MOF rejects property tax feedback

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

MOF conducts public consultation on changes to the Property Tax Act

26 July 2013

The Ministry of Finance is seeking feedback on the draft Property Tax (Amendment) Bill 2013 relating to changes announced in the 2013 Budget Statement. This exercise will be conducted from 25 July to 14 August 2013.

The proposed amendments include the removal of property tax refund for unoccupied residential and non-residential dwellings, effective 1 January 2014. This is in agreement with the policy intent of taxing property wealth rather than use. It is also consistent with the tax treatment of all vacant properties.

Another key change is the introduction of progressive property tax rates for residential properties from 1 January 2014. Additionally, the Bill extends the deadline for filing objections and appeals on property tax assessments from the current 21 days to 30 days.

For full details, please refer to the Ministry of Finance’s website or the REACH consultation portal.

Source: Ministry of Finance