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Property Tax Due: What Should My Business Do?

5 minute read

Businesses need to provide timely tax payments and understand the overall tax structure. If they don’t, they will face penalties, get bad credit ratings, and lose potential investors. Even though business taxes seem complicated, they don’t have to be if you follow our guide on business taxes in Singapore.

One important upcoming tax due in the coming year is property tax, which is applicable to property owners. If you’re wondering whether it affects your business and what you should do in that regard, keep reading to find out.

Taxes are extremely important and can be used to promote social development in many ways, like for example building a student care centre or for various charitable purposes.

Overview:

 

What is property tax?

Property tax is a tax on property ownership and applies whether it is rented out, owner-occupied or vacant. Just like a homeowner is required to pay taxes on their home, a business owner is responsible for paying taxes on any company-owned property.

If your business owns any real estate such as buildings or land, you are required to pay taxes for them. The tax is calculated based on your locality and most of the time, the business property tax is assessed by the country or city in which the property is located.

Your business property tax rate will be determined based on the value of the land or real estate the business owns. This value will be determined by your local tax department and so will the amount of annual tax you need to pay.

There is also a possibility that you will be required to pay tax when you want to sell or purchase business property.

In some localities, in the cases of purchasing such properties, the tax is split in two. One half of the tax is paid by the current owner who is selling the land or real estate and the other one by the buyer.

In some cases, you will have to pay taxes not only for the buildings and land you own but also for any personal property your business owns. This is called a personal property tax and it includes all the items that are necessary for business operations.

 

When is property tax due?

An official announcement at Supplementary Budget 2020 introduced various improvements regarding PSG. The grant was enhanced to encourage enterprises to continue their digitalization and productivity improvement efforts.

The maximum funding support level has been increased to 70%. Due to the pandemic, the scope of generic solutions has been expanded and of course, these measures were created to help enterprises combat the effects of COVID-19.

These are the tools that have expanded the generic solutions:

  • Virtual meeting tools
  • Online collaboration tools (covering remote working solutions)
  • Temperature screening tools
  • Queue management systems

Keep in mind that the support for COVID-19 business continuity measures has ended on 31 December 2020. Hence, all businesses that have applied before the stipulated date got a chance to enjoy the measures package.

All interested parties that would like to see available solutions can do so on GoBusiness Gov Assist.

 

Does property tax affect your business?

If you’re wondering if property tax Singapore affects your business, the answer is yes, but only if it’s commercial or industrial property owned by your business. This means that the property you own is not a residential property and it’s now owner-occupied.

This type of tax system has a residential component to encourage home ownership. Some people go around this by turning their properties into a guest house or a boarding house.

Any commercial and industrial properties that qualify are used for non-residential purposes and are considered non-owner occupied are taxed at 10% of their total annual value.

It’s also important to state that no owner occupied property tax rates apply to any non-residential properties as well as investment properties. That includes the cases where a property owner has purchased the land or real estate for their own use or occupation or even purchased properties that are considered investment assets or as a property investment.

 

How to pay your property tax?

You should keep in mind that the governing body doesn’t accept credit card payments due to the hefty transaction fees levied by credit card service providers. To conserve public cash, they must minimize our collection expenses.

You can pay your tax on AXS e-Station or AXS m-Station with a credit card. The limit on payments is $9,999.99.

You can also check with the bank that issued your credit card to see if they accept income tax payments through credit cards.

There are multiple ways you can pay your property tax bill with a revenue authority of Singapore, and we’ll list the most popular methods below.

AXS (stations, internet, and mobile)

To make payments at an AXS station:

  • Bring your Payment Slip.
  • Scan the barcode that is located at the bottom of the slip or key in the Payment slip number. You can also enter your Tax Reference Number to pay for property tax or individual income tax.
  • Once the payment transaction is complete, you will be issued a receipt.

If you’re not on the GIRO payment, you will be issued a payment slip with your tax bill.

AXS stations accept the following cards:

  • Automated Teller Machine (ATM) cards from Citibank, DBS/POSB, Maybank, OCBC, Standard Chartered Bank, and UOB. Your bank will limit the payment limit amount.
  • Diners Club Card and DBS/POSB Credit Card. The Diners Club or your bank will determine your payment limit.

You can also access the AXS e-service through the AXS website. If you want to make your payment through the AXS m-Station application, you need to go to the Google Play store of the Apple App Store and search for “AXS Payment” to find the application.

To pay for property tax, you need to enter your Tax Reference Number and to complete a payment, go through eNETS Debit and have existing bank accounts with Citibank, DBS/POSB, OCBC, Standard Chartered Bank, or UOB.

Internet banking with POSB/ DBS/ OCBC/ UOB

If you have an individual account with POSB, DBS, OCBC, or UOB you can pay your tax via Internet Banking Bill Payment by doing the following:

  • Log in to your bank’s Internet Banking Portal.
  • Select the “Bill Payment” option and for the Billing Organization, select “IRAS”.
  • Enter your Tax Reference Number of the 14-Digit Payment Slip Number under Bill Reference/ Bill Account/ Consumer Reference Number field. If you’re not on a GIRO payment plan, the Payment Slip will be issued together with your Tax Bill. To complete your property tax payments, you need to select “IRAS-PTY TAX” and enter the Property Tax Reference Number.
  • Enter the amount you want to pay, but keep in mind that your bank subjects this amount to the daily Internet Banking payment limit.

After the payment is received, your payment will be posted into the tax account within three working days.

SAM (kiosks, internet, and mobile)

To pay through the 24-hour SAM kiosk:

  • Bring your Payment Slip.
  • Scan the barcode that is located at the bottom of the slip or key in the Payment slip number. You can also enter your Tax Reference Number to pay for property tax or individual income tax.
  • Once the payment transaction is complete, you will be issued a receipt.

This payment method can only be used by people who own NETS cards with DBS/POSB, OCBC, Standard Chartered Bank, and UOB. Your bank will set the limit for the amount that can be deducted and your payment will be posted into the tax account immediately.

To make your payment via the SAM web, you need to access the SAM website. To make your property tax payment through the SAM Mobile application, you need to go to the Google Play store of the Apple App Store and search for “SingPost SAM” to find the application. The application supports both Android and iOS.

To make your payment, key in your Payment Slip Number or Property Tax Reference Number. If you aren’t on the GIRO payment play, you will be issued a payment slip.

Payments can be made via GIRO-On-Demand or eNETS Debit. To complete your payment via NETS Debit, you need an existing Internet Banking account with Citibank, DBS/POSB, OCBC, Standard Chartered Bank, or UOB. This payment mode has a daily payment limit.

NETS at any post office counter

The following post offices accept property tax payments by NETS and Cash Card over the counter:

  • Chinatown
  • Jurong Point
  • Novena
  • Tampines Central
  • Toa Payoh Central
  • Woodlands Central

After the payment is received, your payment will be posted into the tax account within three working days.

Property tax via GIRO application

GIRO is the preferred method of payment for many property owners and you can apply for GIRO online via:

  • The myTax portal for DBS/POSB and OCBC customers
  • Internet banking for DBS/POSB, OCBC, and UOB customers
  • AXS station for DBS/POSB customers

Your GIRO arrangements will be set up within 3 working days. If you apply for a Master GIRO, you can pay your property tax by completing one GIRO application form. To sign up for Master GIRO, you need to use your own bank account.

 

How to calculate property tax in Singapore?

If you want to know how to calculate property tax, you have to multiply the annual value of the property by the valid tax rate. Of course, higher-value properties will come with higher taxes and the amount will also depend on whether you own multiple properties or just one property.

 

FAQ

Let’s answer some of the most essential questions people have regarding the property tax in Singapore.

How do you calculate real property tax?

It is calculated by multiplying the property’s Annual Value (AV) by the applicable Singapore property tax rate.

Keep in mind that not every single property has the same property tax rates.

How much is the annual tax in Singapore for properties?

Beginning in 2024, the final tax rate of up to 36% for non-owner-occupied properties and 32% for owner-occupied properties will apply to tax rates for residential properties.

This is the most recent piece of information we could find released by the officials regarding owner-occupied homes and non-owner-occupied properties.

How much is the property tax for HDB flats in Singapore?

Since HDB rental rates have increased, the Inland Revenue Authority in Singapore will revise the annual valuations of HDB apartments upward by 4% to 6% in 2022 for owner-occupied properties.

Whether or not you rent out your HDB apartment, owner-occupants of 3-room and larger HDB flats will be required to pay an estimated $8 to $26 extra in HDB property tax in 2022.

How is the annual value of a house property determined?

Property tax annual value is calculated by comparing the annual rental prices for similar or comparable properties on the HDB and URA websites for condominiums and single-family homes, respectively.

You can determine your property’s market value by multiplying the monthly rent by twelve (the number of months in a year).

 

Wrap up

If you pay your taxes early, you won’t have to worry about monetary penalties from unpaid taxes or overdue tax payments that can be quite high or leave you with a bad credit rating. Even though taxes seem daunting at times and hardly anybody wants to pay them, you’re still obligated by the law to do so.

Keep in mind that taxes don’t have to be complicated and you shouldn’t miss any payments just because you aren’t sure how property taxes work. Sleek offers accounting services that provide convenience for your business. If you’re interested in our services or have any further questions, you can always talk to our sales team.

 

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