The Singapore government has recently announced a one-off rebate on property taxes for owner-occupied properties in both HDB flats and private residential properties in 2025. This move aims to ease the financial burden of homeowners, especially in light of the recent increase in annual value bands for owner-occupied residential properties starting in 2024.
Under this new scheme, owner-occupiers of HDB flats will receive a 20% rebate on their property tax, while those in private residential properties will be granted a 15% rebate. However, the latter will have a cap of $1,000 on their rebate amount.
In Singapore, property tax is calculated based on a property’s annual value, which is an estimation of its rental value for a year. The government has indicated that this rebate is in response to rising concerns about the cost of living among Singaporeans.
According to Lee Sze Teck, senior director of data analytics at Huttons Asia, the annual value of private properties is expected to remain unchanged this year due to minimal growth in private residential rents. On the other hand, HDB rents are projected to increase by 4%, which may result in a slight increase in the annual value of HDB flats.
The one-off property tax rebate could potentially help cushion the effects of any increase in annual value for HDB homeowners. For instance, if a HDB flat’s annual value is $30,000, the property tax payable in 2025 would be $720. With the 20% rebate, the owner will only need to pay $576, resulting in a savings of $144.
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Similarly, some private residential property owners may also benefit from this rebate. For example, if the annual value of a property is $85,000, the property tax payable in 2025 would be $5,760. With a 15% rebate capped at $1,000, the owner would only need to pay $4,896, saving $864 in property taxes.
However, Lee emphasizes that property tax rebates have been offered before and do not affect the appeal of investing in residential properties in Singapore. The primary draw for such investments lies in the potential for capital appreciation, which outweighs any increase in property tax.
Overall, this move by the government is expected to benefit over 90% of owner-occupiers of private residential properties and all HDB flat owners. It aligns with the government’s goal of mitigating the financial concerns of Singaporeans and maintaining the attractiveness of residential property investments in the country.