In a move to support property owners and mitigate cost-of-living concerns, the government has announced a one-off property tax rebate for owner-occupied HDB flats and private residential properties in 2025. The rebate will be 20% for HDB flats and 15% for private residential properties, with a cap of $1,000 for private property owners.
Property tax is calculated based on a property’s annual value, which is an estimate of the annual rent a property can command if it were to be rented out.
This announcement was made on Nov 29, in preparation for the increase in annual value bands for owner-occupied residential properties, which will take effect on Jan 1 under Budget 2024.
The government expects that this measure will result in lower property taxes for over 90% of private residential property owners and all HDB flat owners, in line with its aim to address concerns over the cost of living.
According to Lee Sze Teck, senior director of data analytics at Huttons Asia, the annual value of private properties is expected to remain stagnant this year due to the marginal growth in private residential rents. However, HDB rents are expected to increase by 4%, which may lead to a slight increase in the annual value of HDB flats. The one-off property tax rebate may help HDB owners offset this potential increase, with savings of up to $144 for a flat with an annual value of $30,000.
Private residential property owners may also benefit from the one-off rebate, as seen in the example of a property with an annual value of $85,000. The property tax payable for 2025 would be $5,760, but with a 15% rebate capped at $1,000, the owner would only need to pay $4,896, saving $864.
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However, Lee says that property tax rebates have been offered before and do not affect the attractiveness of investing in residential properties in Singapore. The appeal of these properties lies in their potential for capital appreciation, which outweighs any increase in property tax.
Overall, the government’s move to introduce one-off property tax rebates for owner-occupied properties with lower annual values aims to benefit property owners and mitigate any potential impact from the increase in annual value.