The government has announced a one-off property tax rebate for owner-occupied HDB flats and private residential properties in 2025. Under this scheme, HDB flat owners will receive a 20% rebate, while private residential property owners will receive a 15% rebate. However, the maximum rebate for private property owners will be capped at $1,000.
Property tax is calculated based on a property’s annual value, which is the estimated annual rent that the property can fetch if it were to be rented out. This rebate was announced by the government on Nov 29, along with the plan to raise all annual value bands of owner-occupied residential property tax rates on Jan 1 next year as part of Budget 2024.
As a result of these changes, the government estimates that over 90% of private residential property owners and all HDB flat owners will see a decrease in their property taxes next year. This move is in line with the government’s efforts to alleviate cost-of-living concerns among Singaporeans.
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According to Lee Sze Teck, senior director of data analytics at Huttons Asia, the annual value of private properties is expected to remain stagnant due to low growth in private residential rents this year. On the other hand, HDB rents are expected to increase by 4%, leading to a potential increase in the annual value of HDB flats.
The one-off property tax rebate may help HDB owners to offset any increase in annual value. For instance, if a HDB flat has an annual value of $30,000, the property tax payable is $720 in 2025. With the rebate, the owner will only have to pay $576, resulting in a savings of $144.
Private residential owners may also benefit from the one-off rebate. For example, if the annual value of their property is $85,000, the property tax payable in 2025 is $5,760. With the 15% rebate, capped at $1,000, the owner will only have to pay $4,896, saving $864.
However, Lee emphasizes that the appeal of investing in residential properties in Singapore lies in the potential for capital appreciation, which outweighs the increase in property tax. This one-off rebate does not reduce the appeal of investing in residential properties. It is expected that the revised property tax rates will benefit owner-occupied properties with lower annual values.