IRA announces property tax rebate for 2024 to alleviate impact of increases

SINGAPORE: On Thursday, Nov 30, the Inland Revenue Authority (IRA) announced the property tax rebate for 2024 to alleviate the impact of increases in property taxes. In the coming year, property taxes are set to increase for most residential properties driven by higher market rents and Annual Values (AVs).  To cushion the financial impact on homeowners, the government has introduced a one-off Property Tax (PT) rebate exclusively for owner-occupied residential properties.

Starting from Jan 1, 2024, the AVs of Housing Development Board (HDB) flats and most private residential properties will be adjusted to reflect the rise in market rents. The AV is a crucial factor in determining the PT payable by property owners. Interested parties can refer to Annex A-Explaining Annual Values for Property Tax Purposes, for detailed insights into how AVs are assessed.

In addition, as previously announced in Budget 2022, the second and final phase of the PT rate increase will come into effect from the same date. It’s important to note that this increase will only impact non-owner-occupied and owner-occupied residential properties with an AV exceeding S$30,000. However, owner-occupied HDB flats are exempt from this rate increase, ensuring they continue to benefit from lower PT rates than rented properties.

The government has introduced a tiered PT rebate system to counterbalance the anticipated rise in property taxes and address concerns about the cost of living. This one-off rebate, which can reach 100%, aims to maintain a progressive PT regime where those with higher means contribute their fair share.

Here are the tiered PT rebates for different types of owner-occupied residential properties provided by IRA:

• 1 & 2-room flat: 100% rebate
• 3-room flat: 70% rebate
• 4-room flat: 50% rebate
• 5-room flat: 40% rebate
• Executive HDB: 30% rebate
• Private property: 15% rebate (capped at S$1,000)

This rebate ensures that all one- and two-room HDB owner-occupiers will pay no property tax in 2024. For other HDB flat types, the rebate will automatically offset any PT payable, resulting in an average monthly increase of less than S$3 in 2024.

• 3-room flat:
  • Average Property Tax Payable in 2024 (After Rebate): S$4.10 per month
  • Average Increase in Property Tax Payable (After Rebate): S$1.50 per month
• 4-room flat:
  • Average Property Tax Payable in 2024 (After Rebate): S$12.80 per month
  • Average Increase in Property Tax Payable (After Rebate): S$2.40 per month
• 5-room flat:
  • Average Property Tax Payable in 2024 (After Rebate): S$17.90 per month
  • Average Increase in Property Tax Payable (After Rebate): S$4.30 per month
• Executive HDB:
  • Average Property Tax Payable in 2024 (After Rebate): S$22.30 per month
  • Average Increase in Property Tax Payable (After Rebate): S$6.30 per month

For private property owner-occupiers, the rebate will also offset PT payable, resulting in a modest increase. The bottom half of private property owner-occupiers will see an increase of less than S$15 per month, with higher-value properties experiencing a comparatively higher rise.

To provide additional support, the government will raise the AV thresholds for social support schemes starting in January 2024. More information on these changes can be found at go.gov.sg/revised-av-thresholds.

Property owners are urged to pay their 2024 PT by Jan 31, 2024, with a 5% penalty for late payments or failure to arrange GIRO instalments by the due date. Joining the GIRO payment system allows property owners to enjoy up to 12 interest-free monthly instalments or opt for a one-time deduction. Financially challenged property owners can seek assistance from the Inland Revenue Authority of Singapore (IRAS) for a suitable payment plan before the deadline. /TISG