Understanding Property Tax in Singapore: A Comprehensive Guide
Property tax is an essential aspect of property ownership in Singapore, impacting homeowners, investors, and businesses. This article aims to provide a detailed overview of property tax in Singapore, including its purpose, calculation, and the differences between owner-occupied, non-owner-occupied, and non-residential property tax rates.
What is Property Tax?
Property tax is a wealth tax levied by the Singapore government on property owners. The revenue collected from property taxes is used to fund public services and infrastructure projects, contributing to the overall development and maintenance of the country. Property tax is applicable to both residential and non-residential properties.
Types of Property Tax
- Owner-Occupied Property Tax: This tax applies to properties that are occupied by the owner.
- Non-Owner-Occupied Property Tax: This tax applies to properties that are rented out or left vacant.
- Non-Residential Property Tax: This tax applies to commercial and industrial properties.
How is Property Tax Calculated?
Property tax in Singapore is calculated based on the annual value (AV) of the property. The AV is an estimate of the gross annual rent that the property could fetch if it were rented out, excluding the cost of furniture, furnishings, and maintenance fees. The Inland Revenue Authority of Singapore (IRAS) determines the AV, which is reviewed annually.
“You can check the AV of your property using IRAS ‘View Property Dashboard’ digital service. All AVs shown are as at current date”
Property Tax Rates
Here’s a comparison of the tax rates for owner-occupied, non-owner-occupied, and non-residential properties:
| Annual Value (AV) | Owner-Occupied Rate | Non-Owner-Occupied Rate | Non-Residential Rate |
| First $8,000 | 0% | 10% | 10% |
| Next $47,000 | 4% | 12% | 10% |
| Next $15,000 | 6% | 14% | 10% |
| Next $15,000 | 8% | 16% | 10% |
| Next $15,000 | 10% | 18% | 10% |
| Next $15,000 | 12% | 20% | 10% |
| Next $15,000 | 14% | 20% | 10% |
| Above $130,000 | 16% | 20% | 10% |
Detailed Breakdown
Owner-Occupied Property Tax Rates
Owner-occupied residential properties benefit from a progressive tax rate structure. The first $8,000 of the AV is not taxed, making it advantageous for homeowners. The tax rates then increase progressively, capping at 16% for properties with an AV above $130,000.
“If you partially-let out your home while you continue to live in it, your residential property remains eligible for the owner-occupier tax rates”
Example: For a property with an AV of $60,000:
- First $8,000 at 0% = $0
- Next $47,000 at 4% = $1,880
- Remaining $5,000 at 6% = $300
- Total Property Tax = $2,180
Non-Owner-Occupied Property Tax Rates
Non-owner-occupied residential properties, including rental and vacant properties, are subject to higher tax rates compared to owner-occupied properties. This is designed to encourage the efficient use of housing stock and reduce speculation in the property market.
Example: For a property with an AV of $60,000:
- First $30,000 at 10% = $3,000
- Next $15,000 at 12% = $1,800
- Remaining $15,000 at 14% = $2,100
- Total Property Tax = $6,900
Non-Residential Property Tax Rates
Non-residential properties, such as commercial and industrial properties, are taxed at a flat rate of 10% on the AV. This simpler structure ensures predictability for businesses and commercial property owners.
Example: For a commercial property with an AV of $60,000:
Total Property Tax = $60,000 * 10% = $6,000
Exemptions and Concessions
Certain properties may qualify for tax exemptions or concessions. Properties used for charitable, religious, or educational purposes, for instance, may be exempt from property tax. Additionally, there are concessions for residential properties under specific public schemes.
Conclusion
Timely payment of property tax is important to avoid penalties and legal action. Understanding property tax rates is also crucial for all property owners in Singapore to better understand the actual cost of property ownership.
In our following articles, we will touch on other cost of property ownership such as interest rate, renovation, repair and maintenance etc.
