12/17/2014
Property Tax is a wealth tax
‘Property tax is a wealth tax, levied on property ownership.’ This is the reply from Kelly Wee, Director(Corporate Communications), Inland Revenue in her letter in the ST forum on 15 Dec. She was responding to complaints by the public about the property tax levied on HDB owners. This tax on HDB properties is now subject to a lot of public criticism as many now realized that they are but 99 year lessees. And this is not the same as 99 lessees of private properties when the latter assumed full ownership of the property during the lease with very few restrictions and no need to pay a cut to HDB when the property is sold.
The HDB ownership is cumbersome and comes with many restrictions that remind the HDB ownerships who is the real and ultimate owner. Just believe whatever you want to believe, as owners or lessees.
Property tax as a tax on the wealth of the people becomes questionable for many reasons. On face value, a HDB flat is temporary wealth on short term. In the long run, when the lease expires, it is no longer wealth. Its value is zero. Where is the wealth? Can the HDB owners ask for refund on the tax paid when the wealth is gone?
Many HDB owners are occupants of their flats. They live there for their whole life, a home, a roof over their heads. If not there is no where else to go. Other than those that rent out the flats, the only benefit is the right to live in the flats.
Compare this with private properties. These are real wealth and very big wealth. If the govt is taxing on the wealth of the people, why aim at the poor HDB owners or lessees, particularly the smaller HDB flats? Many could barely afford to pay for them. And the problem will get increasingly problematical to the retirees without an income, and still got to squeeze out whatever little savings left to pay for property tax.
Why is there no tax on the filthy rich when there is real wealth, horrendous wealth, in their estates? Why is the govt so quick in abolishing estate duties to free the very rich from paying anything from their rich estates? Are the estates of private properties in the millions and hundreds of millions not wealth? And taxing on the poor HDB flat lessees with an expiring lease as wealth? Many of the private properties and estates are freehold or 999 year lease, the real wealth, and not taxable under estate duties. Is this a case of taxing the poor and freeing the super rich from taxes?
GST is to help the poor? How many believe this story or agree to the logic of this story?
Kopi Level - Green
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24 comments:
"Why is the govt so quick in abolishing estate duties to free the very rich from paying anything from their rich estates?"
RB
Why not, when the Sinkie opposition is not ready to be govt?
When in doubt, always remember what kaki lang Teochew Ah Hia already said, and it is worth repeating, majority (aka 60%) Sinkies are very scared they accidentally vote PAP out in a GE because WP is not ready to be govt.
Why Sinkies want to make kaki lang Teochew Ah Hia party the next strongest political party after PAP?
Why not Aung Juan Soon Chee party, during the time Hainan Ah Ko was even a member and candidate?
Why they reject Hainan Ah Ko? And not once but twice, u know.
And will Hainan Ah Ko be lucky only on the 3rd time by contesting Tanjong Pagar or even AMK to defeat Mai Hum?
What do u think?
There is speculation of the real intent in abolishing estate duty. I will not add anything in the face of defamation laws. However, one effect of this measure is that the filthy rich and powerful is not required to disclose their wealth. You draw your own conclusions.
"There is speculation of the real intent in abolishing estate duty....You draw your own conclusions."
Anon 9:26 am
My speculation, not conclusion hor, is that maybe 60% Sinkies (including new Sinkies lah, of course) are rich.
If not ah, which rich foreigner want to become new Sinkie, u tell me lah?
I think the issue is not why tax the not so rich and not suck the super rich dry. The issue is what defines as a property. If we deem HDB as not a property but a rental or lease from the government, then RB is right to say they should not be taxed. The people staying in HDB are not the owners. Tax must be paid by landlord, just like private landlords must pay for property tax whiles their tenants just pay rent. One Kopi O to RB.
If we suck the super rich dry, which super rich would dare to come to Singapore ?
If super rich don't come here, where can we get the title of financial centre to employ hordes of graduates including redbean children, if they are qualified enough to join the banking sector ?
You tell me lah ? Think !
Think again!
There is one important point about abolishing estate duty. It is one of the major factor contributing to high property prices. The super rich can just buy and buy, no need to pay estate duties. If estate duties are reintroduced, the super rich would not dare to buy so many properties at any sky high prices.
Think about it.
Our property tax is a fake wealth tax, but rather a tax on the poor, and on top of that the rich get lots and lots of rebates.
Normally a property tax need to levy 1-3% base on value of property. But in SG our property tax is base of value of rent.
That is to say, a rich man with a big garden landed property with small dwelling area will pay lower tax than collective numbers HDB dwellers who actually sit on tiny plot of land.
If a rich man having 5-6 5 million bungalow is made to pay 3% of property tax base on property value, straight away our property will crash, making the poor accessible to landed property.
The unjust tax scheme is design to make the rich accumulate wealth on expense of poor, and also to make asset rise faster than wages, so that new kids on block will never make it in life, while idle old money continue to enjoy previleges living as a parasite.
It is to help the poor.
RB, you are mistaken in your view that the abolishment of estate duty encourages the super rich to buy and buy. There are lots of devises that the super rich can avail themselves of even if estate duty is payable e.g. trusts, holdings by companies, etc. The real incentive is that there is no capital gains tax.
There is a world conspiracy to help rich and corporation evade tax. The MNCs keep threatening to move out if tax rate too high. Sovereign government then keep an eye close when they cook their books and shifted their accounting BU to parasitic tax haven like SG.
In reality, once USA told Apple or Google that they will be deprive of market access unless they base their Accounts in USA, the MNC will just follow and they will pay their dues.
The problem is the government is make up of the rich and the rich is the government. These rich cook lies to tell everyone "there is no other solution than rich must get rich and poor must get screwed".
@ after 5 decades I still get confused by govt logic, redbean:
Uncle, you mean after all this time you still haven't realised that Singapore is a place where 'is' and 'isn't' can exist together. Singapore is like a qbit or quantum bit where 2 opposites states exist simultaneously, and can flip to either 1 or 0 depending on the "situation".
HDB is yours when it comes to paying taxes and asset enhancement programs which are used to buy votes for the next election. However when it comes to resale/ purchase and renovation, or renting of whole flat or rooms, then the govt agency HDB is the sole arbiter and regulator.
Similarly with CPF, it is yours and not yours at the same time.When it comes to paying into the fund, or using CPF to buy property, it is yours. However when it comes to withdrawing the money, CPF is not yours and completely controlled and legally withheld by government.
The sheer brilliance of mass manipulation is when the govt "marries" HDB with CPF. Now the amalgamation becomes a powerful tool for political control.
Even the best business schools don't teach this model of captive marketing and never-ending cash flow.
BTW I agree 100%: property tax IS a wealth tax. Taxation is a form of LEGAL extortion, sometimes theft. The point is taxes are legal.
So if the legal gangster says "Pay up!", is usually works out "less expensive" for you if you just pay up, forget it and get on with your life.
Don't fight the gangster-- they have guns, you don't. Also if you defy him, the other Sheeple will side with the thug and insist that the thug applies the necessary pressure on you until you comply.
Not one single Sheeple will come to defend your rights to your own property and LIFE, and the right for you not to be extorted or robbed by legally armed and legally violent mobsters. The sheeple will INSIST that you "pay your fair share" ie: since they suffer it is only FAIR that you too should suffer...
Pay up, sheeple. The gangster needs money!!
When Singaporeans talk about sale of private leasehold or HDB flats, it is really a misnomer.
When I buy something, it belongs to me perpetually eg jewellery, antiques etc.
But for a leasehold property, it is anything but yours.
But for the sake of the daft, ignorance is always bliss.
All politicians are evil except for a very very small number. They are there to introduce polices that makes the rich richer and the rest in debts. When CPF were made allowed to buy HDB, the gov already knows it will increase prices of HDB exponentially and also the property tax charged on those HDB.
GST is to help the poor.
HDB Property tax is to help the poor.
PAP is also here to help the poor.
ROFL.
CPF should only be used for retirement purpose and must be given back to the account holders when they retired and in need. One does not pay 36% indirect cpf tax and end up unable to retire but has to work as taxi driver or cleaner until they die in a toilet cubicle.
I think it means "GST is to help the poor to give to the rich" somehow, they cannot make themselves tell the whole truth.
WP is here to help the poor.
They have already show it through action in Aljunied GRC, what else you want ?
There is such thing as a free lunch, go get it !! RB says it is ok, nobody need to pay the price, govt will still function.
maybe if wp in power, they will abolish the sccc?
I m quite sure they will abolish sccc.
They will also return all the cpf as what uncle RB wanted. and they will also do many other things.
don't worry where will the money come from, RB said no need worry.
money can come from the rich people lah and stop paying pensions/medical/allowance for the youknowlah.
@ redbean:
I've ever heard of this guy before. But an interview with him just appeared on my RSS news feed. Surprise, surprise, he and his wife live in SINGAPORE. Lately he's been creating a minor sensation on the inter-tubes as a "Millionaire Teacher"--ah, you gotta love marketing hyperbole!
Have you heard of him?
Heh... I have been sharing that to many Singgies - the so-called house/flat/apartment is not your own (short of those with 999-yr or wholly-owned/freehold).
After paying a hefty and ridiculous sum and owing HDB/bank for 20 years, you are left with NOTHING. Absolutely nothing. Big fat zero!
Seriously you are screwed big time.
RB
Singaporeans should stop buying into the PAP marketing of home ownership. A house is not a home. It is just an architecture. Nothing more nothing less. Live life on your own terms. When you have finally arrived, you would be free.
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