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Singapore Budget 2010 And How It Affects You

>> Monday, February 22, 2010

(A) Shift to a Progressive Property Tax Regime

Currently, owner-occupied residential properties are taxed at a concessionary 4% rate.
For property tax payable from January 2011, 3 tiers of property tax rates for such properties will be introduced – 0%, 4% and 6%:

* 0% for the first $6,000 of AV;
* 4% for the next $59,000 of AV;
* 6% for the balance of AV in excess of $65,000.

Non-owner-occupied residential properties and other properties will continue to be subject to 10% property tax.

(B) Increasing Tax Reliefs for Families

(B1) Enhancing Parent Relief (Enhanced)
To provide greater recognition for those who are looking after parents, grandparents and great-parents, the parent relief will be increased to:

1. $7,000 (from $5,000 currently) for taxpayers who are staying with their dependants;
2. $4,500 (from $3,500 currently) for taxpayers who are not staying with their dependants;
3. $11,000 (from $8,000 currently) for taxpayers who are staying with their handicapped dependants; and
4. $8,000 (from $6,500 currently) for taxpayers who are not staying with their handicapped dependants.

These changes will be implemented from Year of Assessment 2010.

(B2) Enhancing Wife Relief to Spouse Relief (Enhanced)
With effect from Year of Assessment 2010, the Government will allow wives who are taxpayers to claim a spouse relief of $2,000, similar to the current scheme for husbands. This will help families where the wife is the breadwinner, for instance where the husband has retired. Accordingly, wife relief will be renamed as “spouse relief.”

(B3) Raising of Income Threshold of Dependants for Taxpayers to Claim Dependant-Related Reliefs (Enhanced)
Currently, the income of the dependant cannot exceed $2,000 in the preceding year if a taxpayer wishes to claim dependant-related reliefs
The Government will increase the income threshold for dependant-related reliefs from $2,000 to $4,000.
The Government will also remove the income threshold for handicapped dependant-related relief.

The changes for the dependant-related reliefs will be implemented from Year of Assessment 2010, except for the CPF Cash Top-up Relief for top-ups to the CPF accounts of spouse and siblings (for which the changes to the income threshold will be effective from Year of Assessment 2011).

(C) Increase Course Fee Relief

To support for lifelong learning, the Government will increase the course fees relief from $3,500 to $5,500 with effect from Year of Assessment 2011.

(D) Support for Charitable Giving

The Government will extend for an additional year, the tax deduction of 250% for approved donations.

(E) Measures to Support Households

(E1) Top-up to Central Provident Fund-Medisave Accounts (CPF-MA) (Enhanced)
The Government will provide a one-off top-up to the CPF-Medisave Accounts of older Singaporeans.

(E2) Top-ups to Medifund and ElderCare Endowment Fund (Enhanced)
The Government will set aside in Budget 2010 $200 million each for Medifund and ElderCare Fund.

(E3) Top-up to Post-Secondary Education Account (Enhanced)
The Government will provide a top-up of $230 million to the Post-Secondary Education Account (PSEA) accounts of young Singaporeans.

(F) Raising Productivity

(F1) Introduction of Workfare Training Scheme (WTS) (New)
The Government will introduce a three-year Workfare Training Scheme (WTS) to complement the Workfare Income Supplement (WIS) scheme. The WTS will:

  • Subsidise 90% to 95% of absentee payroll and course fee outlay for employers, when they send their older low-wage workers for training;
  • Provide cash grants, capped at $400 per year, when WIS recipients complete their training;
  • Introduce a structured training programme for those with very low skills, including those who are unemployed.
(F2) Enhancement of Workfare Income Supplement (Enhanced)
The Government will enhance the Workfare Income Supplement (WIS) as follows:
  • Higher payouts. Maximum payouts for the WIS will be increased by between $150 and $400, with more going to older workers to encourage them to remain in the workforce;
  • Extension to more workers. Those earning up to $1,700 per month will now be eligible for WIS, up from the current limit of $1,500 per month.

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