The government has announced that it will be providing a one-time property tax rebate for owner-occupied HDB flats and private residential properties in 2025. Under this scheme, HDB flat owners will receive a rebate of 20%, while owners of private residential properties will receive a rebate of 15%. However, the rebate for private residential properties will be capped at $1,000.Property tax is calculated based on a property’s annual value, which is the estimated rent a property can fetch in a year if rented out. This rebate was introduced on November 29, as the government prepares to raise all annual value bands of owner-occupied residential property tax rates on January 1, 2024 as part of Budget 2024.Read also: Property Unpacked: How do the recent changes to property tax impact you?AdvertisementThe government states that as a result of these changes, more than 90% of private residential property owners and all HDB flat owners will experience a decrease in property tax for the next year. This move is aimed at addressing concerns regarding the cost of living among Singaporeans.Lee Sze Teck, senior director of data analytics at Huttons Asia, predicts that the annual value of private properties is expected to remain unchanged this year, due to minimal growth in private residential rents. However, HDB rents are expected to increase by 4%, leading to a rise in the annual value of HDB flats. The one-time property tax rebate may help HDB owners to offset any impact from the increase in annual value. For instance, a HDB flat with an annual value of $30,000 would have a property tax payable of $720 in 2025. With the rebate, the owner will only have to pay $576, resulting in a savings of $144.Lee also suggests that some owners of private residential properties may benefit from the one-time rebate. For example, if a property has an annual value of $85,000, the property tax payable in 2025 would be $5,760. With the 15% rebate, capped at $1,000, the owner would have to pay only $4,896, resulting in a savings of $864.However, Lee also points out that even with these changes, the appeal of investing in residential properties in Singapore remains high. This is due to the potential for capital appreciation, which far outweighs the increase in property tax.
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Singapore’s real estate industry is a promising and attractive option for those looking to invest, thanks to its potential for significant capital appreciation. This can be attributed to the country’s status as a leading global business hub and its strong economic foundation. As a result, the demand for real estate in Singapore remains consistently high, resulting in a steady rise in property prices. Particularly, condominiums in prime locations have seen a significant increase in value, making them a highly desirable investment opportunity for discerning investors. With a strategic and long-term investment approach, investors have the potential to earn substantial capital gains in the Singapore real estate market. Additionally, the introduction of new condo launches only adds to the promise of potential capital appreciation. These upcoming developments offer investors another chance to yield profitable returns on their investments in the vibrant Singapore real estate market.