If your Singapore company owns an office unit, a shophouse, a warehouse, a factory or any other commercial or industrial property, you will receive an annual property tax bill from IRAS. Property tax is a tax on property ownership — it applies whether or not the property is rented out, and whether or not the company is making a profit. Understanding how it is calculated, when it is due, and how to challenge an assessment you think is wrong can save your company real money.
This guide explains how property tax works for companies that own non-residential property in Singapore, how the Annual Value is determined, the flat 10% rate, payment deadlines, and how to lodge an objection.
What Is Property Tax?
Property tax is an annual tax levied by the Inland Revenue Authority of Singapore (IRAS) on the ownership of immovable property. It is entirely separate from corporate income tax, which taxes your company’s profits, and from Goods and Services Tax. A company can owe property tax on a building even in a year where it makes no income from that building at all, because property tax is charged on ownership, not on rental income.
How Property Tax Is Calculated
Property tax is calculated using a simple formula:
Property Tax = Annual Value (AV) × Property Tax Rate
The Annual Value is IRAS’s estimate of the gross annual rent the property could fetch if it were rented out, excluding furniture, furnishings and maintenance fees. IRAS determines the AV by reference to market rentals of comparable properties, and it reviews AVs periodically to keep them in line with the rental market. The AV applies whether or not the property is actually rented, and it is used for both tenanted and owner-occupied non-residential properties.
The Property Tax Rate for Companies
Non-residential properties — offices, shops, shophouses used for business, factories, warehouses, and industrial land — are taxed at a flat rate of 10% of the Annual Value. There is no progressive tiering for non-residential property, and the concessionary owner-occupier rates that apply to owner-occupied homes do not apply to commercial or industrial property, even if your company occupies the premises for its own business.
For example, if IRAS assesses the Annual Value of your company’s office unit at S$60,000, the property tax for the year is S$60,000 × 10% = S$6,000, according to the current rates published by IRAS.
| Property type | Property tax treatment |
|---|---|
| Commercial (office, retail, shophouse for business) | Flat 10% of AV |
| Industrial (factory, warehouse) | Flat 10% of AV |
| Vacant non-residential land | Flat 10% of AV |
| Owner-occupied residential (individuals) | Progressive owner-occupier rates (not available to companies for non-residential use) |
When Is Property Tax Due?
IRAS issues property tax bills in the final quarter of each year for the following year. The tax for a given year is payable in advance by 31 January of that year. Companies can pay in a single lump sum or apply to spread payment across the year through an interest-free GIRO instalment plan, which is the most convenient option for most businesses. Late payment attracts a penalty, so it is worth setting the deadline into your annual compliance calendar.
Rental Income Is Also Taxable — Separately
It is important not to confuse property tax with income tax. If your company rents out its property, the rental income is part of the company’s taxable income and is subject to corporate income tax at the prevailing rate. Property tax paid on a tenanted property is generally deductible against that rental income. The two taxes operate independently: property tax on ownership, income tax on the profit from letting.
Deductions and Related Costs
Where a company earns rental income from a property, it can typically deduct property tax, mortgage interest, and maintenance costs against that income. Companies fitting out a commercial space for their own use should also look at the Section 14Q renovation and refurbishment deduction, which allows qualifying renovation costs to be written off over three years.
How to Object to Your Annual Value
If you believe the Annual Value assessed by IRAS is too high — for example, because comparable rents have fallen or the property’s condition has changed — you can file an objection. Key points to note:
- File your objection within the statutory window stated on your Valuation Notice, generally 30 days from the date of the notice.
- Set out clearly why you believe the AV is incorrect, with supporting evidence such as your own tenancy agreement or comparable market rents.
- You must continue to pay the property tax assessed while the objection is being reviewed; any overpayment is refunded if your objection succeeds.
Vacancy and Property Under Construction
A common misconception is that property tax stops when a commercial unit sits empty. It does not — property tax is charged on ownership regardless of occupancy, so an unlet office still attracts the 10% charge on its Annual Value. The vacancy refund that once applied to empty properties was removed some years ago, so companies should not assume relief for periods a unit is untenanted. For property under construction, IRAS assesses the Annual Value on the land, and the basis changes once the building is completed and issued its Temporary Occupation Permit. Owners of newly completed commercial developments should therefore budget for a step-up in property tax once the building is ready for use.
Worked Example
Consider a company that owns a strata office unit with an Annual Value of S$48,000. Its property tax for the year is S$48,000 × 10% = S$4,800, payable in advance by 31 January. If the company rents the unit out for S$5,000 a month, the S$60,000 of rental income is separately taxable as part of the company’s profits, but the S$4,800 property tax and other allowable outgoings can be deducted against that rental income. If, instead, the company occupies the unit itself, it still pays the same S$4,800 property tax — the owner-occupier concession does not apply to commercial property — but there is no rental income to report.
Buying or Selling Commercial Property
Property tax is only one of several costs in a commercial property transaction. Buyers should also factor in Buyer’s Stamp Duty, and — depending on the property type and holding period — possibly additional duties. Our guide to stamp duty in Singapore covers the duties that apply to property and leases. On completion, the property tax liability is usually apportioned between buyer and seller for the year of sale.
How Raffles Corporate Services Can Help
We help companies manage their property tax obligations, review Annual Value assessments, prepare and file objections, and keep property tax deadlines aligned with the rest of your corporate compliance calendar. Get in touch at [email protected] or +65 8501 7133.
This article is for general information only and does not constitute tax advice. Property tax rules and rates are set by IRAS and may change.
— The Editorial Team, Raffles Corporate Services