The basis for determining and revising the AV of buildings, land and development sites, and specialised properties. The AV of buildings is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees. It is determined based on
estimated market rentals of similar or comparable properties and not on the actual rental income received. Please see case study of AV of residential properties (PDF, 58KB) for a better understanding on how AV is determined. The way the AV is determined is the same regardless of whether the property is owner-occupied, vacant or rented out. The property tax payable is derived by subsequently applying the relevant tax rate (%) on the AV.
Factors Considered in Determining AV of BuildingsIn determining the AV of a building, IRAS considers:
Determining AV of Land and Development SitesThe AV of land and development sites is determined at 5% of the estimated freehold market value. This applies to both vacant land and land under construction. Determining AV of Specialised PropertiesSpecialised properties are properties that are rarely rented out such as refineries, petrochemical and power plants. The AV of specialised properties may be assessed using the following methods:
Statutory FormulaThe AV of the property may be determined based on 5% of the freehold capital value.
Other Valuation MethodsThe AV of the property may be determined using methods such as Profit's Method and Contractor's Test. This involves using costs and receipts to estimate the market rents of the properties. For hotels (PDF, 152KB) and ports, their AV will be determined using the Statutory Gross Receipts Method. For more details, please refer to the following e-Tax Guides:
Review of the AVIRAS reviews the AV of properties yearly to reflect the changes in the market rental values of comparable properties. The AV will be amended if the latest market rent data no longer support your existing AV. If your property undergoes physical change that could materially affect its rental value, IRAS will also revise your AV from the date of change. IRAS will send property owners a Valuation Notice informing them of any upward or downward adjustment to the AV and the date when it is to take effect. Checking the AV of your PropertyYou can check the AV of your property using our 'View Property Dashboard' digital service. All AVs shown are as at current date. Please note that if there is any change to the AV stated in your Jan bill, it will only be reflected on the digital service from the effective date of change. You can also check the AV of any property using the Check Annual Value of Property at a fee of $2.50 per search. FAQsAssessment of Annual Value (AV)
Why is IRAS using rentals instead of sale prices to determine AV?IRAS uses the annual market rent of comparable properties to determine the AV instead of transacted sale prices because:
Objection Matters
Can I object to the AV?You can object to the AV and/or its effective date within 30 days from the date of the Valuation Notice . If you do not receive the Valuation Notice, you can also object to the AV at any time in the year if you can show that the market values have dropped to below the AV. You cannot, however, object to the tax rates.
If my objection is disallowed, can I appeal?Yes. You can appeal to the Valuation Review Board (VRB) within 30 days of the notice on the outcome of your objection. You need to pay the following fees to VRB: $50 for a residential property taxed at owner-occupier tax rates; or $200 for any other property. In your appeal, you need to state the grounds of your appeal and indicate whether you are represented by any agent. Is land measured at historical cost?Land is always reported at historical cost on the balance sheet and would remain at historical cost since land is not depreciated. In addition, there is no fair value adjustment unless the land is sold or is part of a transaction.
What type of theory is historical cost?Historical cost is usually described as a pragmatic theory whereby premises are determined by observing the practice of accountants.
Is market value the same as historical cost?Historical cost accounting and mark-to-market, or fair value, accounting are two methods used to record the price or value of an asset. Historical cost measures the value of the original cost of an asset, whereas mark-to-market measures the current market value of the asset.
What is historical market value?The historical value of an item or piece of property, also referred to as historical cost, is the initial purchase price of an asset. Over time, the value of an item may change based on market conditions, resulting in a conflict between the historical cost of an asset and its fair value, or market price.
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