Property tax revenues to increase by S$600 Million in 2024, exceeding the government’s projection of S$380 Million
Singapore’s residential tax revenue is expected to increase by S$600m this year. Non-owner-occupied houses will account for two thirds of that growth.
The increase in property tax is greater than we anticipated when we discussed this issue during Budget 2022. When fully implemented, the increase in property taxes will increase property tax revenues by approximately S$380,000,000 per year.
Property Tax Collection in FY2022 ended on March 2023 was S$5.1 Billion. This is an increase of 9.1 percent from FY2021.
Pritam Singh, leader of the opposition and chief of the Workers’ Party, asked about the property tax collection in 2024 in light the new tax rates that will be applicable to most homeowners.
Property tax revenues were higher than expected, resulting in higher annual values (AVs) and rents both for private and public housing. According to the latest data released by the Urban Redevelopment Authority (URA), rents of private residential properties increased 8.7% year-on-year in the fourth quarter 2023.
Property taxes are calculated using AVs. These are updated annually based upon the estimated annual rental if the property were rented. The condition of the home, its location, age, and market trends are also factors.
Chee said that, as announced in Budget 2020, property taxes on non-owner occupied and high-value owner-occupied residential homes will also rise. This is a wealth tax. The second and last step of the increase took effect on Jan. 1, with tax rates increasing to between 12 and 36%.
The government will look into the possibility of implementing different tax rates for retired people with no income and also help other families that are experiencing a significant increase in their property taxes.
To soften the blow, the government will offer a rebate of up 100 percent for owner-occupied Housing and Development Board apartments and a rebate of 15 per cent for private homeowners. The rebate is capped at S$1,000. If you live in a large house with a high AV, the impact of the property tax rebate will be less significant.