Property Tax Remission for Building a Residential Landed Property in Singapore

The above illustration shows the journey of a property owner whose house is being demolished and rebuilt for subsequent owner-occupation. 

Owners of residential property who demolish their houses in order to build a new house can expect an increase in property tax due to:

1. An increase in the Annual Value (AV): The AV is determined at 5% of the estimated freehold market value of the land upon demolition. Generally, the AV of a land is higher than the AV of a house.

2. An increase in the tax rates: The tax payable is computed based on non-residential tax rate of 10%.

Owners will receive a Valuation Notice reflecting the latest property tax computation.

Owners may apply for a remission of property tax of up to 2 years under the Property Tax (Replacement Owner-Occupied House under Construction) (Remission) Order 2013. If the owners qualify for this remission, they will continue to enjoy owner-occupier tax rates on the property during the construction period.

Owners enjoying the existing remission need not take any action and will continue to enjoy the remission under the new order.

Eligibility Conditions for Remission

1. The land is not occupied;
2. No rent or fee is charged or received for the occupation or use of the land or any part thereof;
3. The owner or owner's spouse is not enjoying the owner-occupier concession on another property during the remission period*; and
4. The replacement house is owner-occupied for at least 1 year following the Temporary Occupation Permit (TOP) date or the Certificate of Statutory Completion (CSC) from the Building Authority.

_{^* If the owner or his/her spouse are enjoying the owner-occupier tax rates on another property during the same period, he/she can inform IRAS to withdraw the owner-occupier tax rates on that property to be eligible for this remission.}

Period of Remission

The period of remission is for a maximum period of 2 years from the date of land assessment or the date of submission of building plans to the Building Authority, whichever is later; to the date of issue of the TOP date or CSC for the replacement house, whichever is earlier.

Applying for Remission

To apply, you need to submit an online written undertaking not later than 30 days after the TOP date or CSC of the replacement house.

Withdrawal of Remission

Owners who are unable to fulfill the remission conditions will have the remission withdrawn and must pay the tax difference. IRAS will notify owners of the amount of taxes payable. This tax difference amount may be subject to an additional 5% charge at the discretion of the Comptroller of Property Tax. 

Effective 1 Jan 2014, a land parcel under construction for a single house intended for owner-occupation can be taxed at owner-occupier tax rates for the period under construction, for a maximum period of 2 years.

Eligibility Conditions for Remission

1. The land is not occupied;
2. No rent or fee is charged or received for the occupation or use of the land or any part thereof;
3. The owner or spouse is not enjoying the owner-occupier tax rates on another property during the remission period*; and
4. The replacement house is owner-occupied for at least 1 year following the Temporary Occupation Permit (TOP) date or the Certificate of Statutory Completion (CSC) from the Building Authority.
5. The Annual Value (AV) of the land parcel is less than $108,625.

_{^* If the owner or his/her spouse are enjoying the owner-occupier tax rates on another property during the same period, he/she can inform IRAS to withdraw the owner-occupier tax rates on that property to be eligible for this remission.}

Period of Remission

The period of remission is for a maximum period of 2 years from the date of submission of building plans to the Building Authority to the date of issue of the TOP date or CSC for the replacement house, whichever is earlier.

Applying for Remission

To apply, you need to submit an online written undertaking not later than 30 days after the TOP date or CSC of the replacement house.

Withdrawal of Remission

Owners who are unable to fulfill the remission conditions will have the remission withdrawn and must pay the tax difference. IRAS will notify owners of the amount of taxes payable. This tax difference amount may be subject to an additional 5% charge at the discretion of the Comptroller of Property Tax. 

If the property has obtained TOP, please let us have the following: 
(a) A copy of Temporary Occupation Permit (TOP)/Certificate of Statutory Completion (CSC), whichever is earlier (Please indicate if it is a direct CSC)
(b) Site area of the land plot
(c) Gross floor area of the property
(d) A copy of the constructed floor plans in A4 size (please ensure that the floor plans are clear and the wordings in the plans are of readable font size.)

IRAS will review the assessment on the new building after receiving the required information and the owner-occupier tax rates will be granted once the assessment on the new building is finalised. You may also request your architect to submit the relevant information to us directly.

No, the remission is only applicable if you construct 1 house and live in it.

It is not advisable for you to apply for the remission because you will not enjoy tax savings under this scheme due to the progressive owner-occupier tax rates (OOTR), for AV of the land above $108,625, the effective tax rates under the OOTR is higher than the flat 10% tax rate for non-residential properties and vacant land. Please refer to the below example for a better understanding on how the tax amount is derived. 

Example 1: Detailed Tax Computation for Annual Value of Land at $360,000

Upon the application of remission under scenario 2, the property tax payable has increased by $53,420 annually.

If the owner-occupier tax rates (OOTR) are currently applied to your property, you will continue to enjoy this concession on the assumption that you intend to live in the property after A&A or reconstruction works are done. If the property is not intended for your occupation, please inform IRAS.