FAQs about IRAS Issues
1Q: How do you know the total amount of property tax you need to pay?
The property tax can be computed using the annual value and the percentage tax rate of the property. The tax for all types of property follows a flat rate of 10%.
However, the owner of a residential property that he lives in can pay the owner-occupier tax rates which is based on the progressive tax structure. If he owns and lives in more than one property, he can only claim the owner-occupier tax rates for one property.
Implemented as of January 1, this tax makes use of a three-tier structure. The tax rate for the first $6,000 is 0%. A 4% tax rate is implemented for the next $59,000. A 6% tax rate is implemented for values above $65,000.
So, for a house with an annual value of $80,000 we compute the tax as follows
Take the tax payable for first $6,000 as 0%
Take the next $59,000 at $4% = $2,360
Take the remaining $15,000 at 6% = $900
Total tax payable is $3,260 per annum
For non owner-occupied properties, the computation is simply 10%.
For example, for an annual value of $24,000, the tax would be $2,400 at 10%.
2Q: What do you mean by stamp duty? How do I pay the stamp duty?
A stamp duty is tax implemented on both legal and commercial documents. The function of the stamp duty tax is not based on the transaction. This means that aborting the transaction does not excuse you from paying the stamp duty tax. This tax is paid in the First Schedule of the Stamp Duties Act, Cap 312. Stamp duty tax is paid only on immovable property, stocks, and shares documents including the sale, lease, or mortgage of an immovable property. This means that the stamp duty tax does not apply to all documents.
3Q: How do you define Property Tax?
Property tax apply to all real estate properties such as land, HDB flats, private housings, or office, retail and industrial spaces. Computation of the tax is based on the property’s annual value.
4Q: How do you calculate the Stamp Duty Tax?
Since the Stamp Duty Tax only applies to the sale or purchase of an immovable property, we can base it on the conveyance formula released effective Feb 29, 1996
– 1% on the first $180,000
– 2% on the next $180,000
– 3% of the balance amount
The purchased price should be rounded up to the next hundred. Any item relating to the sale of the immovable property including gifts should be reported to the Commissioner of Stamp Duties for adjudication.
5Q: How do you define annual value?
The annual value of a property is based on the revenues you derive from the rental of the property but excludes rental of furniture or service charges. Usually, you can find the annual value of the property on the valuation list. It is obvious that the annual value of any property is not fixed and changes with alteration, improvement, or when there are changes in the market rental rates.
6Q: How should I get a copy of my Notice of Assessment?
You may request from the Inland Revenue Authority of Singapore (IRAS).
7Q: May I know the existing individual tax rate?
There are different tables for the resident and non-resident tax rates. Please click here to visit the website.
8Q: Should I submit an Income Tax Form or e-file even if I am not required to pay income tax?
An Income Tax Form is important and should be submitted even if you do not meet the level of income that would require you to pay an income tax. The report would just be NIL income and should be submitted using the Income Tax Form or IRAS PIN mailer. After submitting the e-file declaration, you will receive an acknowledgement.
9Q: If I have any other income derived outside Singapore, do I need to declare my earnings?
All income earned outside of Singapore, even though received in Singapore, is considered as tax exempt. However, the income obtained through partnerships in Singapore, even though earned outside of Singapore, is considered as taxable.
10Q: I have an income derived from my unit trust, do I need to declare it?
The Income Tax Act excludes income distributions coming from both the unit trust and the real estate investment trust including those that were authorized by the Section 286 of the Securities and Futures Act on or after Jan 1, 2004.
11Q: What will happen if I lose the capacity to pay my property tax?
Please communicate with us and we will discuss the best option after reviewing your financial issues.
12Q: What is the penalty for late payment of the property tax?
Unpaid taxes /overdue taxes have a 5% penalty.
13Q: What is my schedule for property tax payment?
Property taxes must be paid every January 31 of the year after the taxable year. The government sends the statement in January of each year.
14Q: How do you define the Net Annual Value?
The Annual Value is the expected rental value of a property. The Net Annual Value is reflected in the tax bill as annual value less expenses.
15Q: How should I pay the property tax using a non-Giro instalment plan?
The grant is case-by-case. The interest rate is 10% per annum.
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