Complete Guide To Property Tax For Homeowners In Singapore
In Singapore, property taxes and duties need to be paid not only when purchasing residential property purchases, but also annually on all the properties you own.
This article will focus on the latter tax on property ownership, and cover the amount and type of property taxes homeowners need to be aware of and pay.
Singapore Property Tax Is Paid By The Property Owner(s)
In Singapore, property tax is levied on the owner of the property – whether the unit is owner-occupied, rented out, or vacant. The exception would be a trustee or appointed agent who is managing a property and collecting rent on an owner’s behalf.
Even though a tenant might lose out on some government schemes as a result of living in a property with high Annual Value (AV), tenants do not need to pay property taxes.
In the event there are multiple owners of the property, the Inland Revenue Authority of Singapore (IRAS) considers the allocation of the share of property tax a private matter. In other words, IRAS does not care who pays the tax, so long as the tax is paid, but IRAS is legally allowed to go after any/all of the property owners for unpaid dues.
Though for all correspondence, including payment reminders or refunds, IRAS would contact the owner whose name appears first in the property deed.
How Is The Property Tax Rate In Singapore Calculated?
Just as there are different tax brackets for income tax based on how much you earn, chargeable property tax in Singapore is tiered based on the Annual Value (AV) of your property. Furthermore, there are different rates and brackets, depending on whether the property is owner-occupied or not.
Here are the tax rates for owner-occupied properties:
For example, for an owner-occupied property with an annual value of $40,000, the first $8,000 is taxed at 0%, while the next $32,000 is taxed at 4%, which works out to $1,280 in total property tax for the year.
And the following are property tax rates for non-owner-occupied properties:
You can also use IRAS’ property tax calculator to find out how much property tax you can expect to pay.
When And How You Will Receive Your Property Tax Bill
You can check on your taxes due, past statements, and details of your entire property portfolio (including each property’s AV) using IRAS’ myTax Portal.
For 2021, you will receive notice of your property tax bill by 15 December 2020, and you will need to make payment (or have an installment plan set up) by 31 January 2021, after which a 5% late payment penalty will be levied.
Sample Property Tax Notice (Source: IRAS)
In the event your tax bill continues to be unpaid, IRAS is empowered to take action to recover owed taxes, including appointing agents like your bank(s), employer, tenant or lawyer to pay the owed monies, and/or seizing your property and putting it up for public auction to recover unpaid dues.
Modes Of Payment For Your Property Tax To IRAS
According to IRAS, the preferred (and most common) method of payment for property tax is GIRO (General Interbank Recurring Order). Using GIRO, you can opt for up to 12 interest-free monthly payments or a yearly-deduction. All GIRO deductions are made on the 5th of each month, and if unsuccessful, a second attempt will be made on the 21st of the same month.
After two consecutive months of unsuccessful GIRO directions, the GIRO arrangement will be automatically cancelled, and you will then need to re-activate your GIRO arrangement if you wish to continue using GIRO for your property tax payments.
You can use your local bank’s internet banking service to set up a new GIRO arrangement. Alternatively, DBS/POSB and OCBC customers can from within IRAS’ myTax Portal, while DBS/POSB customers can also use AXS stations. All GIRO arrangements will be ready for use within 3 working days.
If you don’t want to/cannot use GIRO for some reason, there are also a wealth of other electronic payment modes, including PayNow, ATMs, AXS stations, SAM kiosks, selected credit cards, i-Banking transfers, and NETS machines over the counter at SingPost outlets. Those overseas can pay using telegraphic transfers if the above-mentioned options are not feasible.
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