Property Owners Levied Non-owner-occupier Property Tax Rates Despite Residing in Their Own Homes
Ministry of FinanceSpeakers
Summary
This question concerns property owners charged non-owner-occupier tax rates despite residing in their homes, with MP Mr Gerald Giam Yean Song asking about statistics on excess tax paid and the criteria for refunds. Deputy Prime Minister and Minister for Finance Mr Heng Swee Keat explained that owners must inform the Inland Revenue Authority of Singapore (IRAS) of their residence, though concessions are now automated for HDB flats and many private properties bought after 2011. For properties purchased before 2011, IRAS conducted an exercise in 2012 to invite applications from eligible owners, as statistics on those who failed to apply are not maintained. The Minister highlighted that homeowners receiving automatic concessions are conversely required to notify IRAS if they move out so the concession can be withdrawn. On the matter of refunding excess tax after a property is sold, the Minister stated that IRAS will review such requests based on the specific circumstances of each case.
Transcript
22 Mr Gerald Giam Yean Song asked the Deputy Prime Minister and Minister for Finance between 2000 and 2020 (a) how many property owners have been taxed with non-owner-occupier property tax rates when they were in fact residing in their own homes; (b) what is the total amount of excess tax paid; (c) why is it necessary for a property owner to declare that he is the owner occupying the property in order to enjoy owner-occupier tax rates instead of these rates being applied by default; and (d) whether IRAS will refund property owners the excess tax paid, even if the incorrect tax rates were discovered after they had moved out of their properties.
Mr Heng Swee Keat: Residential properties are subject to property tax, with higher-value residential properties being taxed at higher rates. Owner-occupied residential properties enjoy concessionary property tax rates. Properties which are rented out or vacant do not enjoy this concession. IRAS publicises information on the property tax rates, including the concession, through various platforms such as its website and annual property tax notice.
Property owners are free to buy one or more properties, and choose to live in any or none of the properties they own. Hence, it is necessary for the property owner to inform IRAS about owner occupation to qualify for the concession. We do not have statistics on how many property owners live in their own properties but do not enjoy concessionary tax rates.
That said, IRAS has put in place measures for taxpayers’ convenience. First, IRAS grants concessionary rates automatically to all buyers of HDB and DBSS flats, as well as new ECs. These forms of housing are meant for owner occupation. Second, IRAS has been extending the concession automatically to a buyer of a private property or resale EC bought on or after 1 January 2011, if he is a Singapore Citizen or Permanent Resident, and neither he nor his spouse is enjoying the concession on any other residential property.
Residential property owners who are granted the concession automatically are required to inform IRAS if the residential property is not being owner-occupied, and the concession will be withdrawn.
For residential properties bought before 2011, there may be cases which could be eligible for the concession, but the owners did not apply for it. IRAS sent letters during a 2012 exercise to invite them to apply for the concession if they were residing in their property.
On whether a property owner can claim the concession and seek a refund of the excess property tax paid after he has sold the property, IRAS will need to look at the specific circumstances. If the Member has any specific case in hand, he can approach IRAS for a review of the case.