20151202 HDB flat ‘owners’ should not pay property tax, property belongs to the state (2)

Where public housing is concerned, Singaporeans are cash cows for the PAP government. It is important to note that one doesn’t own a thing which others have control over and that includes our HDB flats. Regardless of PAP’s “HDB owner” mantra over 5 decades, our legal status remains one of “lessee”.

Annual value of HDB flats

Unlike private property, HDB flats aren’t supposed to have any annual (rental) value (AV) because lessees are expected to be living in them, not renting out. Granted there are exceptions, such as lessees working overseas, AV should be applicable only to lessees whose flats have been rented out. The rest of us should not pay any property tax.

IRAS determines the AV and defines this as “the estimated gross annual rent of the property if it were to be rented out, excluding …”.

So what has AV got to do with more than 90% of HDB lessees who do not rent out their flats? NOTHING!

PAP should not anyhow assign AVs for HDB flats which are not rented out simply because of tax collection.

Unrealistically low AV/property tax

The government is aware that it has all the while been profiting from HDB lessees. This is the reason why the AV is set unrealistically low, such as a 5-room HDB flat having an AV of only $12,000.

Whether the AV increases or decreases matters little to PAP because any amount it collects from HDB lessees is a bonus. This is because we aren’t supposed to pay any tax on property which belongs to the state.

When AV increases, PAP simply offsets the property tax increase with rebates to make itself look good. AV has been used as a tool to score political points.

Other examples of unrealistically-low AV:

Eleven years ago, the AV of an executive flat was $6,900 but one couldn’t even rent a 3-room unit for $10,000 a year.

The AV of HDB flats is really a figure plucked from thin air. 3 years ago, a relative rented a 3-room unit in Tampines for $2000 per month. The average AV of a 3-room HDB flat then should have been about $20,000 but it has remained below $10,000 since decades ago.

Singaporeans eternally grateful to PAP for paying less taxes

The table below shows the amount of property tax payable in 2016 will decrease. Singaporeans are so afraid of paying and paying that when headlines scream lower amounts coming out of our pockets, we cheer the government. Many still don’t know they have been fleeced for decades.

The PAP has rightly continued to believe that Singaporeans are daft because most have remained ignorant of the fact that we should have been paying ZERO taxes for public housing.

HDB property tax may go to zero?

HDB property tax was last raised in 2013 with an increase of $40 to $50 levied on 3-room or bigger flats. To mitigate the increase for lower and middle income lessees, a one-off $40 rebate was given. After this increase-$40/$50-then-return-$40 wayang, property taxes have been heading south since. However, the decrease (see table below) is totally disproportionate to the drop in rental.

There are about 230,000, 380,000, 220,000 and 65,000 3-, 4-, 5-room and executive flats respectively and they earn PAP less than $100 million a year in property tax. This is certainly small beer for the PAP – Temasek’s 56,924,878 Alibaba shares had unrealised losses of more than US$ 1.5 billion from June to October this year.

From the out-of-line decrease the last 2 years, it appears PAP may be quietly reducing property tax on HDB to zero, scoring political points in the process. After all, it has already collected billions in free money over the years and it would be better to get the $100 million peanut out of its way before it becomes a liability.

I hope more Singaporeans will learn to discern facts from propaganda. All public housing units belong to the government, we can’t own public property and never owned one.

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3 Responses to 20151202 HDB flat ‘owners’ should not pay property tax, property belongs to the state (2)

  1. abpap says:

    I am fairly certain they will increase the Annual Values of homes. The last time I received an Iras letter saying “congratulations. The property tax has been reduced in the current Budget blah blah blah”. A few months later I received another Iras letter telling me my home’s AV increased. In the end, I pay more. Only the 70% idiots still trust pappies

  2. Dan says:

    Come to think of it. Owner of new BTO flat is not allowed to rent out the flat during the 5 years MOP. And yet they have to pay property tax based on annual value?. It just makes no sense when IRAS stated that “if it were to be rented out” and new BTO can’t even rent it out…….

    • Phillip Ang says:

      🙂 Very good point. Thanks. There are too many issues which don’t make sense but Singaporeans too kiasi to voice out. 😦

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