PROPERTY TAX (AMENDMENT) BILL

Order for Second Reading read.

4.15 p.m.

The Parliamentary Secretary to the Minister for Finance (Mr Tang See Chim) (for the Minister for Finance): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Bill now before this House envisages a number of amendments to the existing Property Tax Ordinance.

Since the Land Titles (Strata) Act was enacted in 1967, it is advisable to provide specifically for owners of flats to be subject to assessment annually under the Property Tax Ordinance. That Act introduced a new concept of ownership, and flat owners registered under that Act may have doubts as to what their property tax position is, since they are owners of property situated "in the air" and thus somewhat different from the usual type of ownership attached to the ground.

To this end, a new paragraph (e) is added to the proviso to section 2 of the Property Tax Ordinance. The new paragraph seeks to ascertain, firstly, who the owner of each such lot or flat "in the air" is. Secondly, it states that the annual value of the flat is to be assessed in the same manner as any other freehold estate in land. And, thirdly, it excludes the land on which the flats are built from assessment when the flats are already individually assessed.

In the case of property comprised in a statutory land grant or lease of State land or a lease of property for a period exceeding three years by a public authority, another paragraph 2 (f) is inserted. Firstly, it deems the grantee or lessee of such land to be the owner for purposes of assessing annual value. Secondly, it provides for the assessment of property to be conducted in the same way as if they are freehold estates in land. And thirdly, it disallows deductions for premium or rent payable to the Government so that full property tax may be levied.

The present situation is that when such lands are leased with a prohibition against sub-letting, the lessee is not regarded as the owner for purposes of the Property Tax Ordinance and so no tax is paid. Where there is no prohibition against sub-letting, the lessee is regarded as the owner and pays tax. But the law at present allows the lessee to deduct the proportionate amount of the tax paid or (in the case of Government leases) the rent payable to the Government.

There has been considerable difficulty in collecting property tax in such cases and it is hoped that with the introduction of these amendments, full property tax will be collected.

Public authority for this purpose is then accordingly defined.

The next amendment affects section 17 of the Ordinance. At the moment, when a building is demolished or removed, the owner of such property is required to give written notice of such changes to his property to the Chief Assessor. The amendment now requires this notice to be given within 15 days from the date of completion of demolition or removal.

In the same section, the Comptroller is empowered to tax the owner of such property according to the existing annual value ascribed to the property, even though it is demolished or removed. In the amendment, he is given the option of taxing the owner according to a revised annual value instead.

Section 6 (7) is next amended in view of the delays encountered in the collection of the amounts payable in lieu of property tax from public authorities and bodies corporate. To discourage undue lateness in payment of such contributions, it is now stipulated that should payments be made later than the third week from the end of January or July of each year, the unpaid sum shall be regarded as arrears of property tax that can be recovered with interest at the prevailing bank rate.

Lastly, an amendment is made to transfer the power of appointing officers under the Ordinance from the President to the Minister.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. -[Mr Tang See Chim].

Bill considered in Committee; reported without amendment; read a Third time and passed.