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Increases in residential investment property taxes in the coming year

Increases in residential investment property taxes in the coming year

As a result of rising yearly values (AVs) and market rentals of Treasure at Tampines, the government declared on November 30 that most residential properties will see a rise in their property taxes in 2024.

Treasure at Tampines Floor Plan which are considered higher-value private residential homes, will see an increase in their property taxes.

In contrast, homeownership will be able to recoup some of the cost of the tax hikes through refunds.

According to Lee Sze Teck, senior director of data analytics at Huttons Asia, AVs for private residential properties rose by 29.7 percent in 2022 and for HDB flats by 28.5 percent. This resulted into higher AVs for 2023. In 2023, he says, property taxes were higher because of the increased AVs.

In contrast, HDB rents increased by 8.3% between January and October 2023, while private property rents rose by 11.1% during the same time period. “This points to further increase in AV for 2024 even though rents have shown signs of softening in 4Q2023,” Lee adds.

Homeowners should get ready to pay more in property taxes in 2024 because the rates are going up.

Nevertheless, the government is taking action to alleviate the increasing cost of living. Tax rebates for owner-occupied HDB flats range from 30% to 100%, while private property owner-occupants can expect a maximum of 15% or $1,000.

“The clear distinction of rebates for owner-occupied properties and no rebates for non-owner occupied properties reflects a progressive tax system,” according to Huttons’ Lee. “The well-to-do population will be taxed more, and the taxes collected will be used to provide assistance to those who need it more.”

Lee claims that the possibility of capital appreciation more than compensates for the rise in property tax, making residential property investment in Singapore an attractive proposition.

In addition, Lee brought attention to the fact that Budget 2022 announced a rise in property taxes for residential properties that are not owned or occupied by their owners. However, the treasure at Tampines price list continued to rise in 2022, gaining 8.6 percent. So, according to Lee, investing in residential property in 2024 will not be significantly affected.

“The combined effect of these factors may help prevent a potential escalation of property prices,” according to her. “As buyers turn more cost-conscious, developers may also be more measured in their land bids, which will help to prevent land bid prices from escalating further.”

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