The annual value of your property helps the government decide the wealth of a household. Based on this and other criteria such as assessable income, the government decides how much it should give and take from us folks; examples of “give” comes in the form of Covid-19 income relief schemes and GST vouchers, while “take” refers to the property tax each of us need to fork out every year.
In short, it’s always good to know what a home’s AV is, especially if you’re about to buy or rent that home.
But what is the definition of the annual value of property and how is it calculated? Let’s find out.
What is Annual Value of Property (AV)?
Every property has an annual value. The straight-up definition of the Annual Value (AV) of a residential property is the estimated gross annual rent that a homeowner can collect if he/she rents out the property. This is excluding furnishings, furniture and maintenance fees.
The Inland Revenue Authority of Singapore (IRAS), which determines the AV of properties in Singapore, additionally clarifies that AV is determined “based on estimated market rentals of similar or comparable properties and not on the actual income received”.
IRAS also updates the AV of properties on an annual basis to reflect changes in the rental market, and inform owners of any any revision to their property’s AV. IRAS additionally takes into account physical changes—such as an a major upgrade of a HDB block—that would impact a property’s annual value.
Here’s a case study of how the AV of a residential property is calculated for an individual:
Andy owns a three-bedroom condo unit at Tanah Merah with a floor area of 1,200 square feet (sq ft). Originally an owner-occupier, Andy now rents out the whole unit, fully furnished, at $3,800 a month.
To calculate the Annual Value (AV) of Andy’s property, IRAS uses the market rentals of similar or comparable properties within his development (i.e. those of the same unit type and roughly the same floor area within the same condo).
Let’s say that are 5 comparable rentals with amounts ranging from $3,400 to $3,700. IRAS considers these other rental transactions (not Andy’s) and discounts the cost of furnishing, furniture and maintenance fees, which actually reduces the actual value per month to about $2,000, ultimately giving Andy’s property an annual value of $24,000 (i.e. $2,000 x 12 months).
If Andy was an owner-occupier instead of a landlord, the AV remains the same. The only difference is that, for a property with the same AV, it would be taxed less if it is owner-occupied, rather than being rented out or left vacant.
(Note that most government schemes and subsidies also exclude those who own two or more properties. Also, an AV of $24,000 in this case would make anyone living in that property ineligible for recent schemes such as the Self-Employed Person Relief Scheme (SIRS)—even Andy’s adult son—although an appeal might be possible.)
How does my property’s annual value compare to others?
The Singapore government publishes median annual values for all types of residential property in Singapore. As of 14 April 2020, the figures for the previous year have yet to be released. Here’s the 2018 figures:
|Median Annual Value
|HDB||1- or 2-room||5,100|
|Executive & Others||10,680|
|Private||Non-landed (including ECs)||22,200|
Note the wide gap between the annual value of HDB flats and the annual value of private property. Typically, an AV of $10,000 or less will cover all those who stay in a 1, 2, 3-room HDB flat and most residents of 4-room HDB flats. An AV of between $10,000 and $15,000 will cover most of those staying in 5-room HDB flats and less valuable private properties. An AV of more than $25,000 includes the top 10% of the population who stay in more valuable private properties.
[Recommended article: Property tax in Singapore: What and how much you should be paying]
How can I check the AV of a property?
You can check the AV of your own property free-of-charge using the View Property Portfolio e-Service on IRAS’ website. Other than that, you can also check the AV of any other property in Singapore using the Check Annual Value of Property tool, with a fee of $2.50 per lookup.
What if I disagree with the AV of my property?
If you want to dispute the AV that IRAS has assigned to your property, you may go to mytax.iras.gov.sg to e-File an objection to your property annual value using the Notice Number of your latest property tax notice.
You can retrive your last property tax notice via the IRAS MyTax portal. If you’re unsatisfied with the outcome of the appeal, you may choose to pay some money to appeal further to the Ministry of Finance (although we’ve yet to personally hear of someone taking such a big issue with his/her home’s AV).
I bought a house. Will the government consider the AV of my new home or my old one?
For homebuyers, your new address is automatically updated with IRAS for property tax filing purposes. Your property tax, which is to be paid by 31 January each year, is based on the property you own/owned in the previous year, and will be pro-rated if you sell or buy property in that year. And if your home is a newly completed property, the AV will be available within one year of the issuance of the Temporary Occupation Permit (TOP).
For purposes of receiving government schemes, vouchers and payouts, the AV is based on the latest place of residence stated in your last IRAS’ property tax assessment. If you’ve moved house in the past year and have not filed your property tax or received your property tax notification by the time a scheme is announced, then the AV of your new residence isn’t used to determine your eligibility or allotment.
For those who are renting, the AV of the property that’s taken into consideration is the address on your NRIC as of 31 December in the previous year.
What about someone who stays in an old age home, nursing home or community hospital?
He/she will be considered to have an AV of $6,000 or less.
Have other questions about the annual value of your property? Let us know in the comments section!
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