Property Tax on Residential Property

1. What is property tax?

Property tax is an asset tax levied on property ownership. It is not a tax on rental income. It is thus levied on the ownership of properties, irrespective of whether the property is occupied or vacant.

2. How is property tax calculated?

The property tax is calculated by multiplying the Annual Value (AV) of the property with the prevailing property tax rate.

Annual Value (AV)

This AV of a property is determined based on market rentals of similar or comparable properties. What this means is that if you own a five-room flat in Toa Payoh, the Inland Revenue Authority of Singapore (IRAS) looks at similar five-room flats in Toa Payoh and how much they are rented out at, to determine the Annual Value.

Property Tax rates

We have progressive property tax rates for residential properties - the higher the value of the residential property, the higher the tax rate. The tax rate is also dependent on whether it is owner-occupied or otherwise.

In Budget 2022, to enhance the progressivity of our residential property tax regime, we raised the property tax rates for higher-value owner-occupied residential properties and all non-owner-occupied residential properties. The increases in property tax rates were implemented in two steps, over 2023 and 2024. In addition, further changes to the Annual Value (AV) bands for owner-occupied residential property tax rates were announced in Budget 2024, which took effect from 1 January 2025. Please refer to details below. 

Owner-Occupied Residential Properties

Owner-occupied residential properties enjoy lower concessionary owner-occupier residential property tax rates, as compared to non-owner-occupier property tax rates. 

The AV bands for the owner-occupier residential property tax rates were adjusted from 1 January 2025 to account for significant increases in residential AVs over the past few years. With the revision of the first AV band from $8,000 to $12,000, all one- and two-room HDB flats will continue not to pay PT in 2025. All other HDB flats will continue to be taxed at the marginal tax rate of 4% (for the portion of AV above $12,000). The property tax rates for owner-occupied residential properties with effect from 1 Jan 2025 are shown in Table 1:  

To help cushion PT increases for Singaporeans, the Government will provide a one-off Property Tax (PT) rebate of 15% for Owner-Occupied HDB flats, and 10%, capped at $500, for Owner-Occupied private residential properties in 2026.

Non-Owner-Occupied Residential Properties

(This refers to residential buildings which are not owner-occupied and does not include residential land.)

Non-owner-occupied residential properties are taxed at higher property tax rates as they are mainly investment properties and could be rented out for rental income. The property tax rates for non-owner-occupied residential properties, with effect from 1 Jan 2025, are shown in Table 2: 

For other non-owner-occupied residential properties (e.g. properties held by deceased owners) or more information on owner-occupier tax rates, please refer to the IRAS’ website.

3. When and how do I pay property tax?

Property tax is payable yearly in advance. At the end of each year, you will receive your property tax bill for the following year and payment is due on 31 Jan. For ad-hoc property tax notices issued by IRAS, payment is due one month from the date of notice.

You are encouraged to join GIRO to enjoy up to 12 interest-free monthly instalments or opt for a one-time deduction. You can also choose digital payments such as PayNow QR and AXS using your property tax reference number.

For more information on property tax payment, please refer to IRAS' website.

4. Why does my Annual Value change over the years?

The AV of properties are pegged to the market rents of comparable properties and IRAS reviews the AVs of residential properties annually. Depending on the rental transactions of comparable properties in the year of review, AVs may be revised upwards, downwards, or maintained.

5. Why do I have to pay property tax on my home when I am an owner-occupier and not deriving rental income?

Property tax is based on property ownership and therefore is levied regardless of whether the property is owner-occupied, vacant or rented out. However, to encourage home ownership, owner-occupied residential properties are taxed at lower concessionary tax rates.

For more information on the concessionary owner-occupier's tax rate, please refer to IRAS' website.

6. I rent out my residential property and have to pay tax on my rental income and on the property. Am I being taxed twice?

These are different taxes.

Property tax is an asset tax imposed based on property ownership. It applies whether the property is occupied by the owner, rented out or left vacant. All properties are assessed for the annual property tax. 

Income tax is a tax imposed on all income earned or received in Singapore, including the rental income earned from renting out your property. You may claim the property tax paid on the rented-out property as an expense. The amount of income tax payable depends on the individual’s total annual income, the amount of personal income tax reliefs/rebates claimed, and the personal income tax rate schedule which includes an exemption of the first $20,000 of one’s annual income.

For more information on property tax, please refer to IRAS' website.

7. Why not use Capital Value to estimate Annual Value for property tax calculation?

In Singapore, we use rental transactions of comparable properties to determine the AV of the property for the purpose of property tax, for two reasons.

First, there are generally more rental transactions than sales transactions, to allow AV to be determined for each property based on comparable properties. Second, movements in sale prices are more volatile than rentals. Hence, using rental transactions to derive the AV helps to keep property tax more stable for property owners.

This practice of using market rents to determine the AV is also adopted by other jurisdictions, like Hong Kong and Malaysia.

8. How else do we tax wealth?

The Singapore Government taxes wealth through the property tax, stamp duty, and additional registration fee for motor vehicles. The higher value the residential property or motor vehicle, the higher are such collections.

We will continue to study how we can strengthen our current system of wealth taxes. However, many forms of wealth are mobile, and as long as there are differences in wealth taxes across jurisdictions, such wealth can and will move. Any tax must therefore be effective and cannot be avoided easily, to be a good long-term solution.