If you are a property owner, then you should already be paying property taxes. If you are renting, then your landlord is using the rental proceeds to cover their property tax payments. The reality is, at some point in your life, you will end up paying property taxes – whether directly or indirectly.
With that being the case, it is important you understand how these taxes are calculated. And the answer begins and ends with a property’s annual value. Understanding how annual values are derived and where you can check (and possibly dispute) yours is crucial if you aspire to someday be a property owner – or already are one.
That’s exactly what we will cover in this article. On top of that, we will also briefly touch on a couple of other ways the government uses annual values – ways that involve you potentially receiving money instead of paying it.
Property Value Singapore: An Overview
| What does annual value mean? | It is the estimated gross annual rent that you can rent your property out for (excluding furniture, furnishings, and maintenance fees) |
| How to check the annual value of a property? | Log in with your SingPass via the IRAS website |
| How does IRAS calculate the annual value of a property? | IRAS’s five considerations for determining annual value: – Rentals of similar properties in the area – Property size – Property location – Property condition – Other relevant physical attributes |
| How to calculate the annual value of your property on your own? | You can make an estimate based on the property rentals around your area |
Annual Value of Property and Its Tax Implications
A common misconception is that property value in Singapore is somehow directly tied to valuation. Those are in fact two different things. Property annual value, as defined by the IRAS, is the “estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees.”
That’s a simple and straightforward definition. But the keyword here is “estimated”. The government doesn’t care about the actual rental income you may be receiving. It only cares about what the market thinks.
This means that if you rent out your (unfurnished) property at a rate far below the market price, your annual value would still be the same as comparable properties – and you would have to pay the same property tax.
You can find the relevant property tax rates here, which are expressed as a percentage of annual value. Keep in mind that property taxes on non-owner-occupied properties are significantly higher than owner-occupied ones. This applies to HDB flats as well as private properties.
Property Value Singapore: How to Check
As the IRAS is the final arbiter on what your property’s annual value is, they are also the place to refer to for looking it up. To check your property’s annual value, log in to myTax Portal using your SingPass. You can look up the annual value for the current year and the past five years anytime you wish.
However, you are not limited to just your own property’s annual value. Annual values can help give you a “gauge” of an area’s rental rates, which may be useful in making renting or purchasing decisions. The above portal also lets you pull up the annual value of other properties – but for a $2.50 fee per search.
That said, you can find broad statistics on annual values for free online. And these statistics reveal a huge discrepancy between private properties and HDBs.
Annual Value of Property: Owner-occupier Tax Rates
The higher your annual value, the more you would have to fork out in taxes. But the good news is that for the average HDB-dwelling Singaporean, this amount is fairly low.
To make things simple, IRA has a full breakdown of the property tax payable, depending on your annual value, for owner-occupied residential properties. This applies to HDB flats, condominiums, or any other residential properties where the owner is residing in the property.
| Annual value for owner-occupied residential properties | Property tax rate effective 1 January 2023 | Property tax rate effective 1 January 2024 |
| First $8,000 | 0% | 0% |
| Next $22,000 | 4% | 4% |
| Next $10,000 | 5% | 6% |
| Next $15,000 | 7% | 10% |
| Next $15,000 | 10% | 14% |
| Next $15,000 | 14% | 20% |
| Next $15,000 | 18% | 26% |
| Above $100,000 | 23% | 32% |
For non-occupied properties, the property tax rate is slightly different.
| Annual value for non-owner-occupied residential properties | Property tax rate effective 1 January 2023 | Property tax rate effective 1 January 2024 |
| First $30,000 | 11% | 12% |
| Next $15,000 | 16% | 20% |
| Next $15,000 | 21% | 28% |
| Above $60,000 | 27% | 36% |
As you can see, property taxes can become a significant expense, especially if you are not occupying the unit. So, what happens if you disagree with the government’s assessment of your annual value?
Annual Value of Property: How to Calculate on Your Own
While data for rentals for similar properties in an area are easy to find, where it gets tricky is in estimating the allowance for furniture, furnishings, and maintenance fees.
So, let’s say that using PropertyGuru, you discover that comparable rentals for your unit are about $3,000. You think that a reasonable allowance for furniture, furnishings, and maintenance is $1,000 a month, for an annual value of $24,000. The IRAS disagrees and duly informs you that your annual value is $30,000, meaning their allowance estimate was $500 a month.
If you wish to dispute their estimate (and pay less in taxes), you can head over to the myTax portal and electronically file an objection. Make sure you include the Notice Number stated in your latest property tax notice.
Note that while the first objection is free, if it is unsuccessful and you wish to further appeal to the Valuation Review Board, it will cost you $50 (owner-occupied) or $200 (non-owner-occupied) each time. While possible, it is likely that only commercial or industrial property owners will bother filing such appeals.
Other Uses of Property Annual Value (That Don’t Involve Paying Money)
The most obvious implication of your property’s annual value is your property taxes. But as we mentioned in the intro, there’s more to it than that. You see, the government also uses annual values as a gauge of your financial position, meaning that several incentives are tied to this number. We will briefly talk about two of them below.
GST Voucher Scheme
The first one is for the GST Voucher Scheme. Citizens with annual values of $34,000 and above are automatically ineligible to receive GST Vouchers.
Annual Value: A Diverse Metric You Should Keep Track Of
As you have seen, your property’s annual value is an important metric you should always keep track of. Especially if you plan to be a landlord, property taxes are an expense you must factor into your investment decision. Further, annual value can also determine whether you qualify for certain government benefits. Bottom line: make sure if someone on the street stops you and asks what your annual value is, you can rattle it off immediately.
For more property news, content and resources, check out PropertyGuru’s guides section.
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This article was written by Ian Lee, an ex-banker turned financial writer who hopes to use his financial background and writing skills to help raise people’s financial literacy levels – a necessity in our modern world”
