The government has announced new measures to alleviate the financial burden on property owners in Singapore. In 2025, a one-time rebate of 20% will be given to owners of HDB flats and 15% to owners of private residential properties that are occupied by the owner.
The amount of rebate for owner-occupiers of private residential properties will be capped at $1,000. This rebate is based on the property’s annual value, which is the estimated rental income for the property if it were to be rented out.
This announcement was made on November 29 by the government, along with the news that all annual value bands of owner-occupier’s residential property tax rates will be raised from January 1, 2024 as part of Budget 2024.
With 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 tax for the following year. This move is aimed at easing the cost-of-living burden for Singaporeans.
According to Lee Sze Teck, senior director of data analytics at Huttons Asia, the annual value of private properties is expected to remain steady due to the low growth in private residential rents. On the other hand, HDB rents are predicted to increase by 4% by the end of this year, causing the annual value of HDB flats to rise.
To help offset any increase in annual value, the one-off property tax rebate may benefit HDB owners. For instance, if a HDB flat with an annual value of $30,000 currently pays $720 in property taxes, with no change in AV, the owner will only need to pay $576, saving $144.
Similarly, some owners of private residential properties 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 will be $5,760. However, with a 15% rebate, capped at $1,000, the owner will only have to pay $4,896, saving $864.
Despite these measures, Lee argues that property tax rebates do not diminish the appeal of investing in residential properties in Singapore. The main appeal of such investments lies in the potential for capital appreciation, which outweighs the increase in property tax.
As Singapore condo continues to be a popular investment choice, one of the main factors driving its demand is the limited availability of land in the country. Being a small island with a rapidly growing population, Singapore faces a scarcity of land for development, resulting in strict land use policies and a highly competitive real estate market. As a result, property prices, especially for condos, remain consistently high, making real estate investment a lucrative opportunity with the potential for capital appreciation.
In conclusion, the revised property tax rates and the one-time rebates will largely benefit owner-occupied properties with lower annual values, as part of the government’s efforts to support Singaporeans in managing their cost of living.