Property tax rebate in 2025; most home owners will see lower tax bill

A one-off property tax rebate will be given to all owner-occupied homes in 2025, a move the Government said will ease cost-of-living concerns for home owners.

Owner-occupied Housing Board flats will receive a 20 per cent rebate, while owner-occupied private residential properties will get a 15 per cent rebate – capped at $1,000, said the Ministry of Finance (MOF) and Inland Revenue Authority of Singapore in a joint statement on Nov 29.

The rebates, together with the changes to annual value bands for owner-occupied homes that will kick in from 2025, will mean all such HDB flats and over 90 per cent of such private residential properties will see a lower tax bill in 2025.

The Government previously announced during Budget 2024 that it was raising the annual value bands for owner-occupied homes from Jan 1, 2025.

Property tax is calculated based on a property’s annual value, which is the estimated rent a property can fetch in a year if rented out. Annual values have risen in tandem with market rentals of public housing, which have been rising since 2022.

Under the changes, the annual value threshold for zero per cent tax for owner-occupied homes will be raised from $8,000 to $12,000 on Jan 1.

This will mean that all one- and two-room HDB flats will continue to be exempt from property taxes in 2025. For other HDB flats, property tax will continue to be calculated at a marginal rate of 4 per cent for the portion of annual value above $12,000.

The one-off rebate will automatically offset any property tax payable.

Mr Eugene Lim, key executive officer of real estate agency ERA Singapore, said the one-off property tax rebate may be a welcome measure from the Government that will help defray costs, but it is not expected to have a significant impact.

“This 15 to 20 per cent rebate may be a (quick) stopgap measure to help Singaporeans mitigate cost-of-living concerns,” he said.

Meanwhile, the annual value threshold that is used to assess eligibility for social support schemes will also be raised from Jan 1, 2025.

The revision will extend benefits to those living in more than a million residential properties, said MOF.

Currently, various government social support schemes provide tiered benefits to ensure that Singaporeans with greater needs receive more support.

These schemes include the GST Voucher scheme, MediShield Life premium subsidies and the Workfare Income Supplement scheme.

 

Alongside criteria such as income, the annual value of an individual’s residential property may be used as an indicator of means.

Under the current system, benefits are divided into two tiers – properties with an annual value of up to $21,000, and those between $21,001 and $25,000.

From January 2025, the annual value ceiling for the second tier will be raised to $31,000, while the first tier will remain unchanged.

The first tier will continue to cover all HDB flats. 

With the revised second tier, more than three in four residential properties, including lower-value private properties, can be eligible for social benefits, said MOF.

For instance, under the new threshold, a resident living in a property with an annual value of $27,000 will still qualify for GST Voucher cash payouts in 2025, which would not have been possible without the adjustment.

The Ministry of Health, which uses annual value, alongside per capita household income, to determine means-testing eligibility for subsidies and financial aid, said any change in subsidy or assistance arising from the annual value changes will be automatically extended to its healthcare schemes. 

These subsidies cover a wide range of services, including specialist outpatient care, drug costs in inpatient, outpatient and polyclinic settings, and various healthcare premium subsidies.

Existing Community Health Assist Scheme (Chas) card holders who are eligible for a Chas card with higher subsidies after the annual value revision will be automatically issued a new one after Jan 1, 2025. No action is required from individuals.