‘SICK AND TIRED’ OF TAX INCREASES
Owners who spoke with CNA were split on their views on the ride.
Mary (pseudonym) said in an email to CNA that she was “shattered” by the latest non-owner occupied property tax hike.
The 58-year-old who works in the electronics industry said she came from a “very poor family” and worked hard to achieve a higher income – enough to own two properties, one of which is rented.
“The government is still focused on helping people with low and middle incomes. Have they ever thought that there are people who choose not to work hard and study hard…to enjoy financial benefits from the government? ” she says.
Currently, Mary pays about S$1,200 in property taxes per month, which is about S$15,000 in property taxes for 2021, she told CNA.
Raising property taxes should be done “on a case-by-case basis”, she added.
“Some people inherit it from their parents and they may not be rich but they have to pay high taxes. Some people have worked very hard, like me, but I have to pay high taxes. For example, my company gave a monthly salary increase of S$300, but I had to pay S$400 more per month because I have a second property,” she said.
“Some people are very wealthy and can easily afford real estate; tax is nothing to them as they are cash rich. Some wealthy people evade taxes by using their children’s names to buy property – I know friends who have done this.
Mary said she might consider selling her investment property as she is “fed up” with rising taxes and has “no way” to continue “incurring high taxes”.
But it will not increase the rent of its tenants to cushion the impact of the tax hike, because the rental market is “very competitive”.
‘ALWAYS DOABLE’ TAX INCREASE, HELPS LOW INCOME
On the other hand, another owner who only wanted to be known as Li Fen told CNA that the tax increase is “still doable.”
“It’s really painful, it will definitely affect you, but only because we consider it more than S$1,000, almost S$2,000. But if you divide it monthly, it’s a couple hundred dollars. So I think that it’s still doable,” said the 44-year-old owner of two rental properties.
Unlike Mary, the tax hike would not encourage her to sell her investment properties, she added.
“You know, there are a lot of costs involved with home ownership, you have insurance, property tax, maintenance and things like that. Indeed, maintenance costs (may be) higher than the property tax itself. So I don’t think any of this will affect the decision to sell a property, especially if you can get a good rental return. It simply reduces the rental yield.
In fact, Li Fen said that the ability to pay taxes means “you are privileged enough”, and there are people who “would rather pay taxes than be poor”.
“I can understand why the government is doing this, because you really want to tax those who can afford it. If you tax super rich billionaires and millionaires, they won’t stay in Singapore. They’re going to move somewhere else where the taxes are low, and in the end, who’s going to bear the tax burden? Normal people like us.
“So I think if you spread the tax a bit…I mean, I’m not saying don’t tax the rich. Yes, we should still tax them. But not a sudden increase.
Li Fen added that the percentage increase is “correct” because initiatives to help residents, such as the job support program, would depend on taxes.
“A lot of things went up (in price)… even before the GST (goods and services tax) was put in place. So I think the lower income group has suffered, and if we can pay a little more tax just to make their lives easier, I’m fine,” she shared.
“I don’t pay very much; the raise isn’t so bad that it’s going to bankrupt me. I may just get less rental yield. But if I can help the poor, then that’s fine with me. It’s like a redistribution of wealth.