You have stayed in your private property for the past twenty odd years and are now thinking of selling it. Perhaps it is time to cash in on the profits of your investment or simply to right size as your children are all grown-up and have their own families. If and when you decide to sell your property, there are several things you need to do if you do not want to get on the wrong side of the Inland Revenue Authority of Singapore (IRAS).
(1) Pay Outstanding Property Tax
Everyone who owns property in Singapore, be it a HDB flat or a private property, must pay property tax. Property tax must be paid yearly in advance, by the month end of January. Before you sell your property, you must ensure that you have paid the full year tax by 31 January.
If you have not paid the full year tax and do not have a GIRO instalment plan, you should check the outstanding property tax payable and make payment before the completion of sale of your property.
To check on the outstanding property tax payable, you can use the "Check Property Tax Balance" e-Service at the IRAS portal without having to log in and click on "Proceed with search".
You can search using your property address and NRIC / FIN number or you can key in your property tax reference number. Once that is done, you then type in the verification code shown in the image and select “Search for property”. The outstanding property tax will be shown and you can proceed to make payment.
Payment can be made via the following electronic payment modes:
• PayNow
• Internet Banking Bill Payment with the following banks -
BOC, CIMB, Citibank, DBS/POSB, HSBC, ICBC, MayBank, OCBC, RHB, Standard Chartered Bank, State Bank of India and UOB.
*However for corporate account holders, only DBS/POSB, HSBC, OCBC, Standard Chartered Bank and UOB are available.
• DBS PayLah! Mobile App
• Phone Banking, which is only available for DBS/POSB, OCBC and UOB account holders who have subscribed to this service.
• DBS/POSB or OCBC ATMs
• AXS machines or mobile app
• SAM Kiosk
• SAM Web / SAM Mobile
• NETS service (only available over the counter at SingPost Offices)
• Internet Banking Fund Transfer
If you had been paying the property tax by GIRO, please consult your lawyer on the settlement of the outstanding property tax due for the rest of the year with the buyer of your property.
(2) Apportion Property Tax Liabilities
As you had already pay for the property tax for the year before you sold the property, the buyer of your property will need to reimburse a portion of property tax.
(3) Terminate any GIRO Payment Arrangements
If you were using the GIRO service to pay your property tax, remember to terminate your existing GIRO arrangement once the sale transaction is finalised. For termination of GIRO services, please contact the bank that you have the GIRO service directly.
If you are using Master GIRO, which allows you to pay your property tax, income tax, goods & services tax, and withholding tax by GIRO, you can call IRAS @1800-356-8300 or email them here to terminate your GIRO arrangement. You should inform the IRAS at least one week before the end of the month to cancel the GIRO deduction for the following month. Otherwise, your bank will continue to deduct the payment from your GIRO account for the following month.
Bear in mind to settle any overdue tax in full, before you terminate the GIRO arrangement. To check on overdue tax, you can log in to IRAS’ myTax Portal and select “Account” > “View Account Summary”.
(4) Claim for any Property Tax Relief
If you are eligible for the owner-occupier tax rates and have not applied, you can submit the application at least 6 weeks before the property is transferred to the new owner. It is important to note that the IRAS will not accept any application once you are no longer the owner of the property.
If you are successful in your application, any claim for refund of tax has to be made within 5 years of the excess tax paid.
(5) Owner-Occupier Tax Rates
The owner-occupier tax rates are progressive tax rates based on the annual value of your property. Only residential properties of higher annual value are taxed at a higher rate. Most owner-occupied properties, including all HDB flats will continue to enjoy lower tax rates.
The owner-occupier tax rate is to encourage home ownership in Singapore and
is only applicable for owners residing in their residential property. Please take note that the owner-occupier tax rates can only be applied to one home owned and occupied by an individual or a married couple.
So, if you are a married couple that happens to occupy two homes, the owner-occupier tax rates can only apply to one of the homes. This is regardless of whether it is owned jointly or separately by the spouses. To check on your owner-occupied tax rate, you can visit IRAS guide here.
(6) Notify IRAS of the Property Transfer
Your appointed lawyer would usually do the task of notifying the IRAS of the sale or transfer of your property within one month of the transaction. If the lawyer has done so, you are not required to inform the IRAS separately to inform them.
If you continue to receive the Valuation Notice or bill from IRAS more than one month after the transaction, please check and confirm with your lawyer if he had filed the Notice of Transfer.
Filing of a Notice of Transfer can be done via the IRAS portal at no cost. You just need to login with your Singpass. Information required for filing includes:
• Sale and Purchase Agreement;
• Identification numbers of the transferors/ transferees*;
• Nationalities and Dates of Birth for non-Singapore Citizens; and
• Names (according to the identification documents) of non-Singapore Citizens.
(7) Seller’s Stamp Duty (SSD)
If you are selling your property within 4 years of buying it, you may need to pay SSD within 14 days of the date of Contract/Agreement.
Please check with your lawyers whether you are required to pay SSD based on your circumstances. For details on SSD, you can refer to IRAS website on Stamp Duty.
So there you have it, important things that you need to do before you sell your private property.
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