The government has recently announced that in 2025, owner-occupied HDB flats will receive a one-time property tax rebate of 20%, while owner-occupied private residential properties will receive a 15% rebate. However, for private residential property owners, the maximum rebate will be capped at $1,000.
Property tax is calculated based on a property’s annual value, which is the approximate rent it can fetch in a year if it were to be rented out. This rebate was introduced on November 29th by the government, in preparation for the upcoming increase in annual value bands for owner-occupied residential property tax rates on January 1st, which is part of Budget 2024.
As a result of these changes, the government asserts that a majority of owner-occupiers in HDB flats and more than 90% of private residential properties will see a decrease in property taxes next year. The government’s stated goal is to alleviate 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 stagnant this year due to minimal growth in private residential rents. However, he predicts that HDB rents may see a 4% increase, resulting in a rise in the annual value of HDB flats.
Lee suggests that this one-time property tax rebate may help HDB owners offset any potential impact from the increase in annual value. For instance, if a HDB flat has an annual value of $30,000, the property tax payable in 2025 would be $720. With the rebate, the owner would only have to pay $576, saving $144.
Private residential property owners may also benefit from the rebate. For example, if a property’s annual value 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 have to pay $4,896, saving $864.
When purchasing a condominium, it is crucial to factor in the maintenance and management of the property. Condos usually come with a maintenance fee, which covers the maintenance of shared spaces and amenities. Although these fees may increase the overall cost of owning a condo, they also guarantee that the property maintains its quality and value. To make the investment more hands-off, investors can enlist the services of a property management company to handle the daily management tasks of their condos. Adding to the appeal, Singapore Projects can offer attractive options for those looking to invest in the city’s condominium market.
Lee notes that property tax rebates have been offered in the past and do not diminish the attractiveness of investing in residential properties in Singapore. The primary appeal of investing in these properties lies in their potential for capital appreciation, which far outweighs any increase in property tax.
In conclusion, the revised property tax rates in Budget 2024 will benefit owner-occupied properties with lower annual values. This one-time rebate serves as a timely relief for property owners, helping to alleviate concerns about the cost of living in Singapore.