Which segment will take the blow from the property tax hike?

The hike will come into effect in 2023.

The higher-end segments of both owner and non-owner occupied residential properties will be the hardest hit by the looming hike in the property tax, OCBC Investment Research said in a report.

Under the 2022 budget, property tax of owner-occupied properties, like HDB or condominiums, will be increased to 6% to 32% in 2024, applied only to the portion of annual value in excess of $30,000.

The increase will impact the top 7% of owner-occupied residential properties, OCBC said.

Meanwhile, non-owner-occupied residential properties, which include investment properties, will see a 12% to 36% hike in 2024.

Despite its impact, OCBC said the property tax hikes are still a “welcome relief,” especially for Singapore developers, given that there were talks about other potential tax increases such as capital gains tax.

“We believe Budget 2022’s new measures took into account the higher Additional Buyer’s Stamp Duty rates which were announced in December 2021,” the analyst said.

Read more: How will the property tax hike affect the residential market?