LP.com

Starting in 2024, tax rates for owner-occupied properties will increase significantly. For properties with an Annual Value (AV) exceeding $30,000, the tax rate will rise from the current 5% to 23% to a new range of 6% to 32%. This adjustment reflects the government's response to rising market rents and inflation pressures.

Tax rates for non-owner-occupied properties will also increase, moving from the current 11% to 27% to a new range of 12% to 36%. This change will impact landlords and property owners using their properties for commercial purposes, prompting them to reassess investment strategies and rental pricing.

Due to rising market rents, the AV of most private residences and HDB flats will increase, resulting in higher property taxes. To mitigate the tax burden on owner-occupiers, the government will provide a one-time property tax rebate:

- Owners of one- and two-room HDB flats will continue to be exempt from property taxes.

- Rebates for three-room, four-room, five-room, and executive flats will be 70%, 50%, 40%, and 30%, respectively.

- Private residential property owners will receive a 15% rebate, capped at $1,000.

Overall, these changes will have a minimal impact on HDB flat owners, with the average monthly tax increase for three-room to executive flats being less than $3. Owners of lower AV residential properties will see monthly tax increases of less than $15, while those with higher AV properties will experience larger increases.

Internet

From the second half of 2024, new HDB projects will no longer be classified as mature or non-mature estates. Instead, they will be categorized into Standard, Plus, and Prime locations, each enjoying different levels of government subsidies.

- Standard Locations:These will follow existing BTO flat restrictions, such as a five-year minimum occupation period and no income ceiling for resale flat buyers.

- Plus Locations: These will have stricter resale restrictions, requiring buyers to be Singapore citizens, private property owners to wait 30 months before purchasing, and buyers' monthly income to not exceed $14,000.

- Prime Locations:Details for Prime locations were not specified in the text but typically include the most desirable areas with even stricter regulations.

The policy changes make commercial properties more attractive compared to residential real estate. The key benefits include:

- Lower Stamp Duties:Commercial property purchases are subject to a maximum of 5% stamp duty, compared to up to 60% additional buyer's stamp duty for residential properties.

- Stable Property Tax Rate:Since 2015, commercial properties have a fixed property tax rate of 10% of the AV, regardless of use or value.

- Large Capital Pools: High-quality commercial properties in prime locations are scarce and valuable, attracting investment from funds and family offices, satisfying large investment needs in a single transaction.

The 2024 property policy changes in Singapore reflect the government's strategic response to market conditions, aiming to balance tax burdens, regulate housing markets, and enhance the appeal of commercial real estate. These measures are expected to significantly influence investment strategies and property market dynamics in the coming years.