SINGAPORE - Most owners of Housing Board flats can expect to pay more in property taxes next year, as the Inland Revenue Authority of Singapore (Iras) will be revising the annual value (AV) of HDB flats in line with increase in market rentals.

Iras said in a statement on Wednesday (Dec 1) that the AV will be revised upwards by 4 per cent to 6 per cent, with effect from January next year, and that this is part of its annual review of properties to compute the property tax payable.

With the revision in AV, all one-room and two-room flat owner-occupiers will continue to pay no property tax.

This will also be the case for 35 per cent of three-room flat owner-occupiers, while 65 per cent of three-room flat owner-occupiers will each pay between $8 and $14 more annually.

The four-room, five-room and executive flat owner-occupiers will each pay between $21 and $26 more annual property tax in 2022.

Iras said it monitors market rental trends to determine the AV of properties.

AV is the estimated annual rent of the property if it were to be rented out and is determined based on the market rents of comparable properties.

The AV of HDB flats had remained unchanged since its last revision in 2017.

However, Iras added, with the rising market rents of HDB flats this year, the AV of all HDB flats will need to be revised upwards from Jan 1 next year.

The property tax payable is derived by multiplying the property tax rate with the AV of the property, said the authority.

Owner-occupiers enjoy concessionary property tax rates ranging between 0 per cent and 16 per cent, while the property tax rates for those who rented out their flats range between 10 per cent and 20 per cent.

The tax rates are progressive, with higher-value properties being taxed at higher rates, it added.

For example, owner-occupiers of a four-room flat will pay between $73.60 and $121.60 in property tax next year, after a $21.60 increase in annual tax payable from 2021. In comparison, the increase in annual tax payable from 2021 will be $26.40 for owner-occupiers of executive flats.

The applicable tax rates for HDB flats are up to 4 per cent for owner-occupied flats and 10 per cent for non-owner-occupied flats.

All property owners will receive their property tax bills by end-December this year and are required to pay their property tax by Jan 31.

There will be a 5 per cent penalty imposed for property owners who fail to pay or have not arranged to pay their tax via Giro instalments by the due date.

Property owners facing financial difficulties may approach Iras for assistance to discuss a suitable payment plan before Jan 31.