WE REFER to the letter, ‘Property prices down but not property taxes’ (Jan 1), by Mr David Goh, who asked why the Inland Revenue Authority of Singapore (Iras) did not reduce the property tax on residential properties for 2009, when rentals are expected to come down this year.
We would like to clarify that Annual Values (AVs) of properties are not based on projections of market rentals, but on prevailing market rentals for similar properties in the same locality.
Iras reviews the AVs of properties annually. The property tax payable this year is based on AVs of private residential properties at the time they were last re-assessed, which was last year.
Iras is aware that rentals are now on a falling trend and will monitor the situation closely. We will expedite the next AV assessments this year and revise them downwards if rentals drop below the existing AVs.
A number of property tax reliefs are currently available to owners who live in their homes. Their properties are taxed at the concessionary rate of 4 per cent, while let-out properties are taxed at 10 per cent. The owners will also receive an annual rebate of up to $100 or the actual tax payable (whichever is lower) for 2008 and 2009, which was announced in 2007.
For owner-occupied properties with AVs below $10,000, owners will also enjoy the ongoing property tax rebates of $25 to $150 before the annual rebate.
The Government is also looking into various measures to help households cope with the economic downturn.
We thank Mr Goh for his feedback.
Yvonne Yim (Ms)Principal Corporate Communications Officer
Inland Revenue Authority of Singapore
Source : Straits Times - 13 Jan 2009