

The wife can transfer $1,000 of her NAV deficit to be offset against husband's NAV income.

How to make transfer

An election has to be made by both spouses in writing on a year to year basis, giving their names, identification numbers and signatures.

The election can be made at any time, including the time when you submit your income tax form. However, the election cannot be made after 30 days from the time you or spouse receive the Notice of Assessment, whichever is the later. Once made, the election is irrevocable.

We will re-compute both you and your spouse's assessment to take into account the respective transfers. Any subsequent revision to either party's tax assessment will result in a corresponding revision to the other party's tax assessment.



 

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Last Updated on 22 November 2013


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