S’pore’s property tax revenue projected to surge by S$600M amid higher home valuations

SINGAPORE: Singapore’s residential property tax revenue is forecasted to soar by approximately S$600 million (US$446 million) for the year 2024 compared to the previous year, revealed Second Minister for Finance Chee Hong Tat on Tuesday (6 Feb).

Addressing parliamentary inquiries by Leader of the Opposition and Workers’ Party chief Pritam Singh, Minister Chee elaborated that the bulk of this increase is attributed to non-owner occupied properties.

Mr Singh sought clarification on the projected additional property tax revenue for 2024, following last November’s announcement of an impending hike in taxes for most homes.

Responding to Mr Singh’s queries, Mr Chee shed light on the variance between the anticipated S$600 million increase and the estimate provided during Budget 2022.

Finance Minister Lawrence Wong had then announced an anticipated uptick of about S$380 million in property tax revenue after a two-step increment in tax rates.

Mr Chee, who also serves as the Transport Minister, elucidated that the higher-than-expected tax collection for 2024 primarily stems from elevated annual property values, driven by increased market rentals for residential properties.

Property tax in Singapore is calculated based on the Annual Value (AV) of the property, which denotes the estimated annual rent.

Mr Chee explained that the Inland Revenue Authority of Singapore (IRAS) references rental transactions for comparable properties in the year while considering factors such as property location, age, land and floor area, renovations, and amenities like swimming pools.

Most owner-occupied residential properties witnessed an AV surge of over 20% for 2024, Mr Chee highlighted, though he underscored that taxes on owner-occupied properties are comparatively lower, and rebates are in place to mitigate the impact for such owners.

In November, the Ministry of Finance (MOF) and IRAS announced a one-off rebate of up to 100% for owner-occupied properties, ranging from 100% for one and two-room Housing Board flats to 15% (capped at S$1,000) for private property owners.

Mr Chee reassured that with the rebate, owner-occupiers of HDB one- and two-room flats continue to be exempt from property tax, while the average increase for owner-occupiers of other HDB flat types is less than S$3 per month.

Additionally, for half of private property owner-occupiers, the increase is less than S$15 per month.

Other Members of Parliament (MP) raised concerns about future property rebates and the impact on retired residents living in private properties.

However, Mr Chee affirmed the government’s willingness to consider future rebates when reviewing such matters.

“We are open to exploring whether there are other ways to help seniors and retirees who are staying in private properties who may need a bit more time to pay for their property taxes by installment,” he added.