IRAS will raise the annual value of HDB flats with effect from 1st January 2010.
AV increase for HDB flats
IRAS reviews the AVs of all properties, including HDB flats, annually to ensure that they reflect prevailing market rental values for the purpose of determining property tax.
The last AV revision for HDB flats was however done two years ago on 1 January 2008, based on rental values in 2007. AVs for HDB flats were not revised on 1 January 2009, notwithstanding that HDB rentals had increased significantly (by between 31% and 37%) in 2008 relative to 2007. The adjustment in AVs was deferred in view of the uncertainty in market rental trends in the midst of the economic recession. There was evidence of declines in rental values from late 2008, with the risk of further significant declines in 2009 given the negative economic outlook at the time.
HDB rentals have stabilised after a moderate decline from late 2008 to the middle of 2009, and have since begun to rise. As a result, current values of HDB rentals, as well as HDB resale prices, are still significantly higher than levels observed in 2007. The AVs of HDB flats will therefore have to be adjusted, beyond the last revision in January 2008. IRAS will therefore revise the AVs of all HDB flat types with effect from 1 January 2010.
You can read more from IRAS’s official release here.