tqx wrote:Property tax and GST got no relation at all other than they are both taxes. Like that you might as well say align Road tax with GST, align income tax with GST etc...GST is charged on a consumption basis , while property tax is charged on a recurring basis.
The government does not need additional income to redistribute wealth, we are running a surplus unlike Greece or France where taxes are high to provide money for social welfare.
It is whether the government feel a need to do that or not,if they feel a need they got the money already to do it. We are not communist or socialist so asset reallocation is not really mainstream here.
Property tax is a small trickle in the water compared to taxes like income tax and GST. If want to tax foreigner just increase their income tax lor. Also , although prices sound large at sentosa cove, foreigners cannot buy SG landed property except at gazetted area like sentosa cove.
Yes, they are all taxes, and tax is in general defined as a "charge against a citizen's person or property or activity for the support of government" in short, since consumption is the general function of human beings, governments by nature of their electoral mandate have the right to tax such consumption both as a revenue source, as well as to optimize use of current resources> GST, ERP, COE, Road tax, water conservation tax, library 'fines' all have a function, either more or less along the same scale of adjusting human behavior as well as providing for government revenue. E.g. library fines discourage users from returning books late, ERP encourages the use of public transport to alleviate congestion on limited roads.
The govt has decided NOT to have tiered GST according to consumable item type due to the difficulty in differentiating consumables of the rich from those of the poor, necessities vs luxuries, to ease accounting and so minimize tax losses due to mistake or evasion: e.g. there ar many types of rice found within supermarkets that cost anywhere between S$1/kg and perhaps even $10/kg (at least $6 I think) depending on quantity and quality (organic, novelty strains)- whilst the rich might choose $6/kg brands, the poor settle for $1/kg options (got weevils also maybe). This consistency is then balanced by compensatory legislature to which poorer Singaporeans are then awarded cash voucher amounting to at least their annualized increase in living expenses consequent to the increase in GST- an all encompassing general consumption tax.
Incidentally, property is also a discretionary item insofar as a wide variety of residential properties exists to provide varying standards of living depending on location, facilities and the occupants per unit. More luxurious properties also have built-in facilities such as private pools, tennis courts and in the case of some Sentosa sea-front bungalows, a private pier for berthing your private boat.
Of all taxes, property taxes is best aligned with GST. Indeed, with the govt's current drive to raise revenues (taxes) come 2017 [TODAY,02Mar2012(pict)], the govt could easy tier property tax further to 0% for first $10k of AV, 7% for next 50k and 10% on amt in excess of 60K. (The highest personal income tax rate is 21%, pls don't make me suggest 21% here also).
Another argument to to implement a freehold property tax could be akin to the cost of investing in gold. As I understand, some gold ETFs charge up to 0.4% p.a. as storage fees (security of a vault); PAP says that the property value in SG is reflective of the security provided to the nation by the SAF whose annual military budget is well above S$10 billion p.a., shall the govt also opt to charge an 'national military defense' (aka airport security surcharge) of 0.4% p.a. upon the latest transacted price of properties also? (That's $4K p.a. protection fee for a $1M property in addition to GST upon the AV) I'm not pushing for this but please just understand that that the excuses to increase property taxes are multifold.
"GST is charged on a consumption basis , while property tax is charged on a recurring basis."
Property taxes are charged on a recurring note simply because unlike a hamburger, property is a recurring use device. AV simply attempts to annualize property values so that property tax, aka GST for properties can be accessed.
The current tiered property tax schemes favoring owner occupancy is also full of loopholes exploitable by foreigners. Does a rich Indonesian owning a vacant a $19M 3000sqft Patterson Hill condo but listed as owner occupied enjoy the owner occupied discount tax rate (used infrequently for shopping excursions only; purpose = price appreciation)? Does IRAS really bother to counter check owner whereabouts? Does residing within the unit for a day each year also qualify as owner occupation? Is this discount a loophole that foreigners exploit whilst speculating/ investing in Singapore properties purely for monetary gain and as such promoting the formation of a property bubble?
In conclusion, residents of owner occupied private properties enjoy luxury services and facilities such as swimming pools, tennis courts and free parking, not to mention much more luxurious surroundings at a lower consumption taxes compared to the everyday goods which are taxed at 7%. It thus remains unfortunate that in Singapore, necessities like food and water are taxed at 7% whilst privately used luxuries of the rich are subject to a tax rate much less.
Rgds C6.
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HWZ:
10May2012: Luxury in Singapore taxed less than food and water...why?
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