Property taxes may continue to rise for residential landlords.

Property tax is seen by the government as one of the most effective ways to tax wealth. Taxing income is a fair way to combat inequality.

Still, residential landlords face higher tax bills in an untimely manner.

The quarterly increase in rental prices of private non landed homes decreased to 0.2 % in Q3, down from 2.3 % in the prior quarter.

URA estimated that in total, around 20,400 private homes including executive condominiums will be completed by 2023. This is the highest private housing completions since 2017. The completion of around 39.700 private homes between 2023-2025 (including executive condominiums).

A gloomy future may lie ahead for residential property owners. Property tax bills are expected to rise significantly for non owner-occupied homes in 2024.

Calculate annual property taxes by multiplying your property’s value with the applicable tax rate.

The AV for buildings is the estimated annual gross rent if the property were to be rented, excluding any furniture, furnishings or maintenance fees. The AV will be determined using market rentals for similar properties.

In 2024, the AV of most homes will rise. This is due to a general rise in rental prices since 2022. In the third quarterly, the Urban Redevelopment Authority’s Rental Index of Private Residential Properties was up 19.3% from a previous year. It also increased by 44.3% compared with the fourth quarter 2021.

Investing in Singapore houses can have a high price tag. Singaporeans living longer need to urgently look at other options than homes to help them build retirement savings.

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The process of becoming a home landlord is fraught with difficulties. Private property prices are rising sharply. In addition, mortgages have become more expensive with high interest.

Singapore citizens purchasing multiple homes are now subject to additional stamp duty of between 20 and 30%.

It is a lucky day for those who purchased multiple homes in the past, when ABSD either did not exist or ABSD’s rates were significantly lower. Singaporean couples can own separate properties without ABSD.

It will also increase their bargaining ability. For residential property landlords, it might be difficult to pass through higher property tax to tenants.

Rising interest rates also mean higher costs for some landlords. A landlord’s fear of having an unoccupied unit for a longer period, and then paying a higher property tax bill could cause them to lower their rents.

In 2024 the rate of property tax for non owner-occupied properties will increase from 10 to 20 percent to 11 to 27 percent. In 2024 a tax rate of 12 % will apply to the first S$30,000 worth of AV, the second S$30,000 is between 20 – 28 %, and the amount above S$60,000, 36 %.

Singapore houses make for a strong investment proposition because of the constant efforts to improve Singapore as a country where people can live, work and have fun.

A non-owner-occupied unit of a condominium with an AV in 2023 is $52,000. This year, the tax bill will be S$7.170.00. If the AV is S$60,000 at the end of 2024, next year’s tax bill would be S$10800 (up 51%).

Singaporeans have a tendency to think of renting out their home and earning rental income as a way to fund retirement.

Homeowners will see their property taxes increase by 2024 because of the higher AVs. However, there is some relief in the form of an one-time property rebate.

However, homeowners of expensive private homes need to be aware that this property tax rebate only lasts for a limited time. Their property tax burden will then increase.

Particularly, owners who are servicing expensive home loan payments and retirees with limited cash flow will be affected by the higher property tax on their homes.

Singapore may be the best nation in terms of long-term plans. Think of the recently announced land-reclamation project on Singapore’s eastern coast to develop 800 ha of a “Long Island”. This will provide more land for the city and increase its water-resilience . It will also protect Singapore from the rising sea level.