Property tax reliefs are a common means for Singapore to ease the tax burden on property owners
Singapore has several property tax reliefs, with different levels of benefit available depending on the characteristics of the taxpayer.
Mr Paul Ho, chief officer at iCompareLoan, said: “The most common among the property tax reliefs is the one provided for individual or married couple who owns and lives in their residential property in the form of owner-occupier tax rates.”
“The policy intent of owner-occupier tax rates is to encourage home ownership in Singapore. They are only applicable if owners are residing in their residential property,” he added.
The owner-occupier tax rates are progressive tax rates based on the annual value of your property. This means residential properties of higher annual value are taxed at higher rates while most owner-occupied properties (including all HDB flats) will continue to enjoy lower tax rates.
| 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 |
The owner-occupier tax rates can only be applied to one home owned and occupied by an individual or a married couple. Even if a married couple were to occupy two homes, the owner-occupier tax rates can only apply to one of the homes. This is regardless of whether it is owned jointly or separately by the spouses.
If you are an individual owner whose house is being demolished and rebuilt for subsequent owner-occupation, you can apply for Building Land Remission, which is another form of property tax relief.
The Building Land Remission is Property Tax Remission for rebuilding an owner-occupied house. It is meant for the owner of residential property who demolish the house in order to build a new house for owner-occupation.
Owners of residential property who demolish their houses in order to build a new house may apply for a remission of property tax of up to two years under the Property Tax (Replacement Owner-Occupied House under Construction) (Remission) Order 2013.
Owners who qualify for this remission will continue to enjoy owner-occupier tax rates on the property during the construction period. Owners enjoying the existing remission need not take any action and will continue to enjoy the remission under the new order.
There are certain conditions for property owners to enjoy this property tax relief. They have to ensure that:
- The land is not occupied;
- No rent or fee is charged or received for the occupation or use of the land or any part thereof;
- The owner or owner’s spouse is not enjoying the owner-occupier concession on another property during the remission period*; and
- The replacement house is owner-occupied for at least one year following the Temporary Occupation Permit (TOP) date or the Certificate of Statutory Completion (CSC) from the Building Authority.
If the owner or his/her spouse are enjoying the owner-occupier tax rates on another property during the same period, he/she can inform Inland Revenue Authority of Singapore (IRAS) to withdraw the owner-occupier tax rates on that property to be eligible for this remission.
The period of remission is for a maximum period of two years from the date of land assessment or the date of submission of building plans to the Building Authority, whichever is later; to the date of issue of the TOP date or CSC for the replacement house, whichever is earlier.
To apply for this property tax relief, owners have to submit a written undertaking not later than 30 days after the TOP date or CSC of the replacement house.
Owners who are unable to fulfill the remission conditions will have the remission withdrawn and must pay the tax difference. IRAS will notify owners of the amount of taxes payable. This tax difference amount may be subject to an additional 5% charge at the discretion of the Comptroller of Property Tax.
If you are an individual owner who bought a piece of land to construct your house for subsequent owner-occupation, you can apply for Vacant Land Remission scheme, which is another property tax relief programme. The scheme which came into effect in Jan 2014, specifies that a land parcel under construction for a single house intended for owner-occupation can be taxed at owner-occupier tax rates for the period under construction, for a maximum period of two years.
To qualify for this property tax relief, owners have to ensure that:
- The land is not occupied;
- No rent or fee is charged or received for the occupation or use of the land or any part thereof;
- The owner or spouse is not enjoying the owner-occupier tax rates on another property during the remission period*; and
- The replacement house is owner-occupied for at least one year following the Temporary Occupation Permit (TOP) date or the Certificate of Statutory Completion (CSC) from the Building Authority.
- The Annual Value (AV) of the land parcel is less than $190,000.
If the owner or his/her spouse are enjoying the owner-occupier tax rates on another property during the same period, he/she can inform IRAS to withdraw the owner-occupier tax rates on that property to be eligible for this remission.
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