Annual Values Of HDB Flats To Rise

Source : The Straits Times, Nov 13, 2007

GET ready to pay more property tax next year. Along with the rise in home prices, the taxman is revising the value of most properties upwards.

However, rebates given to offset the impact of the goods and services tax (GST) hike this year will soften the move's impact.

The annual values of all types of Housing Board (HDB) flats will be raised from Jan 1, said the Inland Revenue Authority of Singapore (Iras) in a statement yesterday. This means property taxes, which amount to 4 per cent of the annual values of owner-occupied homes, will rise.

Asked about private homes, Iras said: 'The annual values of most private residential properties have already been reassessed to reflect the current market rental levels during the year. The average increase for these private residential properties is about 20 per cent.'

Annual values of private residential properties in the central core area have generally increased between 20 per cent and 50 per cent this year.

The annual values will increase by an average of 18 per cent for HDB four-room and executive flats and 20 per cent for one-, two- and five-room flats. Three-room flats will face the greatest increase of 25 per cent.

Most HDB flat owners, however, will not pay higher taxes even after the revision, because of property tax rebates granted earlier this year to offset the impact of the GST hike.

Currently, owners of all one- and two-room flats, as well as 13 per cent of owners of three-room flats, do not pay property taxes because of earlier GST rebates.

The 2007 GST offset package gives all owners who are living in their property an extra $100 rebate annually for next year and 2009.

This means 90 per cent of all owners of HDB flats will not pay more property tax next year. In fact, 60 per cent of three-room flat owners will pay zero property tax, while 40 per cent will pay less tax than now.

About 15 per cent of owners of four- and five-room and executive flats face a hike in tax payable, but not more than $40.

The last time the annual values of HDB flats were raised was in 2004, and that doubled the number of home owners paying property tax. The increase brought in an extra $40 million a year for the Government.