I REFER to the revision of the property tax rate on owner occupied properties which has the effect of reducing by $240 the property tax currently paid by the majority of homeowners, based on exemption of tax on the first $6,000 of annual value (AV) which at present attracts tax at 4 per cent.
The benefit of the rate change, alas, may not last long if the IRAS starts revaluing the AV on the grounds that the property market has been unusually strong of late and likewise for rentals. If AV increases by $6,000, there goes the $240.
In revising AV, it should be borne in mind that to the owner occupant, even a doubling of notional rental makes no difference in terms of income.
Source: Business Times, 26 Feb 2010