Differentiated Property Tax Rates for Vacant and Non-vacant Commercial and Industrial Properties

Mr Ng Shi Xuan asked the Prime Minister and Minister for Finance (a) whether the Government has studied differentiated property tax rates for vacant and non-vacant commercial and industrial properties; (b) if yes, what are the findings of the study; and (c) if no, whether the Government will consider such a study to reduce vacancy rates of commercial and industrial properties.

Currently, non-residential properties, such as commercial and industrial properties, are taxed at a flat rate of 10% of the Annual Value of the property.

Vacancy rates for commercial and industrial properties have remained stable over the past three years and are comparable to pre-COVID levels. Therefore, there is no strong basis for the Government to consider differentiated Property Tax rates to reduce vacancy rates in commercial and industrial properties.

Most jurisdictions or cities do not impose differentiated property tax rates for vacant and non-vacant commercial and industrial properties. The effectiveness of such a structure to reduce vacancy rates is unclear, as there are many other factors affecting leasing decisions, including rentals, location, economic conditions and market demand.