Just a few weeks ago, homeowners across Singapore received some welcome news—a one-off property tax rebate for the 2025 tax season. The rebate applies to all homeowners, regardless of property type, and translates to a lower property tax bill for the year. After all, who enjoys paying taxes, right?
Here’s everything you need to know about the recent announcement and a quick refresher on how property taxation works.
One-off Property Tax Rebate for 2025
Image credit: Unsplash – Anatoliy Shostak
Announced by MOF and IRAS, homeowners can enjoy up to 20% in property tax rebates for the 2025 cycle. The rebate will be automatically applied to eligible properties and reflected in the 2025 Property Tax Bill issued from December 2024 onwards. Here’s the breakdown based on property type:
- HDB flats: Flat 20% rebate, uncapped.
- Private properties (condos or landed homes): 15% rebate, capped at $1,000.
Think of it as a discount off your overall property tax bill!
How Is Property Tax Calculated?
To better understand how this initiative works in the overall scheme of things, here’s a quick refresher on how property taxation works.
Contrary to what some might believe, property tax isn’t a flat charge every year. In fact, it more often than not changes every year, depending on a couple of factors that goes into the calculation of how much tax is levied. Essentially, the formula to bear in mind is:
Property Tax Payable = Annual Value (AV) x Property Tax Rate
Annual Value (AV)
According to IRAS, the AV of a property is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees. It is determined based on estimated market rentals of similar or comparable properties, taking into consideration factors such as the size and location of the property. Of course, the AV is not a static number – in fact, IRAS reviews the AVs of properties on a yearly basis, to reflect the changes in the market rental values of comparable properties!
To check the AV of your property for the current year and preceding four years, you can simply login to your Tax Portal on the IRAS website. To give you a sense of how rental rates are going for comparable properties, you can also check out the HDB website for rental rates of HDB flats, and the URA website for rental rates of private residential properties.
Of course, there is also an option for homeowners to appeal the valuation of their properties. According to IRAS, you can object to the AV and/or its effective date within 30 days from the date of the Valuation Notice. If you do not receive the Valuation Notice, you can also object to the AV at any time in the year if you can show that the market values have dropped to below the AV.
Property Tax Rate
Property tax rates are progressive, applied to specific bands of AV. For 2024, the rates are:
- First $0 – $8,000: 0%
- Next $8,001 – $30,000: 4%
- Next $30,001 – $40,000: 6%
- Next $40,001 – $55,000: 10%
- Next $55,001 – $70,000: 14%
- …and so on, up to a maximum rate of 32% for AV above $100,000.
Changes to AV Bands for 2025
During Budget 2024, the government announced revisions to the AV bands, effective 1 January 2025. Here’s the updated structure:
- First $0 – $12,000: 0%
- Next $12,001 – $40,000: 4%
- Next $40,001 – $50,000: 6%
- Next $50,001 – $75,000: 10%
- Next $75,001 – $85,000: 14%
- …and up to a maximum rate of 32%, now applied to AV exceeding $140,000.
The changes expand the 0% tax rate band from $8,000 to $12,000 and increase the top band threshold from $100,000 to $140,000, reducing the tax burden for many property owners.
Overall lower property taxes for 2025
Together with the revised AV bands, the one-off property tax rebate in 2025 will mean that most of us will be seeing lower property tax payable for 2025. Hurray!
According to MOF and IRAS, all owner-occupied HDB flats and 90 per cent of owner-occupied private residential properties will see lower property tax in 2025 as a result of the recent announcement, thus helping many Singaporeans mitigate cost-of-living concerns.
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Cover image adapted from: Unsplash
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