Debated in Parliament on 2 Jul 2024.
Ms Foo Mee Har asked the Prime Minister and Minister for Finance why will the increase in Annual Value bands threshold for owner-occupier residential property tax rates only take effect from 1 January 2025, even though market rent rates have been experiencing sharp increases since 2022.
My response will cover both Oral Question No 100 and Written Question No 7 by Ms Foo Mee Har on today’s Order Paper.
Over the last two years, property taxes (PT) for most residential properties had increased due to higher market rents and an increase in PT rates for higher-value private residential properties.
To cushion the impact of the PT increases, amidst cost-of-living concerns, the Government provided PT rebates in 2023 and 2024.
For 2024, with the rebate, all one- and two-room Housing and Development Board (HDB) owner-occupiers do not pay PT. For other HDB owner-occupiers, the average PT increase is less than $3 per month.
For private property owner-occupiers, half experience a PT increase of less than $15 per month. The increase in PT is higher for those with higher-value private properties.
At Budget 2024, the Government announced that in light of the market trends in the last two years, all Annual Value (AV) bands of the owner-occupier residential PT rates will be raised with effect from 1 January 2025. The change, like other tax changes, is applied on a prospective basis. We also took into consideration the significant PT rebates that the Government had provided to cushion the PT increases in 2023 and 2024.
With the revision of AV bands from 2025, an owner-occupied 4-room HDB flat, assuming constant AV of $15,500, will see a PT bill of about $12 per month in 2025, without rebate, instead of the $25 per month seen in 2024, without rebate. Similarly, an owner-occupied landed property with constant AV of $50,000, will see a PT payable of $140 per month in 2025 instead of the $200 per month seen in 2024.
PAPERCUTS