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Singapore Budget 2013: More progressive property tax rates for Singaporean households

To make the tax system more progressive, the Government is raising property tax rates for high-end residential properties in Singapore Budget 2013, with the largest increases applying to investment properties that are not occupied by their owners.

The majority of owner-occupied homes will have lower tax rates in Singapore Budget 2013.

“This is fair,” said Minister of Finance Tharman Shanmugaratnam in his Singapore Budget 2013┬áspeech on Monday.

“The property tax is a wealth tax and is applied irrespective of whether lived in, vacant or rented out. Those who live in the most expensive homes should pay more property taxes than others.”

Owner-occupied residential properties
owner-property-tax-Singapore
Source: Ministry of Finance

The new property tax schedule for owner-occupied homes will ensure that most retirees will end up paying lower property taxes, he added.

The number of households that do not have to pay property tax will rise. Currently, only those whose houses have an annual value of $6,000 or less do not have to pay property tax. This will now include those whose properties have an annual value of $8,000 or less, which will enable 950,000 owner-occupied homes to enjoy tax savings.

After this Singapore Budget 2013, all one- and two-room HDB flats will continue to pay no property tax. Homes with annual values of $12,000, such as a five-room flat, will experience tax savings of $80 or 33 per cent of their current property tax bill.

The top 1 per cent of owner-occupied homes, which includes 12,000 homes here, will face increased taxes.

However, the increase will be small, Mr Tharman said, except for those at the very top end. A landed property in the central area with an annual value of $150,000 will have to pay 15 per cent tax in 2014, or an increase of $5,120 per year, up from 10 per cent now.

There will be more significant hikes to the tax rates for high-end investment properties. Currently before Singapore budget 2013, residential properties that are not occupied by their owners have a flat tax rate of 10 per cent. There will be new marginal tax rates of 12 to 20 per cent for these investment properties.

This will mean an increase in property taxes paid for non-owner-occupied homes with annual values of above $30,000. These properties belong to the top one-third of all non-owner-occupied homes.

Non-owner-occupied residential properties
non-owner-property-tax
Source: Ministry of Finance

Again, the increase will only be significant for investment properties at the high end. Most suburban condominiums will see a small increase in property tax of about $100 to $300 a year.

With Singapore Budget 2013, a high-end property, such as a landed home in the central area with an annual value of $150,000, will see an increase in property tax of $9,000 a year.

This revised property tax structure will be phased in over two years, from Jan 1, 2014.

The revised rates will take full effect from Jan 1, 2015.

Property tax rates for non-residential properties remain unchanged at a flat 10 per cent for Singapore Budget 2013.

Big makeover for Defu Industrial Estate

More potential rental demand in the Bartley / Kovan / Hougang / Old Tampines Road areas! Look out for more upcoming launches...

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The Government has identified Defu Industrial Estate for redevelopment as part of HDB’s ongoing Industrial Redevelopment Programme (IRP). Under the Defu Master Plan, the area will be transformed along the vision of ” A Green and Sustainable Industrial Park of Tomorrow”, and be renamed Defu Industrial Park.

Over the next 15 to 20 years, existing factories in Defu Industrial Estate will be progressively replaced with new and modern industrial complexes. The estate will be revitalised into a modern industrial park, complete with landscaped greenery and environmentally sustainable features.

Defu Industrial

The redevelopment of Defu Industrial Estate will be carried out in three phases. Phase 1, targeted for completion in mid-2017, will involve 219 out of the existing 1,046 factories. These include 87 land-based factories which are on 30-year leases, along with 42 land-based factories and 90 Terrace Workshops on Fixed- Term Tenancies.

HDB will build a new Bedok Food City at Bedok North Avenue 4 to rehouse the factories in the food industry. Factories in the general industries will be relocated to the new Defu Industrial City, which is located at the former Kim Chuan Water Reclamation Plant.

The estimated timeline for the 2 projects are as follows:
Activity Estimated Time Period
a) Design Consultancy 2013 to 2014
b) Construction 2015 to 2017

Industrialists in Defu Industrial Estate will be consulted on the design of the new complexes through a series of focus group discussions. HDB will actively involve them in the redevelopment through the Defu Manufacturers’ Association (DMA).

Eligible industrialists will continue to operate in their existing premises until the new complexes are completed in mid-2017. They will also be given relocation benefits such as rent concession, rent-free fitting up period, and ex-gratia payment.

Defu Industrial Estate is located in the North-Eastern sector of Singapore. It is bounded by Tampines Road, Hougang Avenue 3, Airport Road, and the Kallang-Paya Lebar Expressway (KPE).

The estate was built in the 1970s to house relocated small and medium local industrial enterprises from areas such a Jalan Lobak, Jalan Anggerek, and Jalan Pemimpin.

With the completion of Marina Reservoir and Punggol & Serangoon Reservoirs in 2010 and 2011 respectively, Defu is now located within the water catchment areas.

There is a need to redevelop this 30-year old estate to optimise the use of scarce land resources, and to contain the pollution caused by the existing industries.

With optimisation of land use, the total amount of factory floor space of the new Defu Industrial Park will be increased by five-folds to 2.1 million sqm. of industrial space, which will help meet Singapore’s future industrial need.

Defu Industrial Park will eventually house three key zones. The Northern and Central zones will be safeguarded for strategic industries such as logistics, precision engineering, infocommunications and media, electronics, clean energy and biomedical. The Southern zone will be set aside for new modern industrial complexes to house the existing industrialists.

Defu Industrial City

HDB will take into account the feedback from Phase 1 before embarking on future phases of development under the Defu Master Plan.

HDB will also develop a new Defu City Centre, which will be the focal point of commercial activities. Located just beside Defu Industrial City, it will provide a range of amenities such as F&B outlets, convenience stores, medical clinics and childcare centres. Construction will take place after 2017 when the site is available for development.

Four new sites released in November 2012

To provide developers and home-buyers with more choices for private housing, the Urban Redevelopment Authority (URA) and Housing & Development Board (HDB) are releasing four sites for sale in November 2012.

The two land parcels at Jurong West Street 41 (Parcel A) and Ang Mo Kio (AMK) Avenue 2 are launched for sale today under the Confirmed List. In addition, Parcel B at Jurong West Street 41 is also made available today for application on the Reserve List. The mixed commercial and residential site at Yishun Ring Road will be launched for sale by public tender on 27 November 2012.

Together, these four sites can yield about 2,045 residential units.

Land Parcel at Ang Mo Kio Ave 2

AMK Ave 2 | SGRealist.com

This site is located in an established residential area. The land site is at the intersection of Ang Mo Kio Ave 2 and Ang Mo Kio St 13. It is well connected to Central Expressway and Seletar Expressway. The future Mayflower MRT Station at Ang Mo Kio Avenue 4, part of the new Thomson Line to be completed in 2021, is located nearby.

Two Land Parcels at Jurong West Street 41

These two land parcels are located within an established residential area. They are well connected to major arterial roads and expressways such as Boon Lay Way, Pan Island Expressway and Ayer Rajah Expressway. In addition, Lakeside MRT Station is located nearby.

Land Parcel at Yishun Ring Road

Situated at the junction of Yishun Ring Road and Yishun Avenue 9, the site is in the midst of an established HDB town with many upcoming new public housing developments. It is located near the Yishun MRT station and well-connected to Central Expressway and Seletar Expressway.