MOF to introduce new laws to compel landlords to pass on property tax rebates in full to tenants

Because despite their urging, some landlords in Singapore have not yet committed to passing on the tax rebates granted to them to their tenants.

Jason Fan | April 02, 2020, 01:37 PM

The Ministry of Finance (MOF) has announced it will introduce new legislation at the next sitting of Parliament that will mandate property owners to pass on property tax rebates given them by the government in full to their tenants.

This was hinted at earlier by Deputy Prime Minister and Minister for Finance Heng Swee Keat, who said that the government may take legislative action against commercial landlords who do not pass on property tax rebates to their tenants during the Covid-19 slowdown.

Minister for Trade and Industry Chan Chun Sing also made mention of this earlier this week.

Property owners have to pass on tax rebates in full to tenants

The proposed legislation will impose an obligation on property owners to pass on to their tenants the full amount of property tax rebate, for each property tax account that is attributable to the tenanted property.

This means that if a property tax account is for premises that is wholly rented out to a tenant, the owner is required to pass on the full rebate received to the tenant.

The proposed legislation will also ensure that the rebate is passed on in a timely manner according to a prescribed timeline, and will prohibit property owners from imposing conditions when passing on the property tax rebate.

In addition, a Valuation Review Panel will be set up, in order to adjudicate disputes pertaining to the property tax rebates between property owners and tenants.

According to MOF, property owners who fail to fully pass on property tax rebates unconditionally to their tenants "without reasonable excuse" will be guilty of an offence.

Property tax rebates were issued to deal with Covid-19, but not all landlords have passed these on to their tenants

In Budget 2020 and the following Supplementary Budget, Deputy Prime Minister and Minister for Finance Heng Swee Keat announced a property tax rebate of up to 100 per cent for non-residential properties, in order to help businesses deal with the impact from Covid-19.

At those points, however, he had only urged landlords to pass on the rebates and "take care of the tenants", but did not indicate that it would be mandatory for them to do so.

The MOF says the government is "appreciative" of property owners who are fully passing on the rebate to their tenants, especially those who go a step further in reducing rentals by an amount that is greater than the rebate given.

However, MOF noted that the government has also received feedback that other property owners have not yet passed on the rebate to their tenants.

The new legislative changes will ensure that property owners who have not passed on the rebate will still do so by law.

The next sitting of Parliament will take place on April 6, 2020.

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