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Will You Be Affected By The Property Tax Hike

    By ERA Research & Consultancy, The Commentary
    Published 6 December 202
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    Impact of expected rise in property tax on homeowners and investors in 2023


    The Singapore government will raise the property tax rates and adjust the annual values of residential real estate in 2023.

    In this report, we will explain how this will lead to an increase in property tax and how it would affect residential property owners.


    Most property owners will pay more property tax

    • According to the HDB, there are about 1.033 million existing HDB flats owned by the individual homeowners.
    • Only 0.02% are 1-room flat, 3.1% are 2-room flats and 0.84% are Studio Apartments, making up a total of 3.96% of the total number of sold HDB flats.
    • This means that the owners of about 4% of the sold HDB flats are exempted from property tax because the Annual Values of their flats are below $8,000.
    • It also means that the owners of about 96% of the sold HDB flats will face an increase in the property tax payable from 2023 onwards.
    • There are about 421,000 completed Executive Condominium (EC), condominium and private landed housing units.
    • Practically all the owners of these housing units will face an increase in property tax payable in 2023 and 2024.


    The following definition and exp to the Inland Revenue Authority of Singapore (IRAS),

    • Property Tax is defined as the tax on property ownership and it applies to property that is occupied by the owner (owner-occupied), rented out or left vacant.
    • Annual Value (AV) is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishing, and maintenance fees.
    • Annual Property Tax is calculated by multiplying AV with the property tax rate.

    Property Tax: Owner-Occupier Residential Tax Rates

    The Government will provide a one-off 60% property tax rebate for all owner-occupied properties, up to a maximum of $60 in their 2023 property tax bill.

    Property Tax: Non-Owner-Occupier Residential Tax Rates

    Rental Index of Non-Landed Private Properties

    Overall private housing rentals started to recover in 4Q 2020 and began to increase sharply in 2022 due to expanding demand and limited new housing supply. The non-landed private housing rental index increased about 24% year-on-year (yoy) in 3Q 2022.

    As the property annual value is based on the estimated gross annual rent of the property, a persistent rise in rentals could lead to an increase in the annual value of the property. This would eventually result in higher property taxes.

    View Case Studies In PDF Downloaded Here

    Impact of Tax Hike

    Owner-Occupied Homes

    Based on our case studies, the rise in property tax payable on most owner-occupied properties is manageable.

    Owner-occupiers are less likely to feel the pinch of the tax hike due to the one-off tax rebate of $60 in 2023. Even without the one-off property tax rebate, the rise in property tax for a typical suburban condominium unit is about $250 from 2022 to 2023. All homeowners will receive the one-off tax rebate of 60% of the property tax, capped at $60 for their owner-occupied homes in their 2023 property tax bill.

    The majority of HDB flat owners would not need to fork out extra property tax in 2023 as the one-off tax rebate is able to cover any marginal tax hike. In addition, a majority of owners of HDB flats that command an annual value lower than $30,000 would emerge as the biggest winner as they are not subjected to an increase in property tax.

    Investment Residential Properties

    Our case study of a non-owner-occupied home in the OCR shows that the increase in the annual property tax for a typical 3-bedroom condo unit in the OCR is about $1000 in 2023, which is about $83 a month.

    In the past year, the residential property rentals increased by about 25%. This means that the rental for a 3-bedroom condo unit in the city fringe and suburbs would rise from between $4,000 and $5,600 in 2H 2021 to about $5,000 to $7,000 per month in 2H 2022. This translates to an increase of $1,000 to $1,400 in rentals per month. The increase in rentals is more than 10 times to the projected increase in property tax.

    Some landlords who are renewing the rental lease may use this increase in property tax as an opportunity to raise the rentals. However, many tenants are already feeling the pain from rising rentals over the past two years. Therefore, landlords should be mindful not to be too greedy when adjusting the rentals and kill the goose that lays the golden eggs.

    Written By ERA Research & Consultancy

    ERA Singapore
    T: (65) 6249 3172

    Disclaimer as attached in PDF for download.