Annual Value of Property: The Number IRAS Uses to Tax Your Home (That Isn’t Your Rent or Price)
Last updated: October 2026. Not financial advice. All figures for educational reference only.
Annual Value (AV) is IRAS’s estimate of the gross annual rent your property could fetch if it were rented out, excluding furniture and furnishings, and it is the figure used to calculate how much property tax you owe — not your property’s purchase price, market value, or outstanding mortgage.
Key Takeaways
- AV is a notional annual rent, not your actual rental income, purchase price, or bank valuation.
- IRAS sets AV by comparing rentals of similar nearby properties, factoring in size, location, and condition.
- Property tax is calculated by applying progressive tax rate bands to your AV, with different (and generally lower) bands for owner-occupied homes versus non-owner-occupied or investment properties.
- You can check your property’s current AV for free via IRAS’s digital services if you are the owner, or for a small fee if you are not.
- A change in your property’s AV does not necessarily mean your tax bill changes immediately — new AVs typically apply from a specific effective date shown on your tax bill.
What Is Annual Value?
Annual Value is the foundation on which Singapore’s entire residential property tax system is built, yet it is one of the most misunderstood figures on a homeowner’s tax bill. It is not your flat’s resale value, not what you paid for it, and not your outstanding mortgage balance — it is purely an estimate of how much annual rent the property could reasonably command on the open market.
IRAS derives this estimate by looking at actual rental transactions for comparable properties nearby, taking into account the unit’s size, floor level, orientation, condition, and other physical attributes, then adjusting for the fact that a landlord renting out an unfurnished unit typically earns less than one renting out a furnished unit — AV specifically excludes furniture and furnishings from the estimate.
Because AV is a market-linked estimate rather than a fixed historical figure, it is reviewed and can be revised periodically, particularly in response to broader shifts in the rental market. A rising rental market across a neighbourhood will eventually push up the AVs (and therefore the property tax) of homes in that area, even if the homeowner has done nothing differently and has no intention of ever renting out the property.
How Does Annual Value Work in Singapore?
Once your property’s AV is set, IRAS applies a progressive property tax rate schedule to it, with separate (lower) rate bands for owner-occupied residential properties compared to non-owner-occupied ones, since owner-occupied homes are given preferential tax treatment. For owner-occupied residential property, reported 2026 bands include 0% on the first S$12,000 of AV, 4% on the next S$28,000, 6% on the next S$10,000, 10% on the next S$25,000, 14% on the next S$10,000, 20% on the next S$15,000, 26% on the next S$40,000, and 32% on any AV above S$140,000, with these owner-occupier rates effective from 1 January 2025 and applicable to the 2026 tax year.
For non-owner-occupied residential property — such as an investment unit you rent out, or a second home — reported bands are steeper: 12% on the first S$30,000 of AV, 20% on the next S$15,000, 28% on the next S$15,000, and 36% on any AV above S$60,000. This structure is deliberately designed to tax owner-occupied homes more lightly than investment or rental properties.
Because the tax is progressive, each band applies only to the slice of AV that falls within it — not the entire AV at the highest applicable rate. You can check your property’s current official AV for free through IRAS’s “View Property Summary” digital service if you are the owner, or pay a small fee (commonly cited as around S$2.50) to check the AV of a property you do not own via the “Check Annual Value of Property” service.
Annual Value Example
Suppose your HDB flat has an AV of S$50,000 and you live in it (owner-occupied). Using the progressive bands, the first S$12,000 of AV is taxed at 0% (S$0), the next S$28,000 at 4% (S$1,120), and the remaining S$10,000 at 6% (S$600). Your property tax before any rebate works out to S$1,720 — not S$3,000, which is what you would get by mistakenly applying the top rate of 6% to the entire S$50,000.
If the same unit were not owner-occupied — say you had moved out and rented it to tenants — the much steeper non-owner-occupied bands would apply instead: 12% on the first S$30,000 (S$3,600) and 20% on the remaining S$20,000 (S$4,000), for a total of S$7,600. This stark difference illustrates why staying classified as “owner-occupied” (by actually living in the property) matters significantly for your tax bill.
Advantages of Annual Value
- A fairer basis than purchase price. Because AV reflects current rental value rather than a historical purchase price, two neighbours who bought similar flats decades apart at very different prices end up paying broadly similar property tax, since both are taxed on comparable current rental potential.
- Owner-occupiers are deliberately taxed more lightly. The separate, lower rate bands for owner-occupied homes mean that people living in their own property pay substantially less tax than they would if the same unit were rented out, directly rewarding home ownership over pure investment holding.
- Transparent and checkable. Homeowners can verify their own property’s AV for free at any time through IRAS’s digital services, rather than having to guess or rely on third-party estimates.
- Progressive structure protects lower-value homes. Because the first several thousand dollars of AV are taxed at 0% or very low rates, smaller and lower-rental-value homes bear a proportionally lighter property tax burden than larger, higher-value ones.
Risks and Limitations
- Your tax bill can rise even if you do nothing. Because AV tracks the rental market, a hot rental market in your neighbourhood can push up your AV — and therefore your property tax — purely due to external market conditions, with no action or renovation on your part.
- Confusing AV with market value or purchase price leads to bad assumptions. Some homeowners mistakenly assume a rising resale price means a proportionally rising tax bill, when in fact AV and resale price can move at different rates, since AV tracks rental comparables specifically.
- Losing owner-occupier status is expensive. If you move out and rent out your flat (or otherwise lose owner-occupied status), you move onto the steeper non-owner-occupied tax bands, which can meaningfully increase your annual property tax.
- Rebate rules can change and are not always clearly sourced. Owner-occupier property tax rebates have varied across years and sources do not always agree on the exact percentage or cap in effect — always verify against your actual Notice of Assessment rather than a generic online guide.
Annual Value vs Market Value (Resale Price)
| Feature | Annual Value (AV) | Market Value / Resale Price |
|---|---|---|
| What it represents | Estimated annual rent the property could fetch | What a buyer would actually pay to purchase the property |
| Set by | IRAS, based on comparable rental transactions | The open market, based on comparable sale transactions |
| Used for | Calculating property tax payable | Buying, selling, and loan/valuation purposes |
| Includes furniture value? | No — explicitly excludes furniture and furnishings | Can factor in renovation and fittings, depending on context |
| How often it changes | Reviewed periodically by IRAS, tied to rental market shifts | Changes continuously with every market transaction |
| Where to check it | IRAS ‘View Property Summary’ / ‘Check Annual Value’ services | Property portals, bank valuations, recent transaction data |
Source: IRAS property tax guidance, 2026.
The Bottom Line
Annual Value is the quiet mechanism behind every Singapore homeowner’s property tax bill — a rental-based estimate, not a reflection of what you paid or what your home is now worth on the resale market.
Understanding AV matters because it explains two things that otherwise seem confusing: why your property tax can rise even without you doing anything, and why living in your own home (rather than renting it out) comes with a meaningful, deliberately engineered tax advantage.
Frequently Asked Questions
What is Annual Value (AV) used for?
AV is the figure IRAS uses to calculate how much property tax you owe each year — it represents the estimated annual rent your property could command, not its sale price or market value.
How do I check my property's Annual Value?
If you own the property, you can check its AV for free via IRAS’s ‘View Property Summary’ digital service; if you do not own it, you can check via the ‘Check Annual Value of Property’ service for a small fee.
Why did my property tax increase even though I didn't renovate?
This is usually because IRAS revised your property’s AV upward in response to rising rental transactions for comparable properties in your area, which directly increases the property tax calculated from that higher AV.
Do owner-occupied and rented-out properties pay the same tax?
No. Owner-occupied residential properties are taxed on a separate, lower set of progressive rate bands compared to non-owner-occupied properties, which face steeper rates.
Is Annual Value the same as my property's market value?
No. AV is an estimate of annual rental value, while market value (or resale price) reflects what a buyer would pay to purchase the property outright — the two can move at different rates.
Can I appeal my property's Annual Value?
Property owners who disagree with their assessed AV can generally lodge an objection with IRAS within a specified period after receiving their valuation notice — check the latest IRAS guidance for the current process and deadlines.