New property tax rate for owner-occupied residential properties

You may already have read about the above revealed in Monday's Budget 2010. But for the sake of those who have not:

Current Treatment
Currently, owner-occupied residential properties are taxed at a concessionary 4% rate (instead of 10% for all other properties).
In addition, owner-occupied residential properties with annual values (AVs) below $10,000 can enjoy the on-going 1994 property tax rebates ranging from $25 to $150, depending on the Avs of their properties.

New Treatment
For property tax payable from January 2011, the 1994 property tax rebates will be replaced by a progressive property tax schedule for owner-occupied residential properties:

• 0% for the first $6,000 of AV
• 4% for the next $59,000 of AV
• 6% for the balance of AV in excess of $65,000

Non-owner-occupied residential properties and other properties will continue to be subjected to 10% property tax.

The Annual Value (AV) is the estimated annual rent of a property, excluding the rent for furniture, fittings and service charge. The Inland Revenue Authorities of Singapore determines the AV of a property by analysing rents of similiar properties. According to a property consultant, a property with $65,000 AV would probably be worth around $2.5 million to $3 million currently.

In summary, with the new property tax treatment come 2011: The more expensive your property, the higher the property tax you can expect to pay - sounds fair to us.

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