Introduction

Property tax is imposed under the Property Tax Act on immovable properties and is payable in advance each year. The tax payable in respect of a property is computed by applying the applicable tax rate to the annual value of the property.

Annual value is the estimated annual rent a property can fetch if it were rented out. In determining the Annual Value of a property, IRAS will consider the rentals of similar properties in the vicinity, size and condition of the property, and other relevant factors. The annual value is determined in the same manner regardless of whether the property is let-out, owner-occupied or vacant.

The annual value of the land is determined at 5% of the market price of the land. When a building is demolished, the land would have to be assessed by this method.

The prevailing property tax rate for industrial, commercial and let-out residential properties is 10%. Owner-occupied residential properties are taxed at a concessionary rate of 4% of the annual value.

Property Tax Exemption

Section 6(6) of the Property Tax Act provides that all buildings or parts of buildings used exclusively for these purposes shall be exempted from property tax.

a)  as places for public religious worship

b)  for public schools which are in receipt of grants-in-aid from the Government

c)  for charitable purposes

d)  for purposes conducive to social development in Singapore