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A residential property left vacant is taxed on the non-owner-occupier scale

A worked RES examination question on property tax annual value, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 2Lesson 8Property tax annual valueFree — no sign-up

The question

Mr Rajan owns three Singapore properties throughout 2026: a condominium he lives in (Annual Value $48,000), a second condominium he leaves fully vacant (Annual Value $40,000), and a shop unit from which he runs his own trading business (Annual Value $54,000). He assumes that because he personally occupies the shop, it will be taxed at the lower owner-occupier rates. He has never written to IRAS about how any of the three properties are used, and 2026 is the first year in which he owns all three at the same time, so he wants each one classified correctly before the bill arrives.

Consider the following statements.

  1. (i) The condominium Mr Rajan lives in is taxed on the owner-occupier progressive scale.
  2. (ii) The shop unit qualifies for owner-occupier rates because Mr Rajan occupies it himself.
  3. (iii) The vacant condominium is taxed on the non-owner-occupier progressive scale.
  4. (iv) The shop unit is taxed at a flat 10% of its Annual Value.
  1. A. (i), (iii) and (iv) only
  2. B. (i), (ii), (iii) and (iv)
  3. C. (iii) and (iv) only
  4. D. (i) and (iii) only

The answer, and why

Answer: A

The rule. The owner-occupier concession applies only to residential property the owner actually lives in. Non-residential property (a shop, office or factory) is taxed at a flat 10% of Annual Value even when the owner occupies it — classification, not occupation, controls. A residential property left vacant is taxed on the non-owner-occupier scale.

Why A is correct. (i) the home Mr Rajan lives in → owner-occupier scale; (iii) the vacant condo → non-owner-occupier scale; (iv) the shop → flat 10%. Only (ii) is false: occupying a shop does not unlock owner-occupier rates.

The other options.

  • B adds the false (ii).
  • C drops the true (i), his owner-occupied home.
  • D drops the true (iv), the flat 10% on the shop.

Exam note. Owner-occupation of a commercial unit does not win owner-occupier rates — a shop is a flat 10% however it is used.

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