Property tax rebate in 2025; most homeowners will see their tax bill reduced, Latest News from Singapore

A one-time property tax reduction will be given to all owner-occupied homes in 2025, a move the government says will ease homeowners’ concerns about the cost of living.

Housing Board-occupied apartments will receive a 20 percent discount, while private owner-occupied residential properties will receive a 15 percent discount – capped at $1,000, the Ministry of Finance said ( MOF) and the Inland Revenue Authority of Singapore in a joint agreement. statement of November 29.

The reductions, along with changes to the annual value bands for owner-occupied homes that will come into effect from 2025, will mean all of these HDB flats and more than 90 percent of these private residential properties will see a lower tax bill in 2025.

The government previously announced in Budget 2024 that it would increase the annual value bands for owner-occupied housing from January 1, 2025.

Property tax is calculated based on the annual value of a property, which is the estimated rent a property can earn in a year if rented out. Annual values ​​have increased in line with social housing market rents, which have been increasing since 2022.

As part of these changes, the zero percent annual tax value threshold for owner-occupied homes will increase from $8,000 to $12,000 on January 1.

This means that in 2025, all one- and two-room HDB flats will continue to be exempt from property tax. For other HDB flats, property tax will continue to be calculated at the marginal rate of 4 per cent for the annual value share. above $12,000.

The one-time rebate will automatically offset any property tax payable.

Mr Eugene Lim, managing director of real estate agency ERA Singapore, said the one-off property tax reduction could be a welcome move by the government that will help cover costs, but it should not have a significant impact.

“This 15 to 20 per cent reduction could be a (quick) interim measure to help Singaporeans alleviate their cost of living concerns,” he said.

At the same time, the annual value threshold used to assess eligibility for social assistance schemes will also be increased from January 1, 2025.

The review will extend benefits to those living in more than a million residential properties, the Department of Finance said.

Currently, various government social support programs provide tiered benefits to ensure that Singaporeans with greater needs receive more support.

These programs include the GST Voucher Scheme, MediShield Life Premium Subsidies and the Workfare Income Supplement Scheme.

Alongside criteria such as income, the annual value of an individual’s residential property can be used as an indicator of resources.

Under the current system, benefits are divided into two tiers: properties with an annual value of up to $21,000 and those between $21,001 and $25,000.

From January 2025, the annual cap value of the second tier will be increased to $31,000, while the first tier will remain unchanged.

The first level will continue to cover all HDB flats.

With the revised second tier, more than three out of four residential properties, including lower-valued private properties, may be eligible for social benefits, the Finance Ministry said.

For example, under the new threshold, a resident living in a property with an annual value of $27,000 will still be eligible for GST voucher cash payments in 2025, which would not have been possible without the adjustment .

The Department of Health, which uses annual value, alongside per capita household income, to determine eligibility for grants and financial assistance, said any changes to grants or assistance resulting from changes in value annual benefits will automatically be extended to its health care plans.

These subsidies cover a wide range of services, including specialist outpatient care, inpatient, outpatient and polyclinic drug costs, as well as various health care premium subsidies.

Existing Chas (Community Health Assist Scheme) cardholders who are eligible for a Chas card with higher grants after the annual value review will automatically receive a new one after 1 January 2025. No action is required from the from individuals.