Amidst rising vacancies and a sluggish residential market, the Inland Revenue Authority of Singapore (IRAS) will reduce the property tax for next year of about 73,300 private houses, according to media reports.
This translates to 25.7 percent out of 285,000 private homes in Singapore. Of these, 70,000 are landed and 215,000 are high-rise units. Last year, only two percent saw a reduction in taxes due to a dip in their annual values.
Basically, the property tax of private houses depends on their annual value, which is reviewed each year by the government based on the rents of similar homes in the area.
However, some believe the tax collectors yearly review does not completely and accurately gauge the annual values of properties. Nonetheless, IRAS pointed out that Hong Kong holds an annual review, while some countries have longer review periods of three to five years.
Home owners can also raise objections if they feel there is a mistake in the assessment of their properties annual values, but some are held back from doing so due to an absence of reliable rental data.
It's not that the process is not transparent, but both IRAS and home owners are handicapped, said Leung Yew Kwong, Principal Tax Consultant at KPMG Singapore. Its impossible for IRAS to go into every house to assess its condition, and rental information is difficult for individuals to get.
In the 12 months to 31 March 2014, IRAS collected $720 million property taxes from private homes.