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.
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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.
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.