Every December, Singapore homeowners receive their annual property tax bill — and every year, the same questions arise: How is property tax actually calculated? Why did my bill suddenly increase? What happens if the property was wrongly classified?

With rising rents over the past three years and recalibrated tax rates aimed at wealth distribution, property tax has become more important — and more confusing — for many homeowners, whether living in an HDB flat or owning private property.

This article breaks down, in clear terms, how property tax works for:

• HDB flats
  
• Private residential properties
  
• Owner-occupied vs non-owner-occupied homes
  
• Investment properties
  
• Tenanted units
  
  

We’ll also explain what to do if your property was wrongly classified and the penalties for incorrect declarations.

How Property Tax Is Calculated in Singapore: The Core Formula

Property tax is not based on your purchase price or your outstanding loan.

It is based on:

Property Tax = Annual Value (AV) × Property Tax Rate

What is Annual Value (AV)?

AV is IRAS’s estimate of the yearly rental income your property could fetch if rented out, even if you are not renting it out.

IRAS reviews AV yearly based on market rental trends, location, and property type.

Higher rental market = higher AV = higher property tax.

That is why many owners see jumps during years when rental prices spike.

Property Tax Rates for 2025: Owner-Occupied vs Non-Owner-Occupied

Property tax depends on your classification, not the property type.

There are two categories:

1. Owner-Occupied Residential Property

This applies if you live in the property as your main home.

Owner-occupied tax rates are much lower because the purpose is not income-generating.

(Current 2024–2025 owner-occupied rates, progressive)

• First $8,000 AV → 0%
  
• Next $22,000 → 4%
  
• Next $10,000 → 6%
  
• Next $15,000 → 10%
  
• Next $15,000 → 14%
  
• Next $15,000 → 20%
  
• Excess → 28%
  
  

For HDB owners, this means tax is usually extremely low, often less than $100–$200 per year.

2. Non-Owner-Occupied Residential Property (Investment Property)

If the property is:

• Tenanted
  
• Vacant but not occupied by you
  
• A second home
  
• A property held by a company
  
  

Then non-owner-occupied rates apply, much higher because the property is considered an investment asset.

(Current 2024–2025 non-owner-occupied rates, progressive)

• First $30,000 AV → 12%
  
• Next $15,000 → 20%
  
• Next $15,000 → 28%
  
• Next $15,000 → 36%
  
• Excess → 44%
  
  

This explains why landlords pay far more tax than owner-occupiers.

How Property Tax Works for HDB Flats

If you live in your HDB

You enjoy the owner-occupied rates.

AVs for HDBs range roughly:

• 3-room: $10,200 – $12,000
  
• 4-room: $11,400 – $14,400
  
• 5-room: $13,200 – $17,400
  
• Executive: $16,800 – $21,600
  
  

Owner-occupied tax for most HDBs is very low (often <$200 per year).

If you rent out your entire HDB unit

IRAS classifies it as non-owner-occupied, even if:

• You own only one property
  
• You are overseas
  
• Your family lives elsewhere
  
  

This means you pay much higher tax.

How Property Tax Works for Private Properties

If you live in your private home

Owner-occupied rates apply.

Example:
A condo in Bishan with AV $36,000:

• First $8k → 0% = $0
  
• Next $22k → 4% = $880
  
• Remaining $6k → 6% = $360
  
  

Total tax = $1,240/year

If your private home is non-owner-occupied

Non-occupier rates apply.

Same condo, AV $36,000:

• First $30k → 12% = $3,600
  
• Remaining $6k → 20% = $1,200
  
  

Total = $4,800/year
(≈ 4× the tax)

Why Your Property May Be Classified Wrongly

Classification is based on your live-in declaration.

But mistakes happen when:

• You recently moved out after renting
  
• Your tenancy ended
  
• You moved into another property
  
• Your private home is vacant
  
• You bought a new property
  
• Married couples switch the stay-in property
  
• Decoupling changed ownership
  
• Children move out and property becomes vacant
  
  

IRAS DOES NOT automatically know where you live.
You must update them.

If classification is wrong, your tax bill can jump dramatically.

How to Check Your Classification

Go to:

myTax Portal → Property → View Property Portfolio

Under each property you will see:

• Owner-Occupied
  or
  
• Non-Owner-Occupied
  
  

Always verify annually during property tax season.

How to Update Your Property Classification (If IRAS Got It Wrong)

Step 1: Log into myTax Portal

Menu → Property Tax → “Update Owner-Occupier Status”

Step 2: Submit declaration

You must confirm:

• You live in the property as your main residence
  
• You are not receiving owner-occupier tax benefits on another property
  
• You moved in on a specific date
  
  

Step 3: Provide supporting documents (if requested)

Common requests:

• Utility bills
  
• IC address
  
• Tenancy agreement (if previous tenant just left)
  
• HDB proof of occupancy
  
  

IRAS will review in 2–6 weeks.

If approved, the tax change is backdated to the date you moved in.

What Happens if You Declared Your Property Wrongly?

Wrong declarations fall into two buckets:

1. Honest mistakes (IRAS is usually lenient)

Examples:

• You forgot to update occupancy
  
• You assumed IRAS would update automatically
  
• You accidentally declared the wrong move-in date
  
  

IRAS will:

• Backdate the correct tax
  
• Charge/refund the difference
  
• Sometimes impose a small late-payment fee
  
  

No penalty if it’s clearly not intentional.

2. Intentional misdeclaration (treated seriously)

Examples:

• Claiming owner-occupier status while renting out the unit
  
• Declaring your private rental unit as “owner-occupied”
  
• Attempting to avoid higher non-owner-occupier tax
  
• Providing false move-in dates
  
• Using fake tenancy start/end dates
  
  

Penalties include:

Back-payment of taxes owed (full amount)

• 2× the tax underpaid as penalty (up to 200%)
  • 5% late-payment fee
  • Further fines under the Income Tax Act**

IRAS investigates inconsistencies using:

• Utility consumption patterns
  
• Tenancy stamps
  
• Address change history
  
• Bank rental inflows
  
• HDB/URA rental approval records
  
  

Avoiding tax through misrepresentation is considered tax evasion, not avoidance.

Why Property Taxes Keep Increasing: Advisor’s Insight

As a mortgage advisor, several factors drive recent increases:

1. Rising market rents → AV increases

IRAS adjusts AV yearly to reflect rental demand.

2. Government use of progressive property taxes

Higher-value properties pay significantly greater tax as part of wealth-based taxation.

3. More Singaporeans owning 2nd properties

Many who decouple or invest face significantly higher non-owner-occupied taxes.

4. Policy shifts to curb speculation

Higher property taxes complement ABSD and TDSR to ensure sustainable housing prices.

How to Reduce Your Property Tax Legally

While you cannot negotiate your property tax, you can:

1. Appeal your Annual Value (AV)

If you believe AV is too high, submit an appeal with:

• Comparable rental evidence
  
• Actual lower rental income
  
  

2. Ensure correct owner-occupier status

Many owners unknowingly overpay tax for years.

3. Consider property holding structure

For investors with multiple properties, strategic ownership can optimise tax burden — but always within legal limits.

4. Avoid illegal schemes

Never attempt:

• Fake tenancy agreements
  
• Fake vacancy periods
  
• Misdeclaring owner-occupier status
  
• Rental via cash to hide income
  
  

IRAS has sophisticated detection systems.

Common FAQs About Property Tax in Singapore

1. Do I pay property tax if my property is vacant?

Yes. If you are not living there, it is classified as non-owner-occupied even if it’s empty.

2. Do I pay property tax for BTO flats before I move in?

No. BTO flats under construction have no property tax until TOP (for EC) or key collection (for HDB).

3. Can IRAS backdate tax if I update late?

Yes, both higher and lower rates can be backdated.

4. Do I pay property tax on a 2nd property even if I don’t rent it out?

Yes, non-owner-occupied rates apply.

Conclusion: Understanding Property Tax Helps You Avoid Overpaying or Avoid Penalties

Property tax in Singapore is straightforward once you understand:

• It is based on Annual Value (AV)
  
• Owner-occupier rates are much lower
  
• You must update IRAS when you move
  
• Wrong declarations can result in heavy penalties
  
• Many owners unintentionally overpay due to errors
  
  

As mortgage advisors, we always recommend homeowners review:

• Your classification
  
• Your AV
  
• The accuracy of IRAS records
  
• Whether your tax bill matches your property’s rental reality
  
  

A simple check could save you hundreds, or protect you from unnecessary penalties.