1. Highlights of Property Tax Changes with effect from 2014 1

2. Outline 2 What are the New Progressive Property Tax Rates? Removal of Vacancy Refund How will the Changes Impact my Conveyancing Practices?

3. What are the New Progressive Property Tax Rates? Recap of 2013 Budget Announcement  Two sets of Progressive Property Tax Rates for Residential Properties to take effect from 1 Jan 2014  Owner-Occupier Tax Rates  Residential Tax Rates Policy Intent  These new property tax rates increase the progressivity of the property tax structure by  taxing higher annual value properties more  taxing investment properties more than owner-occupied homes 3

4.  Applies to properties granted with owner-occupier concession Summary of Changes  First $8,000 Annual Value is not taxable, threshold increased from $6,000 previously  Increase from 3 tax rate tiers (0%,4%,6%) to 9 tiers (0% to 16%)  Phased increase in tax rates in 2014 and 2015 4 Owner-Occupier Tax Rates

5. [Owner-Occupier Tax Rates] (for Owner-Occupied Residential Properties) Annual Value (AV)Effective 1 Jan 2014 Effective 1 Jan 2015 First $8,0000% Next $47,0004% Next $5,0005%6% Next $10,0006% Next $15,0007%8% Next $15,0009%10% Next $15,00011%12% Next $15,00013%14% AV in excess of $130,00015%16% 5 Owner-Occupier Tax Rates

6.  Applies to Non-Owner-Occupied Residential Properties ie. vacant or let-out S ummary of Changes  Change from flat rate of 10% to a 6-tiered tax structure (10% to 20%)  Phased increase in tax rates in 2014 and 2015 Residential Tax Rates 6

7. [Residential Tax Rates] (for Non-Owner-Occupied Residential Properties) Annual Value Effective 1 January 2014 Effective 1 January 2015 First $30,00010% Next $15,00011%12% Next $15,00013%14% Next $15,00015%16% Next $15,00017%18% AV in excess of $90,00019%20% 7 Residential Tax Rates

8. Illustration of Tax Computation First $30,000 @ 10% = $3,000 Next $15,000 @ 11% = $1,650 Next $ 5,000 @13% = $ 650 [Residential Tax Rates] First $8,000 @ 0% = $ 0 Next $42,000 @ 4% = $1,680 [Owner-Occupier Tax Rates] 8 You may use our Property Tax Calculator (www.iras.gov.sg > Quick Links > Tax Calculators > Property Tax ) to calculate tax for different periods.

9. Scope of Residential Properties If the following residential properties are used for any period as any of the following with URA’s approval, it will not fall within the scope of the progressive property tax rates but continue to be taxed at the flat rate of 10% (a)accommodation facilities within any sports and recreational club; (b)a chalet; (c)a child care centre, students care centre, or kindergarten; (d)a welfare home; (e)a hospital, hospice, or place for rehabilitation, convalescence, nursing or other similar purpose; (f)a hotel, backpackers’ hostel, boarding house, or guest house; (g)a serviced apartment; (h)staff quarters that are part of any property exempted from tax under section 6(6) of the Act; (i)a students’ boarding house or hostel; (j)a workers’ dormitory. 9

10. Non-Residential Properties  Remains at flat rate of 10%  Applies to 1.Commercial & Industrial properties 2.Land parcels (including Residential Land) 3.Properties with approved use listed in the slide 9 10

11. Legal Requisition Reply Prior to 2014, the tax rate indicator reflects as “Owner-Occupier” and “10%” From 1 Jan 2014, the tax rate indicator on the Legal Requisition reply would reflect as  Owner-Occupier  Residential [For Non-Owner-Occupied Residential Properties]  Non-Residential [remains at 10% tax rate] 11

12. Removal of Vacancy Refund Summary  Removal of Vacancy Refund from 1 Jan 2014  Claims for vacant periods from 1 Nov 2012 to 31 Dec 2013 (both date inclusive) is to be submitted by 31 Mar 2014  Vacant properties will be taxed at prevailing tax rates 12 Policy Intent  PT is a tax on property ownership, and should be levied irrespective of whether the property is vacant or occupied.  To maintain equity and consistency in our tax treatment of all properties.

13. How will the changes impact my Conveyancing Practices?  For properties transferred in 2014, please use the new tax rates to complete the apportionment of taxes between buyer and seller  Please CEASE the handing out of hard copy application forms for owner-occupier tax rates  For SC and PR clients, IRAS will auto-grant the owner- occupier tax rates upon transfer if they are eligible 13

14. How will the changes impact my Conveyancing Practices?  Please remind your clients to submit their claim for Vacancy Refund for the period for 2013 by 31 Mar 2014 or at least 6 weeks before completion of sale, whichever is earlier 14

15. 15 Thank You