Property Tax, Explained: Annual Value, Tax Rate And How To Make Payment

Whether you’ve bought a home for your own stay or have a few investment properties under your belt, you may be required to pay property tax. Here’s a round-up of what you need to know.

Owning a home comes with its fair share of responsibilities. One of which is paying property tax. 

Whether you’re new to homeownership or you’ve been around the block, we’ve gathered all the information and resources you need to stay on top of your taxes. Last thing you’d want is to incur penalties for avoidable hiccups such as late payments.

• What is property tax?
• Who needs to pay property tax?
• How is property tax calculated?
• How much tax do you need to pay?
• How to check property tax balance
• When to pay taxes
• Ways to pay property tax
• What happens to late tax payments
• Important links

What is property tax?

It’s a wealth tax that’s imposed on you based on the ownership of property. Contrary to what you may think, it’s not a tax reserved for homeowners milking rental income. This is why property tax is levied on both owner-occupied and non-owner-occupied properties, including property that is vacant or rented out.

Who needs to pay property tax in Singapore?

The honour goes out to anyone who owns property in Singapore with an Annual Value (AV) that’s above $8,000. Your property’s AV is determined by the market rental rate of nearby properties which are similar to yours. 

To check the AV of your property, visit the IRAS website. Do note that there’s a $2.50 fee, which you can pay via credit cards or eNETS.

How is property tax calculated? 

It comprises two main components: AV and the property tax rate. The AV of the property is multiplied by the prevailing property tax rate. 

Your property’s tax rate depends on whether it’s an owner-occupied home or a non-owner-occupied home. The rule of thumb is that non-owner-occupied homes may fetch higher tax rates.

Owner-occupied property

Homeowners with properties below $8,000 in AV don’t have to pay property tax. In addition, properties with up to $59,000 in AV may not have to pay tax or pay less tax. Based on the table below, tax rates could go up to 16%.

Non-owner-occupied property 

This tends to be higher than the owner-occupied property tax rate. From the table above, you’ll notice that the maximum tax rate for owner-occupied homes are up to 16% only. This isn’t the case for non-owner-occupied property, which could go up to 20%. The first tier of AV also starts at a much higher rate, at 10%.

How much tax do you need to pay?

Property tax rates are progressive. This means that the higher your property value, the higher your tax rate. Let’s take a look at how these rates are used to calculate your tax payable amount.

For owner-occupiers:

Let’s assume your property’s AV is $10,000. 

The first $8,000 is multiplied by 0%, amounting to no tax payable. 

The remaining $2,000 is then multiplied by 4%.

Total tax payable = ($8,000 x 0%) + ($2,000 x 4%) = $80

For non-owner-occupiers:

Let’s assume your property’s AV is $50,000. 

The first $30,000 is multiplied by 10%, amounting to $3,000 

The next $15,000 is multiplied by 12%, amounting to $1,800.

Lastly, the remaining $5,000 is then multiplied by 14%.

Total tax payable = ($30,000 x 10%) + ($15,000 x 12%) + ($5,000 x 14%) = $5,500

How to check property tax balance

1. Go to the IRAS website
2. On the bottom right hand corner of the screen you’ll see Ask Jamie, a virtual assistant, pop up
3. Select the e-Service “Check Property Tax Balance”

When to pay taxes

Your property tax will be due every year on 31 January 2021. Pro tip: Keep this date scheduled in your calendar. In case you forgot or missed the deadline, you’ll receive SMS reminders from IRAS. The text includes your property address, the outstanding tax amount and your property tax reference number.

Ways to pay property tax 

Payment will be updated immediately to your tax account:

• AXS (stations, website or through the app) 
• SAM (kiosks, website or through the app)

Payment will take up to 3 working days to be updated to your tax account:

• NETS at any post office counter 
• Internet banking with DBS, POSB, UOB or OCBC
  • Select ‘Bill payment’ 
  • Remember to include your property tax reference number

As this will take some time to reflect in your account, this method of payment is not advisable if you’re late or dangerously close to the deadline.

Alternatively, you can sign up for GIRO

You can choose from one GIRO deduction every year or 12 interest-free monthly instalments. 

All you need to do is sign up and get instant approval via:

• myTAX Portal (for POSB, DBS and OCBC)
• Internet Banking (for POSB, DBS, OCBC and UOB)
• AXS stations (for POSB and DBS)

Credit cards

Tax payment is a great opportunity for you to put your credit cards to good use by capturing rewards, miles and/or cashback – especially if you’re doing it via credit card payment facilities such as CardUp or Citibank’s PayAll. Don’t let ‘expense-turned-savings’ like this slip through your fingers!

What happens to late tax payments

If you missed the 31 Jan deadline: you may incur a late payment penalty of 5% on the unpaid tax

If there’s new assessments or re-assessments: you have one month to make the tax payment from the date stated on the bill 

If the assessment is revised: you’ll be refunded any excess payment 

Do note that even if you’ve filed an objection or you’re waiting to see the results of the assessment, you’re still required to make the tax payment before the 31 January deadline.

Handy list of important links

• IRAS’s virtual assistant Ask Jamie
• Property tax balance
• Property tax calculator 
• GIRO application forms and claims forms to download 
• If you’re not sure whether you’re eligible to pay owner-occupied property tax, you can find out here

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