From January 1 next year, the Inland Revenue Authority of Singapore (Iras) will be raising the Annual Values (AVs) of all HDB flats. This translates to an increase in property taxes for 2010.

In line with this, all Housing Board owner-occupiers will be given a one-off property tax rebate of up to $120 to help mitigate the increase.

Iras, which reviews the AVs of all properties, including HDB flats, annually to ensure they reflect prevailing market rental values, said it will raise the AV of all HDB flat types as current values of HDB rentals and resale prices are 'significantly higher than levels observed in 2007'.

The last such revision for HDB flats was done two years ago on Jan 1 2008, based on rental values in 2007.

AVs for HDB flats were not revised on 1 January 2009, notwithstanding that HDB rentals had increased significantly (by between 31% and 37%) in 2008 relative to 2007. The adjustment in AVs was deferred in view of the uncertainty in market rental trends in the midst of the economic recession. There was evidence of declines in rental values from late 2008, with the risk of further significant declines in 2009 given the negative economic outlook at the time.

HDB rentals have stabilised after a moderate decline from late 2008 to the middle of 2009, and have since begun to rise. As a result, current values of HDB rentals, as well as HDB resale prices, are still significantly higher than levels observed in 2007. The AVs of HDB flats will therefore have to be adjusted.

New 2010 Property Tax Rebate for HDB Owner-Occupiers

There are two existing property tax rebates; the $100 rebate and the 40% rebate that were provided as part of Budgets 2007 and 2009 respectively. They are both scheduled to expire in 2009.

To help HDB homeowners adjust to the January 2010 AV increase, the Government will grant a new property tax rebate to all HDB owner-occupiers for property tax payable in 2010. This new rebate granted to HDB owner-occupiers will apply to property tax payable in 2010 after deducting the 1994 GST Rebate[2], which is available to all residential property owner-occupiers.

The new rebate is set at 50% of the property tax payable, and capped at $120.

Property Tax Changes for HDB Flat Owners

With the new property tax rebate for HDB owner-occupiers and the ongoing 1994 GST Rebate, all 1- and 2-room HDB owner-occupiers will continue to pay zero property tax in 2010.

For average 3-room HDB owner-occupiers, the increase in property tax in 2010 after deducting the special rebates will be $72 for the year as a whole. For 4-room HDB owner-occupiers, the average tax increase will be $97 for the year as a whole. For 5-room HDB owner-occupiers, the average tax increase will be $107 for the year as a whole, and for Executive HDB owner-occupiers, $103.

Property Tax for 2010 is payable by 31 January 2010

IRAS encourages HDB flat owners to join the GIRO payment scheme to enjoy up to 12 interest-free monthly instalments.

The GIRO application forms can be downloaded from www.iras.gov.sg and the average processing time is two weeks. Customers of DBS/POSB and OCBC can also apply for GIRO online via Internet Banking. Alternatively, taxpayers are encouraged to pay via eNETS, Internet Banking, AXS, ATM, S.A.M™, Singapore Post, vPOST or Phone-Banking. Cheques/Cashier's Order may be addressed to The Comptroller of Property Tax (55 Newton Road, Singapore 307987).

Information on payment modes and details of property tax and AV revision are available at www.iras.gov.sg. Taxpayers with enquiries may email IRAS at propertytax@iras.gov.sg or call 1800-356 8300.