TAX ON RESIDENTIAL PROPERTY (Particulars)

Mr Ch'ng Jit Koon asked the Minister for Finance (a) what are the various rates of property tax levied on residential property; (b) how much revenue was collected in respect of each category in FY 76; and (c) what is the estimated revenue in respect of each category for FY 77.

Mr Hon Sui Sen: Mr Speaker, Sir, Singapore is divided into several zones for purposes of applying property tax assessment rates as prescribed under the Property Tax (Rates) Order, 1971. These zones are shown in the Property Tax Rate Plan which is available for inspection by members of the public in the Property Tax Office.

Under this Plan, the highest assessment rate of 36% is levied on residential properties in the central city areas and in the southern islands comprising Sentosa, Sarong Island, Pulau Brani. Pulau Selegu and Pulau Hantu. Residential properties in the less developed areas are assessed at 27% while those in the rural areas, including all other surrounding islands, at 18%.

All HDB owner-occupied flats purchased under the Board's Home Ownership Scheme are assessed at the concessionary rate of 23%. For other owner-occupied dwelling houses, concessionary assessment rates of 14%, 16%, 18%, 19%, 20% or 23% apply. Properties with annual value of less than $240. whether owner-occupied or not, are also subject to the same rates. The assessment rate of attap and wooden houses is $6 a year.

Residential properties developed under approved urban redevelopment projects are assessed at a concessionary rate of 1 2% for 20 years before the full assessment rates applicable are imposed.

For FY 76, the revenue collection for all properties, excluding contributions by statutory boards, is expected to reach $265 million, which includes a substantial amount of back tax. The estimated revenue collection for FY 77 for all properties, except statutory boards, is $230 million.

No records of collection according to the different assessment rates for residential properties are kept. I regret, therefore, that I am unable to give the required breakdown.

Mr Cheong Yuen Chee (Toa Payoh): Sir, is the Minister aware that not all HDB dwellings get the concessionary rate of 23%? There are some HDB dwellings in Stirling Road, Queenstown, and St. Michael's estate which draw a rate of 36%.

Mr Hon Sui Sen: I believe that may be so. I am not quite informed of this particular instance. But I will look into it. Did the Member say HDB houses?

Mr Cheong Yuen Chee: Yes, at 36%.

Mr Hwang Soo Jin: Sir, in view of the steady drop in property values over the last few years, particularly in the last few months, would the Minister consider a downward revision in the rates of property tax?

Mr Hon Sui Sen: Sir, I assume the rates would also go down with the values and with the rents which are collected. Since this is a percentage of the annual value, and the annual value is based on rents, I assume there would be a reduction. I do not propose to reduce the rates as well as the annual values.

Mr Hwang Soo Jin: Sir, the Minister used the word "assume". He said that he assumes the annual value, being based on the rental, therefore the annual value would come down. But I think the existing practice is that, quite independent of what the rented value of the property might be, the Property Tax Department lays its own assessment.

Mr Hon Sui Sen: Sir, this may be due to the kind-heartedness of the Property Tax Department which does not always raise the annual values in accordance with the rents which property owners receive.

Mr J. F. Conceicao (Katong): Neither do they reduce!

Mr Hon Sui Sen: So if they are to be encouraged to base the annual values on rents, then I think they should raise it upwards as rapidly as they are expected to bring it downwards.

Mr S. Dhanabalan: Sir, since the annual value already reflects the worth or value of a property. taking into account the type of property, the location and so on, would the Minister consider having a uniform rate of property tax for the whole of Singapore except in cases where specific exemptions or reductions are to be given for promotional purposes?

Mr Hon Sui Sen: Sir, that is a consummation devoutly to be desired. I think the Property Tax Department and the Ministry of Finance have been trying for many years to rationalise the rates of property tax. If Members will have noticed when I read out the concessionary rates, it varies from 14%, 16%. 18%. 19%. 20% to 23%. I cannot myself imagine that a fine distinction can be drawn between properties which are only worthy of 14% and other properties which are worthy of 15% rates. Members will also notice that there are attap houses where the rate is $6 a year.

I have been trying to revise the property rates to a uniform consistent rate. The difficulty is not to revise the rates downwards from the higher rates of up to 36%, as I think most Members would like me to do. The difficulty is really raising the other lower rates upwards, so that there will be a uniform rate