12 Jan 2009

We refer to the letter, "Property prices down but not property taxes" (1 Jan 2009) by Mr David Goh who asked why IRAS did not reduce the property tax on residential properties for 2009, when rentals are expected to come down in 2009. We would like to clarify that Annual Values (AVs) of properties are not based on projections of market rentals, but on prevailing market rentals for similar properties in the same locality.

IRAS reviews the AVs of properties annually. The property tax payable in 2009 is based on AVs of private residential properties at the time they were last reassessed, which was in 2008. IRAS is aware that rentals are now on a falling trend, and will monitor the situation closely. We will expedite next AV assessments this year, and revise the AVs downwards if rentals drop below the existing AVs.

A number of property tax reliefs are currently available to owners who live in their homes. Their properties are taxed at the concessionary rate of 4%, while let-out properties are taxed at 10%. The owners will also receive an annual rebate of up to $100 or the actual tax payable (whichever is lower) for 2008 and 2009, that was announced in 2007. For owner-occupied properties with AVs below $10,000, owners will also enjoy the on-going property tax rebates of $25 to $150 before the annual rebate.

The Government is also looking into various measures to help households cope with the economic downturn.

We thank Mr Goh for his feedback.

Yvonne Yim (Ms)
Principal Corporate Communications Officer
Inland Revenue Authority of Singapore