Singapore Budget 2009 – Property Tax

Property Tax Rebate for Commercial and Industrial Properties

Currently, owners of commercial or industrial properties are required to pay property tax on the annual value (AV) of the property, which is at 10% per annum and is payable regardless of whether the properties are let, vacant or for own usage.

With the intention of helping commercial and industrial operators to lower their business cost, the Minister has proposed to give 40% tax rebate on property tax for commercial and industrial properties for calendar year 2009. The Minister has also strongly encouraged landlords to pass down the rebate to their tenants.

Property owners will be notified of their revised property tax assessments between April to July 2009.

Property Tax Rebate for Owner-occupied Residential Properties

Currently, owners of owner-occupied residential properties enjoy the following:

• on-going property tax rebate which was given since 1994, when the GST was introduced; and
• the additional property tax rebate of up to $100 for the year 2008 and 2009 which was given as part of the 2007 GST Offset Package.

The Minister proposed a one-off 40% property tax rebate be given for owner-occupied residential properties for the calendar year 2009.

Property Tax Deferral for Land Approved For Development

Presently, land owners are required to pay property tax in advance in January every year for the whole calendar year.

With the intention of helping commercial and industrial operators to ease cash-flow to develop vacant land, the Minister has proposed to defer property tax for up to two years for land with valid Written Permission (WP) or Provisional Permission (PP) from Urban Development Authority, and where the land sites are owned by companies.

As this is a tax deferral, the deferral will expire on 21 January 2009, or upon Temporary Occupation Permit, or upon expiring of the WP / PP (i.e. if the WP / PP is not renewed), or upon transfer of the property, whichever is the earliest.

The deferral will take effect from 22 January 2009 or from the date of issue of WP or PP, whichever is later.

Deferment of Increase in Assessment Rate for Hotel Rooms

Currently, the property tax assessment rate for hotel rooms was due to increase to 25% from 20% with effect from 1 January 2009.

To help hoteliers in these uncertain business conditions, which have severely affected the tourism industry, the Minister has proposed to defer the property tax assessment for the calendar year 2009 and the tax will remain at the current rate of 20%.