Property Tax Rates in Singapore
Property tax is a tax on properties in Singapore. Properties such as HDB flats, factories, offices and vacant land are subject to tax. The rule is if you or your business owns property, you must pay property tax.
The tax rate for owner-occupied residential property is 4% per year and for all other properties is 10%.Property tax is payable by 31 January every year.
IRAS computes the annual tax payable and sends you the bill in December.
Instructions of payment on property tax are included in your bill. To help keep taxes affordable and to encourage certain types of land development and meet business needs, the Government gives out rebates, reliefs and refunds to property owners.
A building is exempt from property tax if it is used exclusively:
· as a public place of worship
· as a public school
· for charitable purposes
· for purposes that promote the social development of Singapore
Property tax is payable to the government. It is s imposed on immovable properties and payable in advance each year or by monthly direct debit. Owner-occupied residential properties are taxed at a concessionary rate of four percent of the annual value. The prevailing property tax rate for industrial, commercial and let-out residential properties is ten percent. If a building is demolished, the land is assessed at five percent of the market price of the land.
Tax on rent income from a property
Tax is payable on rental income of a property to the government. The owner of the property who receives the income is responsible for declaring and paying this tax, regardless of whether they are resident in the property. The total rent received from the tenant must be declared. Total rent includes charges on the property, the furniture and fittings and service charges.
Expenses can be claimed against rental income on the property though expenses incurred outside the period of tenancy cannot usually be claimed. The total rent and deductible expenses claimed must be reported when filing income tax returns. Tax will be calculated on the net rent, which is the total rent less total deductible expenses. Supporting documents do not need to be submitted but must be kept for seven years.
The following are deductible for tax purposes:
* interest on a mortgage loan
* property tax
* fire insurance on the property
* commission paid on getting a subsequent tenant
* cost of renewing a lease or getting a new tenant (except for the first tenant)
* repairs and maintenance, which may include painting, pest control, and monthly maintenance charges to management corporations
The following are NOT deductible for tax purposes:
* mortgage or bank loan repayments
* agent's commission, advertising, legal costs for getting the first tenant
* depreciation of furniture and fixtures
* costs of renovation, additions, and alterations to the property, for example extension or car porch
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