Andy December 02 2021

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HDB flat owners to pay more property tax next year

The Inland Revenue Authority of Singapore (IRAS) announced that it will raise the annual values of HDB flats by 4% to 6%, due to the strong rental markets.

The revision in annual properties values to compute the property tax payable will take effect on 1 Jan 2022.

This is the first time since 2017 that the annual values of HDB flats have increased. 

The annual value is the estimated rent that could be collected annually if the housing property were to be rented out, and it is determined based on the market rate of comparable residential properties.

The property tax payable is derived by multiplying the property tax rate with the annual value of the house.

All one-room and two-room owner-occupiers as well as 35% of three-room owner-occupiers will not need to pay property tax.

However about 65% of owners staying in 3-room flats will each pay between S$8 and S$14 more in property tax annually, according to IRAS.

Owner-occupiers of 4-room, 5-room and executive flats will each pay between S$21 and S$26 more each year. 

The increase in property tax is manageable as it is not more than $2.50 a month.

Some Singaporeans who are savvy property investors will opt to stay in private residential condos while renting out their entire HDB flat for steady rental income with a rental yield as high as 14%. 

Owner-occupiers enjoy concessionary property tax rates ranging from 0% to 16%, while the property tax rates for those who rent out their flats range between 10% and 20%. 

You will receive your property tax bills by the end of December.

IRAS will send SMS reminder to inform you to pay your 2022 property tax by 31 Jan 2022. 

Apart from one-time full payment, you may choose the 12 months interest-free instalments with GIRO. 

Question: I own two residential properties in Singapore and it is not leased out. Can I enjoy owner-occupier tax rates for both houses?

Answer: No. The owner-occupier tax rate is only granted to one residential property owned and occupied by you. For subsequent properties, you will be taxed at non-owner-occupier residential tax rates even if you are occupying it as your second home.