Singapore to Reduce Property Taxes for HDB Flats
SINGAPORE – The Singaporean government has announced a range of property tax and other cost reductions for those living in Housing and Development Board (HDB) flats. Starting January 1, 2015, HDB flat owners of three-, four-, and five-room units will see a three percent reduction in their annual rent. Additionally, owners of one-room and two-room HDB flats will continue to pay no property tax. This will be the second year that the Inland Revenue Authority of Singapore (IRAS) has imposed progressive property tax reductions in order to reflect the cooling down of the property market – a slowdown mainly due to government intervention.
HDB residents in three-, four-, and five-room flats will be able to save between SGD$42 to SGD$54 on their taxes depending on their flat types, compared to 2013. In addition, no tax will be applied on the first SGD$8000 (US$6060) of property taxes for owner-occupied property. For example, for a person residing in a three-room apartment with annual property taxes of SGD$12,000, the resident will pay no tax on the first SGD$8000; for the remaining SGD$4000, this will be liable for a property tax of four percent – which is SGD$160 tax for the year.
HDB residents will be sent their billing and tax notices by the end of December 2014, and must pay their property tax by January 31, 2015. A five percent penalty will be applied to owners failing to make their payments by the end of January 2015. However, taxpayers are able to join an interest-free monthly payment scheme organized by IRAS. Taxpayers can apply for either a one-time or a 12 month deduction payment scheme, called GIRO, using their bank account. Residents applying for the 12-month GIRO installment scheme will have their registered bank account deducted on the fifth day of the month starting in January and ending in December 2015.
Singapore’s rental market has struggled in recent times due to the rise in the supply of units for rent. Due to the Singaporean government’s efforts to cool the market, flat owners who are looking to sell their property have found that they are often not able to find buyers willing to meet their asking price. In response, flat owners are attempting to wait out the downturn in the market by renting out their properties and thus adding to the glut in rental properties available.
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