Budget 2022: Luxury cars subject to heavier tax

Luxury cars will be taxed at a higher rate, with a new Additional Registration Fee (ARF) tier for cars at a rate of 220 per cent for the portion of open market value (OMV) in excess of S$80,000.

Presently, the ARF is tiered at 100 per cent of the OMV for the first S$20,000; 140 per cent of the OMV for the next S$30,000; and 180 per cent of the OMV in excess of S$50,000.

Under the new tax rate, the ARF is tiered at 100 per cent of the OMV for the first S$20,000; 140 per cent for the next S$30,000; 180 per cent for the subsequent S$30,000 and 220 per cent for the amount in excess of S$80,000.

The new rates will apply to all cars registered with certificates of entitlement (COEs) obtained from the second COE bidding round this month. The additional ARF is expected to generate an additional S$50 million in revenue annually.