Classification and Tax Treatment for Company-owned Premises Used to House Persons

Ms Diana Pang Li Yen asked the Prime Minister and Minister for Finance (a) how IRAS classifies company-owned premises used to house persons for property tax purposes, including whether they are treated as residential premises, staff accommodation, dormitories or other non-residential premises; (b) what factors IRAS considers in making that classification; and (c) whether clear guidelines can be set on this issue.

The definition of residential premises is set out in the Property Tax (Rates for Residential Premises Order 2013 (the Order)), which defines it as any building, flat or tenement, principally used for residential purposes. As company-owned residential premises are owned by non-individuals, they do not qualify for owner-occupier tax rates and are instead taxed at the non-owner-occupier rates that start at 12%.

The Order excludes certain accommodation types from the definition of residential premises, including some staff quarters and workers' dormitories, where these uses have been approved by Urban Redevelopment Authority (URA) under the Planning Act 1998. Such premises are taxed at the non-residential rate of 10%.

Property owners and businesses can refer to URA's and the Inland Revenue Authority of Singapore's websites for the relevant planning guidelines and property tax rates for different property types.