Start tightening your purses.
According to a release by Inland Revenue Authority of Singapore, all one-room and two-room owner-occupiers of HDB homes will not pay property tax in 2013, similar to 2012. But for majority of other HDB flat types, the property tax bill for 2013 will increase by between $40 to $50, after taking into account a new $40 rebate.
The increase in property tax comes after the revision of Annual Values (AVs) of HDB flats with effect from 1 January 2013, reflecting the rise in market rentals. To mitigate the increase in the property tax payable by lower and middle income households as a result of the AV revision, the Government will give a one-off rebate of $40 to owner-occupied HDB flats.
IRAS reviews the AVs of all properties - including HDB flats - annually. The AV, which is based on the estimated annual market rent of a property if it were to be let out, applies to all homes, including owner-occupied homes. It is used as a basis to compute the property tax payable.
Property tax is calculated at 10% of the AV for non owner-occupied homes. For owner-occupied homes, the property tax payable is calculated based on the concessionary tax rates.
Since the last revision of AVs of all HDB flats on 1 January 2012, market rentals of HDB flats have risen by 8% 13 %. Accordingly, the AVs of all HDB flats will be revised from 1 January 2013.
To mitigate the impact of the increase in property tax payable, all owners of owner-occupied HDB flats will be given a one-time rebate of $40. It will be automatically set-off against the property tax payable in 2013. This rebate will not apply to non owner-occupied HDB flats which are currently taxed at 10%. 94% of HDB flat owners will receive this rebate.
HDB flat owners will receive their property tax notices and bills by the end of this year. Property tax has to be paid by 31 January 2013. IRAS encourages property owners to join the GIRO payment scheme for property tax to enjoy up to 12 interest-free monthly instalments. Taxpayers who have bank accounts in DBS/POSB or OCBC can apply for GIRO via Internet Banking and receive instant approval.
There will be a 5% penalty imposed for owners who fail to pay or have not arranged to pay by 31 January 2013. Owners facing financial difficulties are advised to contact IRAS before the due date to discuss a suitable payment plan.
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