PROPERTY TAX

Three major property tax concessions which were announced during my Budget Speech of 7th March 1986 have already been adopted as permanent structural adjustments to our property tax system. These are the exemption from property tax for lands under private development; the property tax assessment on hotels at 15% of gross receipts for rooms and 5% for food and beverage outlets; and the payment scheme of property tax by monthly instalments through GIRO.

The 50% rebate on property tax is due to expire on 30th June this year. This rebate scheme, as Members of the House would recall, has been part of an incentive package introduced by Government as far back as 1st July 1985. I have decided to extend the rebate scheme for another year until 30th June 1990. However from 1st July next year, the property tax rate of 23% will be reduced to 16% of annual value across the board. I would like to reassure Members that the Government will continue to monitor closely our property tax system to ensure that it remains competitive.

Also, from 1st July 1990, a concessionary property tax rate of 4% of annual value will be levied on all non-HDB owner-occupied residential properties. This will replace the present system of granting owner-occupied concessionary tax under the proviso to Section 6(5) of the Property Tax Act.

A new system of assessing HDB residential properties will also be put into place. An announcement on its implementation will be made in due course.