THE annual value (AV) bands of owner-occupier residential property tax rates will increase from Jan 1, 2025, in a bid to keep up with market trends, Finance Minister Lawrence Wong said in his Budget speech on Friday (Feb 16).

The lower threshold will be raised to S$12,000, from S$8,000, while the highest band will be raised to over S$140,000, from over S$100,000, with corresponding adjustments made to the bands in between.

Homeowners can expect to pay the same or lower property tax bills at each of the band levels, assuming no change in their AV and before any rebate.

Here are some quick takes from analysts and observers on the latest announcement:

Mogul.sg chief research officer Nicholas Mak:

• “The increase in the property tax rates announced in Budget 2022 was meant to be a wealth tax. However, residential property rents have increased significantly in 2022 and 2023 due to strong demand and slower housing supply.”

• “This announcement will be welcomed by many affected homeowners. However, it will not increase housing demand because property tax is only a small part of the cost of owning a property. Furthermore, there is no reduction in the property tax rate for investment properties.”

• “This property tax adjustment can be deemed to be a small form of assistance to fight the rising cost of living for middle-class homeowners.”

ERA Singapore chief executive Marcus Chu:

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

• “Owner-occupier residential properties will pay lower property tax from 2025 with the higher AV band. The earlier tax was meant to be a wealth tax, but with AVs rising amid the surge in rents, owner-occupier residential properties were impacted by a significant jump in their property tax.”

• “This move will be a relief for the majority of homeowners. For example, a three-bedroom private apartment in the Outside Central Region with an annual value of S$40,000 can enjoy a property tax saving of S$360. This is a 24 per cent reduction compared to 2024.”

Huttons senior director of data analytics Lee Sze Teck:

• “The increase in the lower tax band which attracts zero per cent property tax from S$8,000 to S$12,000 will help owners who are staying in their properties.”

• “Owners may potentially see lower property taxes in 2025, but the impact is not likely to be significant as the AV for properties has increased significantly over the past few years. Most HDB flats will benefit from this change. There is no change to non-owner-occupied properties as property taxes are wealth taxes.”

OrangeTee Group chief researcher and strategist Christine Sun:

• “In the past, most properties had an AV below S$30,000, which meant that homeowners only paid 4 per cent property tax. However, due to the recent increase in rental prices, many homeowners’ AVs have crossed the S$30,000 mark, resulting in higher taxes for them. This has affected many people, especially those who did not benefit from the rental hike and felt that they were being unfairly penalised.”

• “Therefore, the changes are considered fair and beneficial for most homeowners, especially those who are not landlords. The adjustment of AV bands for 2025 is also timely because rental prices may not drop soon and may even remain stable for certain areas due to fewer expected completions of condos or residential projects this year.”

Deloitte Singapore tax partner Larry Low:

• “While annual values of properties have unexpectedly gone up due to market forces and the change in property tax regime has resulted in certain unintended consequences, the government keeps true to its word that property tax remains a wealth tax and has made the necessary adjustments to ensure only investment residential properties and higher-end owner-occupied properties would be impacted.”

BDO Singapore executive director of private client services Kylie Luo:

• “Recognising the ripple effect of inflated rents on property tax, the recalibration of AV bands indeed offers a beacon of relief for owner-occupied property owners. It empathises the strain on homeowners and alleviates their property tax burdens.”

Baker Tilly Consultancy (Singapore) partner, private client services tax leader Lee Vin Wee:

• “The adjustment to the lower and upper thresholds of the AV bands of owner-occupied residential property tax rates in Budget 2024 is a welcome move to alleviate cost-of-living concerns for most homeowners.” 

EY Asean private tax leader Desmond Teo:

• “Singapore takes a calibrated approach in wealth-related taxation. It is notable that Singapore is prepared to refine its property tax regime to remain targeted at the top 7 per cent of owner-occupied residential properties and alleviate unintended tax burden on the broader population due to the recent unanticipated rental increases.”

For more of BT’s Budget 2024 coverage, go to bt.sg/budget24