In case you missed it, here's why there are new property tax rules

Prices have soared over last 2 years.

According to Knight Frank, from the government’s viewpoint, a progressive property tax structure allows greater social equity without hurting economic competitiveness or reducing the incentives for enterprises. 

With an increase in the progressiveness of the property tax system and higher property tax rates for high-end residential properties and especially investment properties, the government is aiming to ensure social fairness.

Here's more from Knight Frank:

The property tax is a wealth tax and is applied irrespective of whether the property is lived in, vacant or rented out. Those who live in the most expensive homes should pay more property taxes than others.

Residential property prices have continued to rise over the last 2 years, with the URA All Residential Price Index posting a 9 per cent increase and the HDB Resale Price Index at 18 per cent as at 4Q 2012.

Many middle and lower income groups are finding harder to secure an affordable home and this is becoming a bugbear for policy makers.

The new property tax policies could hopefully control property prices by moderating property investment demand.

With the highest ABSD applicable for foreign homebuyers, the previous cooling measures have reduced foreign demand for properties in Singapore where the proportion of non-Permanent Resident buyers fell from 11.9 per cent in 2010 and 17.6 per cent in 2011 to only 6.3 per cent in 2012.

However, the residential property market remained buoyant with a continuous surge in developers’ sales volume in January 2013.

The new tax policies target property investment demand in the long run as taxes are payable annually.