Budget 2022: Singapore’s wealthy will pay higher income tax and property tax
SINGAPORE – Singapore’s wealthiest will face higher income taxes as well as higher taxes on their luxury properties and cars, Finance Minister Lawrence Wong said on Friday (February 18) as they are called upon to help to build a fairer society.
In his budget speech, Mr. Wong noted that “there is room for greater progressivity, so that those who earn more contribute more.”
Wealth taxes play an important role in the tax system, he added.
“In addition to generating income, they also help to recirculate part of the stock of wealth in our economy and, in doing so, to reduce social inequalities.
Here is a summary of the changes to taxes on the wealthy:
Currently, taxable income over S$320,000 is taxed at 22%.
From tax year 2024, the top marginal personal income tax will be raised.
Share of taxable income and corresponding tax
- Above S$320,000 up to S$500,000 — 22%
- Above S$500,000 up to S$1 million — 23%
- More than S$1 million — 24%
Mr Wong said the increase is expected to affect the top 1.2% of taxpayers and will generate S$170 million in additional tax revenue per year.
Property taxes, the current main means of taxing wealth in Singapore, will be increased in two stages from 2023.
For owner-occupied residential properties, the property tax for the part of the annual value above S$30,000 will be increased from the current range of 4-16% to 6-32%.
The Department of Finance said 93 per cent of owner-occupied properties – such as all Housing and Development Board flats, most condominiums and low-value land properties – will not be affected.
For residential properties not occupied by the owner, including investment properties, the current tax rates which vary between 10 and 20% will be increased to 12 and 36%.
Once fully implemented, Wong said the changes would increase Singapore’s property tax revenue by around S$380 million a year.
A new tier for Additional Registration Fee (ARF) will be introduced for cars at a rate of 220% for the part of the open market value above S$80,000.
Here are the new TAR rates:
- First S$20,000 — 100%
- Next S$30,000 — 140%
- Next 30,000 Singapore dollars — 180%
- Above S$80,000 — 220%
Mr Wong said the new tariffs will apply to all cars registered with a Certificate of Entitlement (COE) obtained in the second COE tender this month.
The additional ARF, Mr Wong said, is expected to generate S$50 million in additional revenue per year.