Rebate for owner-occupied flats to mitigate property tax rise

All one- and two-room owner-occupiers of HDB flats will continue to pay zero property tax in 2012, while those in three-room flats will on average pay roughly the same tax as last year.

Four- to five-room flats will pay S$5 to S$29 more for the year.

This comes after the Annual Values (AV) of HDB flats are revised upwards with effect from 1 January 2012 to reflect the rise in market values.

To mitigate the increase in the property tax payable by lower- and middle-income households as a result of the AV revision, the government will give a one-off rebate of S$55 to owner-occupied HDB flats.

This will enable three-room flat owners to see little change in property tax payable despite higher flat values. It will also reduce the increase in tax payable for four- and five-room flat owners.

94% of all HDB flat owners would receive the rebate.

The Inland Revenue Authority of Singapore (IRAS) reviews the AVs of all properties including HDB flats annually.

The AV is used as a basis to compute the property tax payable. Property tax is calculated at 10% of the AV for non-owner-occupied homes.

For owner-occupied homes, property tax payable is calculated at concessionary tax rates depending on the AVs of the residential properties.

The AVs of all HDB flats were last revised on 1 January 2010, taking into account the changes in market rents in 2009. They were not revised in 2011 as the increase in HDB market rents in the preceding year was small.

Taking 2010 and 2011 together, market rents have risen by around 20%-28%. Accordingly, the AVs of all HDB flats will be revised from 1 January 2012.

Source : Channel NewsAsia – 2 Dec 2011

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