Tax collected from properties rises 9.1% to $5.1b in FY22

Huttons Asia attributed the increase to two factors.

Property tax collected for FY22 reached $5.1b, 9.1% higher than the FY221 record of $4.7b.

According to Huttons, the increase in the annual value of properties and the increase of property tax rates on 1 January bumped up the contribution of property tax to tax coffers.

Stamp duty, on the other hand, fell 12% to $5.95b in FY22.

Overall, Hutton Asia said the property was slower in FY22, primarily due to “high-interest rate and price resistance.”

“The residential resale market saw more buyers putting their purchase on hold because borrowing interest rates exceeded 4% compared to around 1% at the start of 2022. Similarly, the commercial market saw a fair bit of slowdown because the borrowing interest rate of above 4% resulted in negative carry and most institutional funds put a stop to their investment plans,” Huttons Asia said.

“The new sale market was relatively insulated from the high-interest rate due to its progressive payment structure,” the expert added. 

The rental market likewise saw a slower year.

“With the increase in completion of homes, more tenants were able to move to their new homes. Some tenants moved overseas to work after most countries ended their travel curbs. The steep rent increase meant there were some adjustments in tenant behaviour. Some of them were displaced from the CCR to RCR, some from the RCR to OCR and some to the HDB market. Some tenants chose to move into a co-living space to save on rental,” Hutton Asia said.