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IRAS: PROPERTY TAXES REDUCED FOR BIGGER HDB FLATS IN 2015

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There’s never been a better way for HDB flat residents to kick off 2015. On December 8, 2014, Singapore’s Inland Revenue Authority or IRAS announced that effective 1 January 2015, bigger HDB flats will incur lower property taxes. As of date, this is the second time that property taxes for sizable HDB flats will be lowered.

Singapore’s IRAS hands over its early holiday present to families living in HDB flats. The policies governing the new IRAS property tax provision are going to change the way HDB flat residents live-for the better.

2013 and Two Years Moving Forward: Property Tax Savings between SGD$42 and SGD$54

For the entire 2015, HDB flat residents will save a whopping amount of property tax values ranging between SGD$42 and SGD$54, as assessed against HDB flat property tax savings value two years ago, in 2013.  IRAS announced this news in its recent press release.

Three to Five Bedroom and Executive Flats 2015 Property Tax Reductions

As the Annual Values or AV’s plunge, three to five bedroom and executive flat residents will have extra SGD$12 to SGD$14 funds to spare for property taxes.

The annual sizable HDB flat property tax savings will go a long way in maximising residents’ budgets for other expenses on a daily basis. HDB flat residents are going to find it easier to sustain both their basic and miscellaneous needs for months to come in 2015. The IRAS and HDB will work in best ways possible to take flat resident lifestyles to next levels.

Annual Value (AV) Based Property Tax Rate Calculations

As announced by IRAS, come 2015, the annual value (AV) or approximate yearly property rent value will be lowered at 3 percent. This comes in lieu of the reduction of the national rental value.

HDB flat property tax payment values for 2015 are assessed based on AV property tax values.

range of annual tax payable

A Clearer Overview of an HDB Flat Resident Property Tax Situation

Channel News Asia’s article gives a clearer overview on the new reduced HDB flat property tax situation for 2015:

An HDB four-bedroom flat resident whose property is worth SGD$10,000 annual rent value will be exempted from paying a property tax value of SGD $8,000. This resident, though, will need to pay a tax rate worth 4% for the pending SGD$2,000 property tax value.

Reasons Behind the Lowered HDB Flat Property Taxes

Properties Up for Rent Dominate

As more HDB flats are placed for rent, the Annual Values (AV’s) and corresponding property taxes of these flats are reduced. Increased number of HDB flats up for rent is a sign that more people in Singapore are experiencing tight financial dilemmas in the past two years. The 2-year lowered HDB flat property tax rates, though, is a life saver for residents experiencing financial crisis. The 2015 flat property tax savings are going to be influential factors in helping Singaporeans live the ideal comfortable lives they’ve always wanted.

Slow Resale Process is the Culprit

The HDB flat slow resale process is the culprit behind the increased number of properties being placed for rent. Singapore’s HDB needs to earn its target revenues, somehow, even as the property resale rates dwindle for the past two years. The HDB will make do of the best situation feasible in the shortest time possible. As more people in Singapore shy away from flat residential property investments, the HDB have had no choice but to put its vacant flats for rent.

For better understanding, take the analysis of Bernard Tong with regards to the past 2 year HDB resale flat trend. According to an article in Channel News Asia, Tong was quoted as saying:

“Basically, you have a situation where you have many flat owners who are wanting to sell their HDB flats, but cannot get the prices that they want because the resale prices for HDB are coming down due to the cooling measures.”

“So a lot of them have decided now to rent out their flats until market conditions improve and therefore, you have this huge supply of HDB rental flats that is coming into the market, and this is what is causing the dip in the market rentals. So as the market rentals fall, the annual market value falls as well, so then you will be paying lower taxes.”

Tong is an operation head specialist at Singapore’s HSR International Realtors.

2015 Payment Deadline for HDB FlatProperty Taxes Announced

As announced in the official website of IRAS, the 2015 HDB flat property taxes payment deadline is set on January 31, 2015. Flat residents need to be mindful of the said deadline date for their own positive welfare.  HDB flat residents are encouraged to file their payments on time to avoid penalties. As the article in Property Guru stated, late payees will need to pay a 5% fine fee.

Author’s Bio: Mark Yasay writes reviews and in-depth articles on the real estate industry, particularly in the areas of property investment, up and coming developments, and new trends. You may find his published articles and more useful resources on serenechua.com.

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Reuters Events Launch Global Investment Summit Online Edition Uniting Institutional Investors, Asset Owners & Financial Institutions

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Reuters Events – today announced the agenda for their Global Investment Summit (Dec 3rd -4th). The 2-day strategic summit has been reimagined in the era of social distancing and will be broadcast free of charge to the public.

This Summit, with a diverse range of international voices and anchored by Reuters News-led sessions, is the only place for institutional investors, asset owners and financial institutions to come to terms with the events of 2020.

Click for more information and for complimentary registration to the online edition

The Energy Transition team report an industry leading speaker faculty for 2020, including:

  • Eileen Murray, Chair, Finra
  • Philip Lane, Chief Economist, European Central Bank
  • Gregory Davis, Chief Investment Officer, Vanguard
  • Hanneke Smits, CEO, BNY Mellon Investment Management
  • Pascal Blanque, Chief Investment Officer, Amundi
  • Desiree Fixler, Group Chief Sustainability Officer, DWS
  • Joe Lubin, CEO, Consensys
  • Bahren Shaari, CEO, Bank of Singapore
  • Mark Machin, CEO, Canada Pension Plan Investment Board

The agenda released by Reuters Events Investment is both ambitious and comprehensive, and will cover four key themes: Market Outlook, Asset Management Strategies, Industry Deep-Dives and the Future of Investment.

View the full agenda here

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Halliburton & Baker Hughes CEO’s join Reuters Events: Energy Transition 2020

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Reuters Events – today announced that CEO’s of two of the world’s leading energy service companies, Halliburton and Baker Hughes, will join the speaker faculties for their flagship Energy Transition Summit.

The event will explore the creation of the future energy ecosystem and offer companies, from across the asset spectrum, a definitive guide to their net-zero strategies. The alignment of the two biggest O&G global service companies, Halliburton and Baker Hughes, represents a significant step in the transition to low-carbon energy

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

Alongside their CEO speaker representation, Halliburton join as Platinum sponsors of the North American edition. Baker Hughes join as gold sponsors for the European edition of the flagship energy transition program.

The Energy Transition team report an industry leading speaker faculty for 2020, including:

  • Lorenzo Simonelli, Chairman & CEO, Baker Hughes
  • Jeff Miller, CEO & President, Jeff Miller
  • Tristan Grimbert, CEO, EDF Renewables
  • John Pettigrew, Chief Executive, National Grid
  • Pratima Rangarajan, CEO, OGCI Climate Investments
  • Alex Schneiter, CEO & President, Lundin Energy
  • Gretchen Watkins, President, Shell Oil Company
  • Calvin Butler Jr., CEO, Exelon Utilities
  • Francis Fannon, Assistant Secretary ERB, S. Department of State
  • David Lawler, Chairman & President, bp America
  • Andreas Schierenbeck, CEO, Uniper

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

Governance & Cooperation – Does the energy transition face a ‘governance deficit’? To understand how the energy transition will develop over the next decade, it is crucial to understand the driving governing forces behind it. Will the Green Deal provide the first domino, how can we ensure progress in the shadow of Aberdeen and ensure that we translate targets into action?

Financing Energy Transition – We must address the elephant in the room; who is going to pay for it all? An understanding of where the funds are likely to come from is key to staking claim to the infrastructural projects that will redefine the modern world in the 21st century.

New Energy Infrastructure – Low-carbon energy supply and consumption will need a radical overhaul of infrastructure. As well as revamping the old, we’ll need entirely new assets and new systems of energy delivery. It’s an unprecedented opportunity with estimated spending at $70 trillion over the next decade. Knowing which technologies are ready to be scaled first is the key to understanding opportunity

Business Model Innovation – Who will provide leadership through the age of transition and how do we want our future energy system to look? Speed and timing will be crucial if you are to stay on the right side of the transition. Join us in setting business led, evidence based, targets as industry drives towards net-zero

More information on the Europe and North America editions can be found below. Registration for the LIVE stream is free.

At Reuters Events, we’re committed to tackling the Energy Transition head on; to shed light on the defining issue of our time and help energy companies meet a uniquely difficult challenge. That is, to be both an energy company of today, and the energy companies of tomorrow. In a period that will be defined by uncertainty we can, together, lighten the way forward.” – Owen Rolt, Head of Energy Transition, Reuters Events

Contact

Owen Rolt

Head of Energy Transition

Reuters Events

UK: +44 (0) 207 375 7596

E: [email protected]

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COVID-19 is changing people’s preferences when it comes to BTL investments

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COVID-19 is changing people’s preferences when it comes to BTL investments 1

By Jamie Johnson, CEO of FJP Investment

Throughout 2020, investors have had to navigate increasingly treacherous and volatile market conditions as a consequence of the COVID-19 pandemic. No country has been immune to the coronavirus outbreak, particularly here in the UK.

Yet even as the country enters another phased lockdown of sorts, demand for UK property has remained strong. After a brief period of suppressed demand after initial lockdown measures were introduced in late March, the UK’s implementation of the stamp duty land tax (SDLT) holiday triggered a rush in demand for bricks and mortar. As a result, both house prices and transactional activity is rising.

With this new surge in demand resulting in an 18-year-high of UK house price growth, according to the Royal Institute of Charted Surveyors, buy-to-let (BTL) investments have also substantially increased in popularity.

It’s easy to understand why. BTL investments offer landlords both long-term capital growth and regular returns in the form of rental payments. And now, as the SDLT holiday deadline beckons closer, investors keen on taking advantage of the comparative discounts on offer must act quickly.

My advice to those considering a BTL investment in the UK is to understand and appreciate the longstanding market changes that have been brought about by COVID-19. Traditional BTL hotspots are being challenged by a rise in tenant demand for real estate in up-and-coming cities and regions.

For example, the COVID-19 pandemic has resulted in the majority of the workforce working remotely from home. Recent data from property listing site Rightmove makes clear the shift in demand away from central London and towards less densely populated regions; with areas like Cambridge and Oxford seeing 76% and 64% more rental searches respectively and searches in areas like Earl’s Court dropping by 40%.

This is the clear result of previously London-based professionals realising the benefits of working from home. As businesses identify the financial drawbacks and COVID contagion risks of having all their staff physically present five days a week, employers will seek out smaller commercial workspaces.

At the same time, we are also seeing workers looking to rent larger, cheaper properties that might be further away from their office. This is due to the fact that they are unlikely to need to commute every working day to their office, even once the COVID-19 outbreak has been contained.

But, where exactly are the best larger, cheaper properties to be found? Where are the UK’s emerging BTL hotspots that need to be on the radar of prospective investors? I explore these pertinent questions below.

Liverpool life

Those who have been closely following the UK’s housing market will know just how primed Liverpool is for BTL investment. As a key recipient of the UK Government’s Northern Powerhouse funding, and with massive developments like Liverpool Waters and Wirral Waters soon to be completed, the city’s housing supply is ready to meet the demands of those taking part in the aforementioned London professional exodus.

With Liverpool constantly ranking No.1 in rankings of UK cities for BTL investment, it’s evident why investors would be keen on completing purchases of Liverpool property before the end of the SDLT holiday. Though even after the SDLT holiday ends, there’re still plenty of reasons to be optimistic about Liverpudlian BTL investment. Prime Minister Boris Johnson’s government is firmly committed to ‘levelling up’ the North of England through regional regeneration, and planned high speed rail connections between Liverpool and other northern cities will only add to the investment potential of the city.

Leeds living

Although Liverpool boasts the highest rental yields for BTL landlords in real terms, Leeds was recently named the most profitable city to become a landlord in the whole of the UK by CIA landlord. By evaluating numerous metrics; including mortgage costs, average rent, average monthly landlord costs and average property prices, they determined that Leeds was the best city for potential buyers to make their first foray into BTL investment.

And, looking at recent trends, it’s easy to see why. Leeds may benefit more from the London exodus than other cities due to its unique position of being a brain gain city’, i.e. one where more students remain after graduation than move away. As a result, it boasts the largest financial services sector in the nation after London, making it an ideal locale for employers in the financial services sector who are seeking cheaper commercial rent outside of London; likely bringing investment and employees with them.

With its strong urban economy likely to be bolstered by its designation as a ‘Northern Powerhouse’ leading business hub, Leeds is ideally positioned for BTL investment over the long-term.

Cardiff’s regeneration

And finally, the capital of Wales brings much to the table when deciding between different BTL investment destinations. With a metropolitan area population of over 1.1 million residents, forecasted to grow by 20% by 2035, demand for property in the city is set to rapidly increase over the next decade. Those able to capitalise on this population growth will be able to access considerable long-term investment opportunities – as recent reports suggest.

Thankfully, it’s unlikely that there’ll be any shortage of housing supply in Cardiff for BTL investors to invest in. Cardiff Bay has emerged as Europe’s largest waterfront development, and the upcoming Central Quay and £500m coastal developments will assist in attracting further investment into the city.

BTL remains a sound investment opportunity

COVID-19 has made evident just how resilient British real estate is as an investment asset. By offering the best of both worlds, namely long-term capital growth and regular rental returns, BTL has successfully remained an attractive and popular investment choice. And, with demand for housing still outstripping supply, the market need for rental accommodation looks set to only grow.

COVID-19 has permanently changed the UK’s housing market and, as explained above, new BTL hotspots are surely due to emerge over the next year. With renters seeking out larger homes in cheaper areas, flexible working patterns will forever change the landscape of the UK’s residential real estate market, and those able to capitalise on it may benefit hugely as a result.

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