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SINGAPORE, March 1 — With the announcement early this week of the 2013 Singapore budget, all research groups here have agreed that the key losers will be property investors and developers, particularly those owning high-end residential units with unsold inventory.
In attempt to cushion the impact of widening income disparities, Singapore Finance Minister Tharman unveiled a budget which includes a more progressive property tax which would be implemented from Jan. 1, 2014 onwards.
The new progressive tax rate will be as high as 15 percent for the component of annual value in excess of 130,000 Singapore dollars (104,840 U.S. dollars) for owner-occupied residential properties, and 19 percent for annual values over 90,000 Singapore dollars for non-owner-occupied properties. The biggest impact will be on non-owner occupied properties.
Under the revised structure that would be fully effective on Jan. 1, 2015, the marginal tax rates will range from 12 percent to 20 percent compared to the current 10 percent. This will affect homes with annual values of more than 30,000 Singapore dollars, which represents the top one third of all non-owner occupied properties in the island-state.
Considering that the Singapore government had announced the seventh rounds of measures to cool the buoyant property market, Credit Suisse Research described the new property tax structure as “a small surprise”.