Government Offers One Time Property Tax Rebate Owner Occupiers
The government has recently announced a property tax rebate for owner-occupied HDB flats and private residential properties in 2025. This one-time rebate will be 20% for HDB flats and 15% for private residential properties, with a cap of $1,000 for the latter.
Property tax is calculated based on a property’s annual value, which is the estimated rental income it could generate in a year. The government will be raising all annual value bands of owner-occupied residential property tax rates on January 1, 2024 as part of Budget 2024.
In light of these changes, the government expects that over 90% of private residential property owners and all HDB flat owners will see a reduction in their property taxes next year. This move is aimed at alleviating the cost-of-living concerns among Singaporeans.
According to Lee Sze Teck, senior director of data analytics at Huttons Asia, the annual value of private properties is expected to remain stagnant this year, with minimal growth in private residential rents. However, HDB rents are projected to increase by 4%, leading to a rise in the annual value of HDB flats.
Lee believes that the one-time property tax rebate will provide some relief to HDB owners who may be affected by the increase in annual value. For instance, if a HDB flat with an annual value of $30,000 would have a property tax of $720 in 2025, with no change in AV. However, with the rebate, the owner will only have to pay $576, resulting in a savings of $144.
Similarly, private property owners may also benefit from the one-time rebate. For example, a property with an annual value of $85,000 would have a property tax of $5,760 in 2025. With the 15% rebate, capped at $1,000, the owner will only have to pay $4,896, saving $864.
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However, Lee emphasizes that property tax rebates have been offered in the past and do not diminish the appeal of investing in residential properties in Singapore. The potential for capital appreciation far outweighs the increase in property tax, making residential property investment still attractive.
Overall, the revised property taxes in Budget 2024 will benefit owner-occupied properties with lower annual values. The government’s aim is to support Singaporeans and ease their financial burden, while also maintaining the appeal of investing in residential properties in Singapore.