insight
工程技術，地產投資，信仰家園，時尚生活
According to the 2013 Budget announced on Tuesday, Deputy Prime Minister Tharman Shanmugaratnam has said that most owner-occupied homes will enjoy a lower tax rate. Most will agree that the higher tax rate for luxury residences and investment homes may bring about the balance which the housing market needs. Mr Tharman considers “the property tax a wealth tax and is applied to homes irrespective of whether lived in, vacant or rented out. Those who live in the most expensive homes should pay more property tax than others”.
New Property Tax Structure presented in 2013′s Budget. Graph by singaporebudget.gov.sg.
Tax rates will be calculated based on the Annual Value of the home, i.e. the estimated annual rent which the property may fetch. For homes with an Annual value of less that $8000, no property tax will be required. The limit used to be $6000. By raising the number to $8000, 950,000 may now benefit from this zero property tax band.
Investment homes which are not occupied by the buyer will now have to pay more in property tax, up to $24,000 for landed properties in central locations with an Annual Value of $150,000 and above. However, there may be some who are living in highly-valued properties but may be cash rich. What then? Mr Tharman has said that retirees will still pay less in property tax.
Marina Bay Suites.
The new rates take effect in January 2014. What these new property tax guidelines will bring to the table is a $44 million reduction in tax revenue from the savings offered to owner-occupied home owners, and possibly a $72 million revenue from taxes from investment home owners. Will there be loopholes that property investors can get around and is it necessary to plug these loopholes before the leaks cause trouble in Singapore’s real estate market?
