UPDATED 19 JAN 2023: Annual Value of Property raised for the second time in two years! Latest Annual Value revision with effect from 1 January 2023.
Amidst all the announcements in the Budget 2022 speech, one caught our attention - there's going to be an increase in property tax rates. The good news? It's only going to affect properties with an Annual Value of over $30,000. The bad news? People in Singapore still don't know what their property Annual Value is!
And since it is also linked to things like the GST Voucher, which Finance Minister Lawrence Wong affirmed is a permanent feature, let us show you how easy it is to find the Annual Value of your property.
What is Annual Value?
A quick check of the IRAS website reveals that the Annual Value of a property is the estimated gross annual rent if it were to be rented out, excluding furniture, furnishings and maintenance fees.
For example, if you’re renting out your a 5-room HDB flat for $2,000 a month, then you're earning $2,000 x 12 = $24,000 a year gross rental. However, after you deduct costs like furniture, furnishings and maintenance fees, your Annual Value (AV) is probably about $16,000. A low AV is actually a good thing, don't worry. We'll explain why later.
What is the Annual Value of my property?
IRAS determines the Annual Value of a property by looking at the gross annual rent of similar or comparable properties within the same development or vicinity. They then come up with AV based on an average of these amounts.
So if you are not renting out your 5-room flat, but your neighbour who also owns a 5-room HDB flat is renting out their flat for $1,800 a month, while another neighbour who owns a 5-room HDB flat is renting theirs out for $2,200 a month, then the Annual Value of all the 5-room flats in your area (including yours!) is probably around $16,000 as well.
Ultimately, IRAS is in charge of deriving this value, so there's no point manually checking what your neighbours are charging for rent. Because of their unpublished methodology for determining the cost of furniture, furnishings and maintenance fees, it's best to just check the Annual Value of your property on their website.
You can check the Annual Value of your property by logging into IRAS MyTax Portal and go to “View Property Portfolio” to see the current AV of your property.
What about the Annual Value of other properties?
If you really are kaypoh and want to check the Annual Value of someone else’s property, you can also do so via the IRAS website. Do note that there’s a $2.50 fee per search.
If you're just looking for a benchmark, here's the latest data for the median Annual Values in 2021:
| PROPERTY TYPE | Median Annual Value |
|---|---|
| 1-Room or 2-Room HDB | $5,340 |
| 3-Room HDB | $8,220 |
| 4-Room HDB | $10,140 |
| 5-Room HDB | $10,980 |
| Executive and other HDB types | $11,340 |
| Non-landed private property (includes Executive Condominiums) | $23,400 |
| Landed private property | $37,200 |
Source: IRAS
How often does IRAS update my Annual Value?
IRAS reviews the Annual Value of properties at least once a year. This allows them to reflect the changes in the market rental values of comparable properties. Between 2017 and 2021, there was no change in the Annual Values of HDB flats.
However, effective 1 January 2022, Annual Values of HDB flats have increased by 4% to 6%, in line with an increase in market rental rates. For example, in 2017, 4-room flats in Tampines were being rented out for $2,000 a month on average. That number increased 10% to $2,200 in 2021.
Effective 1 January 2023, Annual Values of both HDB flats and private properties have increased again! According to IRAS, market rents of HDB flats and private residential properties have risen by more than 20% since the previous AV revision.
If your property undergoes physical change that could materially affect its rental value, IRAS will also revise your AV from the date of change.
Why is it important to know the Annual Value of my property?
There are two main reasons you should be aware of your property's AV.
1. Property Tax
Your property tax is determined by the Annual Value of your property - the higher it is, the more you'll need to pay. Currently, the property tax is different for owner-occupied properties and non-owner-occupied properties (i.e. investment properties).
For owner-occupied properties, you don't need to pay any property tax if your Annual Value is $8,000 or less. This means that a majority of people staying in 1- and 2-room HDB flats don't pay any property tax at all!
2. GST Voucher
For the Cash and MediSave portions of the annual GST Voucher, you get more if the Annual Value of your property is $13,000 or less. This means that a majority of HDB dwellers will be eligible for the larger amount!
