Increase in Residential Property Tax by Housing Type Since 2023 and Projected Reduction from January 2025
Ministry of FinanceSpeakers
Summary
This question concerns Ms Foo Mee Har’s inquiry regarding residential property tax increases since 2023 and the projected tax reductions following the adjustment of annual value (AV) bands in January 2025. Minister for Transport and Second Minister for Finance Chee Hong Tat explained that while higher market rents increased taxes, government rebates cushioned the impact, keeping average monthly increases under $3 for most HDB owner-occupiers. He highlighted that the Government will raise all owner-occupier residential AV bands effective 1 January 2025 to prospectively lower tax liabilities for homeowners. For instance, monthly tax for a 4-room HDB flat is projected to decrease from $25 to $12, while a landed property with a $50,000 AV will see a reduction from $200 to $140. These measures aim to address recent market trends while building on previous rebate schemes provided in 2023 and 2024 to manage cost-of-living concerns.
Transcript
7 Ms Foo Mee Har asked the Prime Minister and Minister for Finance (a) how much has residential property tax increased for each housing type since 2023; and (b) what is the projected reduction in property tax rate for each housing type once the annual value bands are adjusted in January 2025.
Mr Chee Hong Tat: My response will cover both Oral Question No 100 and Written Question No 7 by Ms Foo Mee Har in today's Order Paper. [Please refer to "Delayed Effective Date for Increase in Annual Value Bands Threshold for Owner-occupier Residential Property Tax Rates", Official Report, 2 July 2024, Vol 95, Issue 137, Written Answers to Questions for Oral Answer not Answered by End of Question Time section.]
Over the last two years, property taxes (PTs) 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 a 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 a 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.