Chief Editor February 17 2024

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Singapore's Budget 2024 Property Tax Reforms: Easing the Burden on Homeowners

Singapore's property market is set to undergo a significant change in the realm of property tax as the government takes steps to alleviate the burden on owner-occupied properties, particularly in the mid-tier categories. Deputy Prime Minister and Finance Minister Lawrence Wong recently announced in his Budget 2024 speech that the annual value (AV) bands would be raised, leading to a reduction in property taxes for many homeowners. This move reflects the government's acknowledgment of the unintended consequences of a surge in rental values, resulting in an unexpected increase in property tax collections.

AV Band Adjustments:

Effective from January 1, 2025, the AV bands will undergo adjustments, benefiting a considerable portion of owner-occupied properties. The lowest AV band where the property tax rate is 0 per cent, threshold will be raised from S$8,000 to S$12,000, while the highest 32 per cent band threshold will increase from over S$100,000 to over S$140,000. These revisions do not alter the tax rates but widen the bands at both ends of AV distributions. Homeowners can anticipate paying the same or lower property taxes at each band, assuming no change in their AVs and before any rebate.

Understanding Property Taxes in Singapore:

Property taxes in Singapore are calculated based on AVs, which are derived from the estimated yearly rent if a property were rented out. Owner-occupied homes, where the owner resides in the property, enjoy lower tax rates. The government originally expected these changes to impact the top 7% of owner-occupied residential properties, but the AV increases affected nearly 13% of such properties.

Impact on Retirees:

Recognizing potential cash flow issues for retirees residing in higher-end residential homes, the Inland Revenue Authority of Singapore will offer a 24-month installment plan without interest. This measure aims to assist those facing financial challenges due to property tax changes and other factors affecting the property market.

Addressing Unintended Consequences:

The adjustment in AV bands indicates the government's awareness of the unintended impact caused by the surge in rental values.

Rent for certain Housing and Development Board (HDB) flats experienced an increase exceeding 50%, even in non-mature areas like Woodlands and Sengkang. During the period between the first quarter of 2021 and the second quarter of 2023, the non-landed private rental index by the Urban Redevelopment Authority (URA) also recorded a notable rise of 45%.

The unexpected increase in property tax collections affected many people, particularly those who did not benefit from the rental hike and felt unfairly penalized. By widening the AV bands, the government is taking a step towards rectifying this situation and ensuring a fairer distribution of the property tax burden.

No Reduction for Investment Properties:

It's crucial to note that these reforms do not translate into a reduction in property tax rates for investment properties. While the changes are beneficial for owner-occupied homes, property investors who lease out their residential properties will not experience a decrease in their tax obligations.


Singapore's property tax reforms, particularly the adjustment of AV bands, demonstrate the government's commitment to addressing the unintended consequences of market fluctuations. By providing relief to a significant portion of owner-occupied properties, the government aims to strike a balance in the property tax landscape, ensuring fairness and mitigating the impact on residents. As the property market continues to evolve, these measures reflect a proactive approach to maintaining a stable and equitable real estate environment in Singapore.