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57,000 investment homes face higher taxes

Posted by Property Launch Invest on Sunday, 06 October 2013 in Property News

About a third of Singapore's 169,000 investment homes will face higher property levies once the Budget's new tax structure takes full effect in 2015.

Owners of such units with an annual value of more than $30,000 - or about 57,000 homes - will pay higher taxes, the Ministry of Finance (MOF) told The Straits Times yesterday. The progressive tax rates range from 12 per cent to 20 per cent of a property's annual value.

The other investment homes - about 112,000 properties - have annual values of $30,000 and below, so the existing property tax rate of 10 per cent will continue to apply.

The annual value is the estimated annual rent the property may fetch. An annual value of $30,000, for instance, could apply to a suburban condominium.

Singapore has around 962,000 owner-occupied properties and 169,000 investment homes.

Investment homes - about 15 per cent of the total housing stock - include vacant units, an MOF spokesman said.

Experts say the changes will affect mostly high-end homes, especially with the removal of the property tax refund concession for vacant properties next year.

Without the tax concession, there might be more high-end homes coming on stream, some held by developers, and that could further dampen rents.

Properties that are vacant despite reasonable efforts by owners to find a tenant, for instance, can get a full property tax refund for the duration of the vacancy. But from the start of next year, they will be taxed at prevailing property tax rates.

As far as owner-occupied homes go, 97.8 per cent of owners will enjoy lower property taxes, 1 per cent will continue paying no tax while the remaining 1.2 per cent will face higher taxes, the MOF spokesman noted.

Owners of homes with an annual value of $6,000 and less - there are about 9,600 owner- occupied homes in this category - will continue to pay no property tax under both tax structures. These homes include one- and two-room Housing Board flats.

Source: The Straits Times - 8 March 2013

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PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

57,000 investment homes face higher taxes

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