Property tax

In Budget 2022, the property tax rates for residential properties were increased. This is consistent with the Government’s continued efforts over the past few years in ensuring progressivity in the tax system, whereby those residing in higher-value properties are asked to pay more taxes. Property tax rebates were provided to help cushion the impact. Due to a sharp increase in market rents over the last two years, the rate increases led to higher than expected property tax collections.

Property owners may now heave a sigh of relief as the Government has proposed to refine the policy by widening the annual values (AV) bands (refer to the table below) from 1 January 2025 for owner-occupied residential properties in light of these market movements. The change is expected to result in the same or a reduction in property tax bills for homeowners, assuming no change to their property AVs.

The Government has also extended the interest-free GIRO instalment plan of 24 months for retiree homeowners¹ for property tax payments. This could benefit homeowners with cash flow needs who are residing in higher-end residential homes. While this would usually be received positively, the effect may be muted for homeowners who are asset rich and cash poor. Perhaps this explains the Government’s proposals on Additional Buyer’s Stamp Duty changes for single seniors to right-size their properties!

_{1 The conditions are as follows:
(i) Property owners are aged 65 and above;
(ii) The applicant must owner-occupy the residential property (i.e. live in the property they own); and
(iii) The applicant’s assessable income must not exceed $34,000 (based on the latest tax assessment available).}