What is the defined value of a property?

The basis for determining and revising the AV of buildings, land and development sites, and specialised properties.

Determining AV of Buildings

The AV of buildings is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees. It is determined based on estimated market rentals of similar or comparable properties and not on the actual rental income received.

Example 1: AV of Flat

Please see case study of AV of residential properties (PDF, 58KB) for a better understanding on how AV is determined.

The way the AV is determined is the same regardless of whether the property is owner-occupied, vacant or rented out.

The property tax payable is derived by subsequently applying the relevant tax rate (%) on the AV.

In determining the AV of a building, IRAS considers:

1. rentals of similar or comparable properties in the vicinity;
2. the size of the property;
3. location of the property;
4. the condition of the property; and
5. other relevant physical attributes.

Determining AV of Land and Development Sites

The AV of land and development sites is determined at 5% of the estimated freehold market value. This applies to both vacant land and land under construction.

Determining AV of Specialised Properties

Specialised properties are properties that are rarely rented out such as refineries, petrochemical and power plants.

The AV of specialised properties may be assessed using the following methods:

The AV of the property may be determined based on 5% of the freehold capital value.

The AV of the property may be determined using methods such as Profit's Method and Contractor's Test. This involves using costs and receipts to estimate the market rents of the properties.

For hotels (PDF, 152KB) and ports, their AV will be determined using the Statutory Gross Receipts Method.

For more details, please refer to the following e-Tax Guides:

• Tax Guide on Treatment of Fixed Machinery under the Property Tax Act (PDF, 84KB)
• Investor's Guide to Property Tax (PDF, 125KB)

Review of the AV

IRAS reviews the AV of properties yearly to reflect the changes in the market rental values of comparable properties. The AV will be amended if the latest market rent data no longer support your existing AV.

If your property undergoes physical change that could materially affect its rental value, IRAS will also revise your AV from the date of change.

IRAS will send property owners a Valuation Notice informing them of any upward or downward adjustment to the AV and the date when it is to take effect.

Checking the AV of your Property

You can check the AV of your property using our  'View Property Dashboard' digital service. All AVs shown are as at current date.

Please note that if there is any change to the AV stated in your Jan bill, it will only be reflected on the digital service from the effective date of change.

You can also check the AV of any property using the Check Annual Value of Property at a fee of $2.50 per search.

FAQs

Assessment of Annual Value (AV)

IRAS uses the annual market rent of comparable properties to determine the AV instead of transacted sale prices because:

1. There are generally more rental transactions than sales transactions. A higher number of transactions gives a more accurate picture of market activity.
2. The movements in sale prices are more volatile than rentals prices. Hence, using rental transactions to derive the AV helps to keep property tax more stable for property owners. Other countries like Hong Kong and Malaysia also adopt the same practice of using market rents to determine the AV.
3. Using historical purchase price to determine AV would be inequitable towards newer owners. This is because the prices of similar and comparable properties can change over time. For instance, newer owners may have a higher AV than those who bought properties in the past if properties prices increase over time.

Objection Matters

You can object to the AV and/or its effective date within 30 days from the date of the Valuation Notice . If you do not receive the Valuation Notice, you can also object to the AV at any time in the year if you can show that the market values have dropped to below the AV. You cannot, however, object to the tax rates.

Yes. You can appeal to the Valuation Review Board (VRB) within 30 days of the notice on the outcome of your objection. You need to pay the following fees to VRB:

$50 for a residential property taxed at owner-occupier tax rates;

or

$200 for any other property.

In your appeal, you need to state the grounds of your appeal and indicate whether you are represented by any agent.