Source : The Business Times, November 12, 2007
Singapore said on Monday it will raise the annual value of government flats on which property taxes are calculated - a move that may boost inflation seen surging by up to 5 per cent early next year.
A government statement said the increases would take effect on January 1.
Housing makes up 21 per cent of the government's consumer price index, which hit a 12-year high of 2.9 per cent in August despite a minimal increase in the housing component.
Economists estimate that most of the CPI housing segment is from the value of government-built flats, in which over 80 per cent of Singaporeans live. This means inflation figures have not reflected a booming private property market that has seen residential prices soar to their highest in a decade, they say.
The average increase will be between 18 and 25 per cent for the government flats, depending on size, with those in central or more popular areas set higher, the Inland Revenue Authority of Singapore said in the statement, according to local media.
The government unexpectedly said on Monday that annual inflation, which averaged just 1 per cent in 2006, could almost double from current levels in the first quarter of next year. -- REUTERS
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