PROPERTY TAX ON RESTRUCTURED HOSPITALS AND PUBLIC HEALTH AND TERTIARY INSTITUTIONS

Mr Low Thia Khiang asked the Minister for Finance whether the more "market driven approach" applied by the Inland Revenue Authority of Singapore in valuation of public sector property will result in Government restructured hospitals and public health and tertiary institutions having to pay higher property tax, leading to further increases in their already high operating costs.

Dr Richard Hu Tsu Tau: No. The restructured hospitals do not pay property tax because they do not own the land they occupy. Their land and buildings are on TOL, so they pay rent to the Government. The rental is at market rates, to reflect the proper costing and pricing of the scarce land resources which they are using. However, because the hospital land is zoned for institutional use, this market rental is only a fraction of rentals for commercial or residential property. In any case, the subsidies for B1, B2 and C Class patients are sufficient to cover completely their share of rental costs.

Polyclinics do not pay property tax because they are part of the Government.

Tertiary institutions do not pay property tax on their educational and sports facilities because they are exempted under the proviso to section 6(5) of the Property Tax Act.