The government has announced a one-off property tax rebate as part of Budget 2024. In 2025, owner-occupied HDB flats will receive a 20% rebate, while owner-occupied private residential properties will receive a rebate of 15% with a cap of $1,000. This is in response to the upcoming increase in annual value bands for owner-occupier’s residential property tax rates, which will take effect on January 1, 2025.The annual value of a property is calculated based on its estimated yearly rental income if it were to be rented out. The government believes that these changes, along with the property tax rebate, will result in lower property taxes for more than 90% of owner-occupied properties in Singapore. This initiative reflects the government’s efforts to alleviate the rising cost of living for Singaporeans.Following these changes, Lee Sze Teck, senior director of data analytics at Huttons Asia, predicts that the annual value of private properties will remain steady in 2025, due to the minimal growth of private residential rents this year. Meanwhile, HDB rents are expected to increase by 4%, potentially raising the annual value of HDB flats. The one-off property tax rebate may help HDB owners offset any potential increase in annual value. For instance, if the annual value of a HDB flat is $30,000, the property tax payable for 2025 would be $720. With no change in annual value, the owner would only have to pay $576, saving $144 in taxes. Similarly, owners of private residential properties with an annual value of $85,000 will save $864 in taxes with the 15% rebate capped at $1,000.However, Lee notes that this property tax rebate has been offered in the past, but it does not diminish the appeal of investing in residential properties in Singapore. The main draw of investing in Singapore’s residential properties is their potential for capital appreciation, which outweighs any increase in property tax.
Investing in a condo has its own advantages, one of which is the opportunity to leverage its value for future investments. As a way to expand their real estate portfolio, numerous investors utilize their condos as collateral to secure additional financing for new ventures. While this tactic can potentially amplify profits, it’s essential to have a solid financial strategy in place and carefully consider the potential effects of market fluctuations. By incorporating condos into one’s investment plan, individuals can unlock even greater opportunities for growth and success in the real estate market.