Market rental values have increased significantly, it says
THE Inland Revenue Authority of Singapore (IRAS) is raising annual values (AVs) for all Housing & Development Board (HDB) flat types for the first time in about four years, to reflect the 'significant increase in their market rental values'.
From Jan 1, 2008, the average AVs will go up between 18 and 25 per cent, with the biggest hike for three-room flats.
IRAS' spokeswoman noted that IRAS regularly reviews AVs of properties in Singapore to reflect their prevailing rental values.
'In the case of HDB flats, however, AVs had not been increased since 2004 as they had been supportable by actual rental evidence. The AVs of most private residential properties have already been re-assessed to reflect the current market rental levels during the year,' she added.
In a joint statement with the Ministry of Finance, IRAS yesterday said it will be revising upwards the AVs of most properties, including HDB flats.
Generally, HDB flats in more centralised and popular areas like Bishan, Bukit Merah and Marine Parade would have higher AV increases, compared with other areas, the statement added.
The property tax rate in Singapore is set at 10 per cent of a property's AV, although owner-occupied residential properties enjoy a concessionary 4 per cent tax rate.
Island-wide, the average AV hike in percentage terms for the various HDB flat types are: 20 per cent for one-room and two-room flats, 25 per cent for three-room flats, 18 per cent for four-room flats, 20 per cent for five-room flats, and 18 per cent for executive flats.
However, the increase in AVs for owner-occupied HDB flats does not translate to a proportionate increase in property tax actually payable, due to the property tax rebates granted by the Government, including those announced as part of the GST Offset Package in Budget 2007.
As a result, 90 per cent of all HDB flat owners will not pay more property tax in 2008 even after the AVs of their flats go up.
For four-room, five-room and executive flat owners, about 15 per cent will pay a higher property tax but the increase will be less than $40, or about $3 a month.
All HDB flat owners will receive their valuation notices and property tax bills by Jan 1.
'IRAS encourages HDB flat owners to join the Giro scheme as it allows them to enjoy up to 12 interest-free monthly instalments,' the joint statement said.
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