With an aim to promote home ownership, an HDB flat that is occupied by its owner will be taxed at owner-occupier tax rates that are significantly lower. As an HDB flat owner, you’ll receive your property tax bill either in the month of November or December for the property tax you need to pay in the upcoming year. You’re liable to make your property tax payment annually within 31 January.
The property tax amount you’re liable to pay will be computed by multiplying your property’s AV (Annual Value) with the current property tax rate.
If you’re residing in an HDB flat you own, you don’t have to pay tax for the initial S$8,000 from the Annual Value (2014 onwards). Rest of the Annual Value will face taxation at 4% which corresponds to the lowest tier.
An HDB flat that is not occupied by its owner will face taxation at 10% of its Annual Value since its AV is not more than S$30,000.
Annual Value of HDB Flats: The assessment of HDB flats is done by IRAS wherein the rental rates of the several room types in recent times are analysed. IRAS can access the rental rates data by using the e-stamping documents.
Mostly, room types of bigger size charge rental rates that are higher in comparison to room types that are smaller in size and are located in the same vicinity. Whereas, an HDB flat which is placed within a central location will charge a higher rental rate when compared to a flat which is situated in an outlying location. The Annual Value of an HDB flat will depend on where it is located and the type of rooms it has.
In less than 1 year of occupying your flat, you’ll be receiving a Notice of Valuation from IRAS which will intimate you regarding two things:
You need to make your property tax payment in less than 30 days from when you received your PT bill.
In a period of 1 year from the TOP (Temporary Occupation Permit) date, you will receive an IRAS Valuation Notice informing you about 2 things:
You should pay your property tax amount within a period of 30 days starting from when you got your property tax bill.
When the property transfer is in progress, the division of dues with respect to property tax will be a private settlement between your vendor/developer and yourself (purchaser). You can get in touch with your developer depending on your contract’s terms and conditions.
Verify to see if there is any pending property tax payment that needs to be made: After a property transfer is done, you’ll be held responsible for any pending property tax payment inclusive of any arrears which actually had to be cleared by the prior property owner. Hence, it is critical that either your legal advisor or HDB officer confirms with IRAS that there is no pending property tax payment that needs to be made.
For an HDB flat which is newly built, you’ll be charged with property tax starting from the day on which you occupied the flat. However, for a DBSS flat, tax charges will commence from the TOP (Temporary Occupation Permit) date.
Divide property tax amongst the seller and yourself: In case there is a pending tax amount that needs to be settled, either your lawyer or HDB officer will help you with clearing the outstanding tax amount with your seller. Your lawyer/HDB officer will also divide the ongoing year’s tax amount amongst you and the seller. IRAS will not divide the liabilities in relation to property tax amongst the concerned parties involved.
Your ownership record will be updated depending on the details submitted by you: You don’t have to intimate IRAS regarding the HDB flat transfer, the Housing and Development Board will keep IRAS informed about the same. Also, the ownership details will be updated by IRAS based on the information you’ve provided. This is done for property tax related reasons.
IRAS intends to communicate (payment-related or other correspondences) with the property owner who is listed as the primary (main) applicant in the flat purchase document. In case there are specific preferences amongst the property owners on whom IRAS needs to communicate with, he or she needs to mandatorily register his or her name as the chief (main) applicant.
Your address needs to be updated: You’ll receive your Property Tax Bills and any other notices on the address that is mentioned as per your ID card. Hence, it is important that you’ve updated your correct address so that you don’t miss receiving any correspondences from IRAS.
Owner-occupier property tax rates will be applied automatically: If you’re the owner of a residential property and you’re residing in it, you’ll qualify for lower tax rates with respect to your property. Also, there is no need for you to submit a separate application for owner-occupier tax rates since these tax rates will be applied automatically.
Find out the property tax amount you’re liable to pay: You can calculate your due tax by multiplying your property’s AV (Annual Value) with the property tax rates that are applicable to you. You can make use of the calculator available on the IRAS website.
Make an arrangement to make your property tax payment: You can make your property tax payment via different modes. With the GIRO option, you can make interest-free payments on a monthly basis for up to 12 months. Other options include GIRO deductions (one-time), internet banking, phone banking, NETS, credit cards, and more.
The Housing and Development Board offers a policy to you (a seller) according to which you can extend your stay for a 3-month period (default) after you’ve sold your flat to a new owner. In case you’ve agreed to such an arrangement, you would be informed by HDB regarding the property tax payment you’re liable to make for the three months. You’ll be taxed at a residential property tax rate which is 10% of your flat’s Annual Value.
You will not qualify for an owner-occupier tax rate on your HDB flat during the extended period of stay since you’re not residing in your flat. This will be mentioned in the Letter of Acceptance and Indemnity and the Housing and Development Board terms and conditions when you submitted your application for extending your stay period on a temporary basis.
Post the extension period of 3 months, the owner-occupier tax rates will be applied automatically. A property owner need not request IRAS for owner-occupier tax rates. Your flat’s new owner will be liable to make the property tax payment starting from the property transfer date.
To all applicants who intend to extend their stay period temporarily, the Housing and Development Board will provide a 3-month (maximum) period from the completion date of resale. In case you as a seller want to end your extension period early, you need to inform HDB by signing in to the “My HDBPage” using your Singpass in less than 1 week of the discontinuation.
On notifying the HDB authorities successfully, HDB officials will communicate the same to IRAS. No additional action will be needed from your end and you will be informed by IRAS about the tax adjustments in the subsequent month.
When you want to sublet your complete flat: When your decision is to sublet your flat completely, you’ll end up paying property tax which is higher. This is due to the withdrawal of the owner-occupier tax rates from the subletting date. Your flat will be subjected to 10% residential tax rate.
Once the lease period ends, you need not inform IRAS about your intention to sublet your complete flat to some other party. Nevertheless, in case you plan to occupy the flat again, you can submit an application for owner-occupier rates (lower) starting from the date on which you move into your flat.
When you want to sublet a few rooms in your flatSuppose you decide to sublet some of the rooms in your flat while you’re still residing in the flat as the owner, you’ll be taxed at an owner-occupier tax rate itself. However, as the flat owner, you need to make sure that your agent or tenant stamps the lease/rental agreement with a comment stating “partially let” and not “wholly let”. This will ensure that the withdrawal of owner-occupier rates doesn’t occur.
In case the withdrawal of the owner-occupier rates happened without your intent, you can submit an application to IRAS requesting for the owner-occupier tax rates to be reinstated. You will need to request IRAS (in writing) with the following details:
Note: You need to make sure that the rental agreement (inclusive of renting rooms) is e-stamped by your tenant. You can ask your tenant for a stamp certificate copy so that you’re sure about the rental agreement being stamped.
Tax allotment: The Housing and Development Board will inform IRAS regarding the HDB flat transfer. Generally, your agent/lawyer or an HDB officer will help you with your tax amount distribution in addition to assisting you with the reimbursement from your buyer. IRAS doesn’t divide or negotiate liabilities concerned with property tax amongst the two parties (you as the seller and the buyer of your flat).
GIRO cancellation: In case you’ve opted for a GIRO arrangement, you need to ensure to make your property tax payment (in full) minimum 1 week prior to the date of completion. Once the complete payment is done, a GIRO deduction will not occur in the future.
After IRAS is intimated by the Housing and Development Board with regards to your property transfer, all your GIRO arrangements will be cancelled automatically. There is no need for you to intimate IRAS individually regarding the GIRO cancellation.
As an HDB Flat Owner, you are obligated to pay property tax. Ensure to pay your tax on time to avoid any penalties.