If you are a property owner, you will receive your Singapore property tax bill every year. Do you know how is your property tax determined?
Whether you are a property homeowner or investor in Singapore, you are required to pay your property tax by the 31st of January every year. But you may not be aware that despite owning the same house, you were paying different property taxes every year.
In this post, I will explain how you can calculate property tax by yourself so you can do the necessary budgeting.
What is property tax
Property tax is a wealth tax. It is a tax levied on all property owners in Singapore while your property is
- owner-occupied
- tenanted out, or
- left vacant.
You may have to pay income tax for the rental income derived from the leasing of the property. But property tax is a separate tax. In another word, if you are renting out your property, you are required to pay both income tax and property tax.
How is property tax calculated
As long as you are listed as the property’s “owner”, you have to pay property tax. There are two types of properties in Singapore
- Residential properties such as HDB flats, condominiums, apartments, and bungalows.
- Non-residential properties such as commercial and industrial buildings
Today I will only talk about the residential property tax.
In a nutshell, your annual property tax = Annual value x Tax rate
Annual value
Annual value is the estimated yearly rental which your property can fetch if it were to be rented out. It excludes furniture, furnishings & maintenance fees. The Inland Revenue Authority of Singapore (IRAS) determines this each year based on the estimated market rentals of similar or comparable properties.
Tax rate
All residential properties are taxed at progressive property tax rates.
- You pay lower tax rate if your property is owner-occupied
- You pay a higher tax rate if your property is non-owner occupied.
With revised progressive property tax rates a few years back, you pay even less property tax for an owner-occupied property but even higher tax if you rent out your property.
The progressive property tax rates for owner-occupied property are as below since 1 Jan 2015
| Annual Value ($) | Property Tax Rate | Property Tax Payable |
| First $8,000 Next $47,000 | 0% 4% | $0 $1,880 |
| First $55,000 Next $15,000 | – 6% | $1,880 $ 900 |
| First $70,000 Next $15,000 | – 8% | $2,780 $1,200 |
| First $85,000 Next $15,000 | – 10% | $3,980 $1,500 |
| First $100,000 Next $15,000 | – 12% | $5,480 $1,800 |
| First $115,000 Next $15,000 | – 14% | $7,280 $2,100 |
| First $130,000 Above $130,000 | – 16% | $9,380 |
So once you understand the concept of Annual Value and Tax Rate, you can easily calculate property tax by yourself.
For example, If the annual value of your residential property is $36,000, your property tax is $1,120. This is how it is calculated:
| Annual Value ($) | Tax Rate | Property Tax Payable |
| First 8,000 | X 0% | = 0 |
| Next 28,000 | X 4% | = $1,120 |
| Total Property Tax Payable | = $1,120 | |
If the annual value of your residential property is $36,000, you pay $3,900 property tax
| Annual Value ($) | Property Tax Rate | Property Tax Payable |
| First 8,000 | X 0% | = 0 |
| Next 47,000 | X 4% | = $1,880 |
| Next 15,000 | X 6% | = $ 900 |
| Remaining 14,000 | X 8% | = $1,120 |
| Total Property Tax Payable | = $3,900 | |
You need to pay much higher property tax if you rent out your property
Many Singaporeans aspire to own two properties. One for own stay and one for rental income. But you should know it is extremely costly to invest in property in Singapore for income.
Not only you have to pay income tax for the collected rental, you have to pay hefty property tax because it is non-owner occupied. From the table below, you can see that the minimum tax is 10% of your Annual Value (estimated rental income). If you do a simple calculation, a condominium with $36,000 annual value will cost you
- $1,120 property tax if you live in it
- $3,600 property tax if you rent it out
Below is non-owner occupied residential property tax rates
| Annual Value ($) | Property Tax Rate | Property Tax Payable |
| First 30,000 Next $15,000 | 10% 12% | $3,000 $1,800 |
| First $45,000 Next $15,000 | – 14% | $4,800 $2,100 |
| First $60,000 Next $15,000 | – 16% | $6,900 $2,400 |
| First $75,000 Next $15,000 | – 18% | $9,300 $2,700 |
| First $90,000 Above $90,000 | – 20% | $12,000 |
Check property tax online
IRAS provides an interactive online property tax calculators for you to easily work out how much property tax you have to pay. The beauty of this online tools is that it also integrates the rebates applicable each year for various types of properties.
In fact, you can check the property tax of any property in Singapore if you know the owner’s NRIC. Don’t believe me? Simply go to this link and give it a try.
You have to pay your property tax by 31 January to avoid a 5% penalty. You can pay property tax via
- AXS
- SAM
- Internet Banking
Your property tax bill is set for this year, but in my next article, I will talk about how you can do some planning so you can pay less property tax for next year.
Are you interested? Simply subscribe to my email updates below and stay tuned…
Leave a Reply