It is December now and as a homeowner, you will receive the Singapore property tax bill very soon. How much do you know about the property tax you have been paying every year? On the other hand, if you are a prospective homeowner and will be purchasing a property in the near future, this article will help you to gain a better understanding of the property tax that you should take into account during budgeting as well.
What Is Property Tax? Who Is Required To Pay Property Tax? When Do I Have To Pay Property Tax? And Where Can I Pay Property Tax?
Property tax is one of the taxes administered and collected by the Inland Revenue Authority Of Singapore (IRAS), the Singapore Government’s principal revenue collection body. It is a tax on ownership of property, and will be imposed regardless of whether the property is occupied or not. This means that if you are a property homeowner or investor in Singapore and no matter whether your property is owner-occupied, tenanted out, or left vacant, it is mandatory to pay your property tax by 31st of January every year. Otherwise, you will be charged a 5% of the unpaid tax as penalty. Payment of property tax can be made via GIRO, AXS, SAM Web at SingPost website or SAM Mobile application, Internet Banking, etc.
Online Property Tax Calculator
This is a quick and simple way to calculate the property tax payable for the year. Easily accessible on IRAS’ website by anyone, online interactive property tax calculators are available for homeowners to compute the amount of property tax he/she has to pay. What’s more, it also integrates the rebates applicable each year for different types of properties. Notice that the online property tax calculator requires input of the Annual Value; to obtain this amount, simply login to your personalised Tax Portal.
In actual fact, all you need is just the property’s address and the owner’s NRIC to check the property tax of any property in Singapore: try it here!
How to Calculate the Property Tax On My Own?
Even if you own the same property, your annual property tax can vary every year. As such, it is important to understand the steps to derive your property tax payable in order to budget well.
The property tax is calculated by multiplying the Annual Value (AV) of your property by the corresponding property tax rate (see table below), which differs depending on the amount of AV.
Property Tax = Annual Value x Property Tax Rate
The AV is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees. It is determined based on estimated market rents of similar or comparable properties.
A. Property Tax for Owner Occupation
| Owner-Occupier Tax Rates | ||
| Annual Value ($) | Effective 1 Jan 2015 | Property Tax Payable |
| First $8,000
Next $47,000 |
0%
4% |
$0
$1,880 |
| First $55,000
Next $15,000 |
–
6% |
$1,880
$900 |
| First $70,000
Next $15,000 |
–
8% |
$2,780
$1,200 |
| First $85,000
Next $15,000 |
–
10% |
$3,980
$1,500 |
| First $100,000
Next $15,000 |
–
12% |
$5,480
$1,800 |
| First $115,000
Next $15,000 |
–
14% |
$7,280
$2,100 |
| First $130,000
Above $130,000 |
–
16% |
$9,380
|
Source: IRAS
Note that the owner-occupier tax rates above can only be applied to a maximum of 1 residential property owned and occupied by an individual or a married couple. If a married couple occupies two properties, the owner-occupier tax rates can only be applied to one of the two properties, but not both.
Without having to specifically send an application to IRAS, for the convenience of homeowners, such owner-occupier tax rates will be automatically applied to the following:
- Buyers of new or resale HDB, DBSS Flats and new Executive Condominiums (EC)
- Singapore Citizen or Singapore Permanent Resident Buyers of Private Residential Property
However, you are required to inform IRAS immediately to avoid any penalty for late or non-notification if you do not intend to live in the property.
If you would like to confirm whether you are currently enjoying the owner-occupier tax rates on your property, you can refer to the tax rate indicator stated in the latest property tax bill sent to you — it should indicate “Owner-Occupier Tax Rates”. Alternatively, you can also check using IRAS’ e-Service: Login here with your SingPass -> Select “Property” -> Select “View Property Portfolio” -> Select the intended property address you wish to check.
In the case that you are residing in your property but it is currently taxed at “Residential Tax Rates”, you can apply for the owner-occupier tax rates using IRAS’ e-Service as well: Login here with your SingPass -> Select “Property” -> Select “Apply for Owner-Occupier Tax Rates”.
You might also want to refer to the following if your situation falls under any of the scenarios below (info extracted from IRAS’ website):
| Scenario 1: Owning More than One Home | If you own a private property or HDB flat (A) and have recently purchased another private property (B), you can apply for the owner-occupier tax rates to be applied to property (B) if you are living in it. The concession on property (A) will be withdrawn from the date you enjoy the owner-occupier tax rates on property (B). |
| Scenario 2: Owning a Property with a Non-Spouse | If you jointly own a residential property (A) and another residential property (B) with another party other than your spouse (e.g. parents, siblings, etc.), you can each apply for concession for each of the properties.
Example: If you occupy residential property (A) and your parents occupy residential property (B), you can apply for the owner-occupier tax rates for property (A). Your parents can apply for the concession for property (B). |
| Scenario 3: Renting Part of Your Home | If you partially let out your home while still living in it, you are still eligible for the owner-occupier tax rates. |
B. Property Tax for Investment Property
If you are the owner who purchase the property, but are not living in the same condominium, HDB flat or any other residential properties, owner-occupier tax rates do not apply.
Instead, the following tax rates will be applied to non-owner occupied properties except for those in the exclusion list (see next section):
| Non-Owner Occupier Tax Rates | ||
| Annual Value ($) | Effective 1 Jan 2015 | Property Tax Payable |
| First $30,000
Next $15,000 |
10%
12% |
$3,000
$1,800 |
| First $45,000
Next $15,000 |
–
14% |
$4,800
$2,100 |
| First $60,000
Next $15,000 |
–
16% |
$6,900
$2,400 |
| First $75,000
Next $15,000 |
–
18% |
$9,300
$2,700 |
| First $90,000
Next $15,000 |
–
20% |
$12,000
|
Source: IRAS
C. Exclusion List
The following is a list of properties excluded from the non-owner occupied residential tax rates. These properties are taxed at 10%, and must have received planning approval for any of the following uses.
- Accommodation facilities within any sports and recreational club
- Chalet
- Child care centre, student care centre, or kindergarten
- Welfare home
- Hospital, hospice, or place for rehabilitation, convalescence, nursing care or similar purposes
- Hotel, backpackers’ hostel, boarding house or guest house
- Serviced apartment
- Staff quarters that are part of any property exempted from tax under s6(6) of the Property Tax Act
- Student’s boarding house or hostel
- Workers’ dormitory
Final Notes
We all know that property purchase involves hefty costs. Therefore, it is of utmost importance to be informed and be aware of all the property-related costs and taxes that will be incurred. With reference to the owner-occupier tax rates table above, even an average owner-occupier home will require more than a thousand dollar ($1,880) of tax payable. With proper planning and budgeting, you can then better manage your finances, and costs like the property tax will not come as a surprise to you at the end of the year.
Find out more about other property-related taxes in Singapore, such as the Stamp Duty here.
