1. Before the Transfer of Property
A) Make a legal requisition on the property
Once the property is transferred to you, you will be liable for any outstanding property tax including arrears that should have been paid by the previous owner. Thus, it is important for your lawyer to make a legal requisition to check on any outstanding property tax.
For newly constructed properties, IRAS will bill you for the property tax that starts from the date of temporary occupation permit (TOP) within 1 year of TOP.
B) Apportion property tax between you and the seller
If there is an outstanding tax amount, your HDB officer or lawyer will assist you to settle the outstanding amount with the seller. Your HDB officer or lawyer will also apportion the current year tax between the seller and yourself. IRAS does not apportion property tax liabilities between the parties.
C) File a Notice of Transfer to IRAS
The seller's lawyer will file a Notice of Transfer to IRAS within 1 month of the sale or property transfer .
For correspondence and payment, IRAS communicates with the owner who is listed first in the Notice of Transfer filed by the seller's lawyer . If there is a preference among owners on who IRAS should correspond with, please inform your lawyer. Your lawyer will then liaise with the seller's lawyer to ensure the Notice of Transfer is filed correctly.
2. After the Transfer of Property
Once the Notice of Transfer has been processed by IRAS, the record of ownership will be updated for property tax purposes.
A) Update your address
IRAS sends the property tax bill or notice to:
- The address listed on your identity card; or
- The corporate owner's registered office address listed in the Accounting and Corporate Regulatory Authority (ACRA) records.
To receive all your correspondence promptly, please ensure that your address is updated. Please see change mailing address if you need to update your address.
B) Receive Acknowledgement Notice on Transfer of Property
IRAS will issue an Acknowledgement Notice to inform you about the updated record of ownership.
If there is any outstanding tax for your property, please arrange for payment to be made.
C) Calculate your Property Tax
To calculate the annual property tax payable, multiply the Annual Value (AV) of the property with the set of Property Tax Rates that applies to you. The current tax rate is 10% per year regardless of whether the property is let, vacant or for own use. You can use this calculator to calculate your tax payable.
D) Arrange to pay your Property Tax
Payment of property tax must be made within 1 month from the date of Acknowledgement Notice. You are encouraged to pay your property tax by GIRO to enjoy up to 12 interest-free monthly instalments.
Alternatively, you can opt for one-time GIRO deductions or use any of the modes of payment available to pay your property tax.
3. Other Taxes Relating to Property
A) 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 on your behalf in purchasing the property will arrange for payment of Stamp Duty.
B) Good and Services Tax (GST)
You are required to pay GST on purchases of non-residential properties if the seller is GST-registered. Find out more on GST chargeability and GST input tax claims on properties.
C) Income Tax from Rental
If you partially or fully rent out your property, your rental income is subject to income tax. Find out more on Income from property rented out. More information for corporate owners.
How do I inform IRAS after I have purchased a property?
Generally, the seller or transferor's lawyer will file a Notice of Transfer to IRAS within 1 month of the sale or property transfer . If the ownership records have not been updated, please check with your lawyer if the notice of transfer has been filed to IRAS.
I have bought new industrial property and my date of tax liability is 5 Nov. Why has IRAS taxed me from date of Temporary Occupation Permit (TOP) i.e. 8 Aug?
Newly completed properties are taxed from the TOP date. Under the law, property tax is a charge on the property. Hence, the current owners need to pay any outstanding tax including any amount payable prior to the date of transfer of the property.
This means that although you only took possession of the property on 5 Nov (date of tax liability), you are liable for the property tax for the period with effect from 8 Aug, the date of TOP.
Your lawyer would usually assist you in seeking the reimbursement of property tax from the developer. Please liaise with your lawyer for the reimbursement of tax (i.e. 8 Aug to 4 Nov) from the developer, if this has not been done.