OTHER TAX CHANGES

Reduction in Property Tax

The property tax rate for industrial, commercial and let out residential properties was reduced from 15% to 13% last year. Nonetheless, our property tax rate is still higher than some neighbouring countries. This is exacerbated by our relatively high property values. I announced in previous Budgets that the property tax rate would be lowered to 12% over 4-5 years. To help reduce business costs and further enhance Singapore_s competitiveness, I have decided to expedite the reduction of property tax rate. With effect from 1st July 1996, the property tax rate will be reduced by 1% from 13% to 12%. The revenue loss is estimated at $118 million. The Government strongly urges landlords to pass on the savings in property tax to their tenants. JTC, HDB and other statutory boards will pass on the tax savings in full to their tenants.

The 4% concessionary tax rate for owner-occupied residential properties will remain unchanged.

Stamp Duty on Property Transfer

Stamp duty on property transfers in Singapore is currently levied at the rate of 1% for the first $90,000, 2% for the next $60,000 and 3% thereafter on the value of the property. To keep pace with property price increases, I have decided to adjust the threshold values for stamp duty on property transfers to:

a) 1% for the first $180,000;

b) 2% for the next $180,000; and

c) 3% thereafter on the value of the property. This will take immediate effect. The estimated revenue loss for the Government from such an adjustment is estimated at $245 million a year. Stamp Duty on Leases

Currently, the stamp duty rates on property leases range from 0.8% for those with a lease period of less than 1 year, to 3.2% for those with a lease period of more than 3 years. To reduce business costs, I have decided to halve the stamp duty on leases with immediate effect. This is expected to reduce stamp duty revenue by $161 million a year. Details are given in Annex IV. (Cols. 823 - 824) Annex IV - STAMP DUTY RATES ON LEASES (Cols. 823 - 824)

Rationalisation of Instruments Subject to Stamp Duty

Currently, stamp duty is levied on a variety of instruments specified in the First Schedule to the Stamp Duties Act. The last major review of stamp duties was undertaken in 1980 at which time the number of articles in the First Schedule was reduced from 68 to 47. To further reduce costs and inconvenience to businesses and members of the public, I have decided that the stamp duty on a further 13 types of instruments will be abolished. The rates of the stamp duties that are retained will be streamlined. This will take immediate effect. The estimated revenue loss for these changes is $6 million. Details are set forth in Annex V. (Cols. 825 - 830) Annex V - STAMP DUTIES TO BE ABOLISHED, STAMP DUTIES RETAINED (Cols. 825 - 830)