9 September 2013

The Ministry of Finance (MOF) rejected all eight suggestions received on the draft Property Tax (Amendment) Bill 2013 during the public consultation held from 25 July to 14 August 2013, as they were incompatible with the policy intent of the proposed amendments.

Comments were sought for the following tax changes:

• Do away with property tax refunds for vacant properties;
• Clarify the definition of residential and non-residential properties for the purpose of introducing a progressive tax structure; and
• Extend the deadlines for filing objections and appeals on tax assessments.

Six of the eight suggestions received concerned the removal of tax refunds. These include:

• Lowering the property tax rate or allowing the vacancy refund but limit the claim period for commercial and industrial property owners whose premises are unused;
• Permitting vacancy refunds for unoccupied dwellings of Singaporeans who are overseas for work or charitable reasons; and
• Delaying building assessment for property tax until a project achieves a certain occupancy rate or two years after obtaining the Temporary Occupation Permit, whichever is earlier.

The MOF dismissed the above propositions on the grounds that property tax is a tax on ownership and should be levied regardless of whether the property is used or not.

Another idea submitted was to tax rental income at a higher rate. The MOF replied that this was already the case with our progressive income tax structure, since an individual pays more taxes as his total earnings, including rental income, increases. Moreover, a higher property tax rate is also levied on non-owner occupied homes.

Source: Ministry of Finance