Disclaimer (Block 1): This article is for educational purposes only and is intended to assist CEA-registered property agents in understanding regulatory frameworks. It does not constitute financial, tax, or legal advice. LEVR's calculations are indicative only. Always verify rates and eligibility with your bank, HDB, CPF Board, or a licensed financial advisor before advising clients.
What Is the Annual Value?
The Annual Value (AV) of a property is the estimated gross annual rent the property would fetch if let out — excluding furniture, fittings, and service charges. IRAS uses the AV as the basis for calculating property tax. AV is set by IRAS under the Property Tax Act and is reviewed periodically to reflect current market rental levels.
Property tax is calculated as:
- Owner-occupier rate: Progressive rates from 0% to 32% on the AV (0% on the first $8,000 of AV for owner-occupier properties).
- Non-owner-occupier (investment) rate: Progressive rates from 12% to 36% on the AV.
A higher AV results in higher property tax. A lower AV reduces the annual liability. Where a property owner believes IRAS has set the AV too high relative to actual market rental levels, they can file a formal objection.
Grounds for Objecting to an Annual Value
An objection to the AV can be made on the following grounds:
- The AV is higher than the prevailing market rental. If comparable properties in the same development or area are renting at lower rates than implied by the AV, this is the primary ground for objection. The owner should gather evidence of actual rents for comparable units.
- The property is vacant and not available for letting. A property under renovation or in a condition that makes it unlettable may qualify for a reduced AV on application.
- The property has undergone damage, demolition, or structural change that materially reduces its rental value.
- Factual errors in the property record — for example, the area recorded by IRAS is incorrect.
Note: the AV reflects the estimated market rental, not the actual rent the owner is charging. Even if the actual rent is lower than the AV (because the landlord chose to offer a below-market rent), this is not a valid ground for objection on its own. IRAS sets AV based on the prevailing market, not on individual tenancy agreements.
The Objection Process
| Step | Details |
|---|---|
| 1. Notice of Assessment issued | IRAS issues a Notice of Valuation or a Valuation List update setting the new AV. This is typically issued in January or when a significant market change is detected. |
| 2. Objection deadline | The property owner has 30 days from the date of the notice to file a written objection with IRAS. Late objections are generally not accepted. |
| 3. File the objection | Objections are filed via myTax Portal (IRAS online). The owner must state the grounds for objection and propose the AV they consider appropriate, supported by evidence. |
| 4. IRAS review | IRAS reviews the objection and supporting evidence. IRAS may request additional information from the owner (e.g., actual tenancy agreements, comparable rental data). IRAS typically responds within a few months. |
| 5. IRAS decision | IRAS will either accept the objection (reduce the AV), partially accept it (set a lower but different AV), or reject it (maintain the original AV). The owner is notified of the outcome. |
| 6. Appeal to Valuation Review Board (VRB) | If the objection is rejected or only partially accepted, the owner can appeal to the Valuation Review Board within 30 days of IRAS's decision. The VRB is an independent tribunal that hears property valuation disputes. |
What Evidence to Submit
The strength of an AV objection depends on the quality of comparable rental evidence. Useful evidence includes:
- Tenancy agreements for comparable units in the same development or nearby developments, showing actual rents achieved in the relevant period
- Online rental listings (PropertyGuru, 99.co) showing asking rents for similar units at the time of the AV review
- URA or HDB median rental data for the relevant development or district (publicly available from URA REALIS or the HDB Resale Portal)
- Your own tenancy agreement if the property is rented out — this is direct evidence, though IRAS may discount it if they consider the rent below market
- Valuation report from a licensed valuer — most persuasive but also the most expensive form of evidence
Property Tax During the Objection Period
Filing an objection does not suspend the obligation to pay property tax. The owner must continue to pay property tax based on the assessed AV during the objection period. If the objection is subsequently accepted and the AV reduced, IRAS will issue a refund for the overpaid tax.
This means property owners should not withhold payment pending the outcome — late payment attracts a 5% penalty on the outstanding amount.
Vacant Property and AV Reduction
Property owners whose property is genuinely vacant and not available for letting may apply to IRAS for an AV reduction under Section 8 of the Property Tax Act. Criteria:
- The property must be genuinely vacant — not occupied by the owner, family members, or anyone else.
- It must be vacant for at least 30 consecutive days in a tax year.
- The owner must demonstrate that the property is genuinely not available for letting — not merely that a tenant has not been found at the asking rent.
Properties undergoing renovation are a common case. A property that cannot be tenanted due to renovation works may qualify — but only for the period during which works are actively in progress and the property is genuinely unlettable.
What Agents Should Know
- The AV objection window is strictly 30 days. When a client asks about their property tax assessment, confirm the date of the Notice of Valuation and calculate the deadline immediately. Missing the window forfeits the objection right for that assessment year.
- Agents are well-placed to help gather comparable rental evidence. If a client believes their AV is too high, an agent with knowledge of rental market conditions in the area can assist by compiling comparable transaction data from URA REALIS or current listing evidence.
- AV reviews affect investment property return calculations. When modelling rental yield for investment clients, factor in the prevailing AV and the applicable property tax rate — non-owner-occupier rates (12%–36%) are a meaningful cash cost.
- Refer clients to a tax professional or licensed valuer for formal objections. While agents can assist with gathering comparable rental data, a complex or high-value objection is best supported by a licensed valuer's report and filed by or with the advice of a tax professional.
Disclaimer (Block 3): LEVR's calculator outputs are estimates based on inputs provided and current regulatory parameters as known at time of publication. They are not a guarantee of borrowing capacity, stamp duty liability, or CPF eligibility. Regulatory thresholds and rates may change. Always verify with IRAS, your bank, or a licensed financial advisor before making financial decisions.