Friday, April 13, 2018

Who pays the property tax?

Some people complain that they should not be required to pay property tax on leasehold properties. They argue that the land owner should pay the property tax, and not the leashold owners.

I do not accept this argument.

Under the law in Singapore and in most countries, the property tax is paid by the owner who tenanted their properties for short term leases, say three years or shorter.

When the lease is for a longer term, the lease agrement will specify who pays the property tax. Usually, it is the lease holder.

It does not really matter. If the owner pays the property tax, they will add it to the rental of the property. If the tenant pays the property tax, they will pay a lower rental.

So, it is more practical for the owner to pay the property tax for short term leases, as the tenant may change every few years.

However, for long leases, say 30 years to 99 years, it is more practical for the lease holders to pay the property tax.

Tan Kin Lian

1 comment:

Jon Sigurdsson said...

Good point, everything depends on the lease agreement
Tax Specialist

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