Property taxes have climbed sharply in recent years, squeezing rental yields and prompting many landlords to rethink their approach to wealth-building. Here are some practical ways to reduce property tax in Singapore—legally and strategically.

As announced on 28 November 2025, the Government will provide a one-off Property Tax (PT) rebate of 15% for Owner-Occupied HDB flats, and 10%, capped at S$500, for Owner-Occupied private residential properties in 2026. This will help to cushion PT increases for Singaporeans, amidst a moderating residential rental market with modest increases in market rents.  

Singapore’s residential property tax regime has become an increasingly important consideration for homeowners and landlords. With property values rising and progressive tax bands tightening, many property investors are finding that a significant portion of their rental income is being eroded quickly.

Between owner-occupied and non-owner-occupied rates, the jump can be drastic: rental properties are taxed at higher progressive rates, which means every additional dollar of Annual Value (AV) can push landlords into higher tax brackets. 

This has led many to search for legitimate ways to lower their tax liability—or rethink their income strategy altogether.

The good news? There are several legal approaches to reduce property tax, improve your net yield, and optimise your portfolio for long-term passive income.

1. Ensure Your Property’s Annual Value (AV) Is Accurately Assessed

The foundation of your property tax is the Annual Value (AV), which IRAS updates based on market rental data. If your AV is overstated, you could be paying more tax than necessary.

What you can do

• Review your AV whenever IRAS sends a notice of revision—this happens annually or when market conditions shift.
• Compare your AV against similar nearby units (size, age, condition, amenities).
• File an objection if the AV seems inflated.
  You’ll need supporting rental evidence, valuation data, or market listings that demonstrate lower achievable rents.

A lower AV reduces your bill immediately since property tax is directly tied to AV. For landlord units, this may result in meaningful savings given steep progressive rates.

2. Occupy Your Property (Even Part-Time) If Possible

Owner-occupied properties are taxed at significantly lower progressive rates compared with non-owner-occupied properties. If you own multiple properties or plan to use a property for personal purposes, declaring it as owner-occupied can reduce your property tax liability.

IRAS defines owner-occupation as the property being genuinely occupied by the owner or the owner’s immediate family (spouse, children, or parents). Temporary or part-time occupancy may qualify only if the property is genuinely used as a residence in line with IRAS rules. Misrepresenting occupancy is an offence and may result in penalties.

Strategies to consider

• Move into your investment property temporarily if your current home is smaller or lower in value (provided the move is genuine).
• Nominate only one property as owner-occupied—your highest AV unit usually provides the biggest tax savings.
• If you’re renovating your primary home, declare temporary owner-occupation for another property if eligibility criteria are met.
• Ensure that all claims of temporary owner-occupation are supported by evidence of genuine residence (e.g., personal belongings, utility bills, or other proof of use).

Important note: You must genuinely occupy the property as per IRAS rules; false declarations are an offence and can incur fines or penalties.

3. Maximise Property Maintenance to Reflect True Market Rent

The condition of your property can influence the market rent it can realistically achieve, which is what IRAS considers when determining Annual Value (AV). Well-maintained units may command higher rents, while older or less-upgraded units may achieve lower rents.

This means that AV naturally reflects the property’s condition and appeal to tenants. If your unit is undergoing renovations, repairs, or is in visibly moderate condition, this can support a lower AV. For example, units with dated fittings or older infrastructure typically earn lower rent, while non-renovated properties often achieve lower rental valuations—even if well-located.

You should focus on maintaining your property appropriately for tenant comfort and safety, rather than attempting to intentionally degrade it to reduce tax. AV is based on what the property could reasonably rent for in the open market. IRAS will consider condition as it affects achievable rent, but intentional downgrading or misrepresentation is not permissible. However, if you’re planning to rent out an older unit, you may request IRAS to consider its condition in the AV assessment.

Strategies to consider

• Keep records of any renovations, repairs, or temporary limitations that may legitimately affect rental value.
• When reviewing or objecting to AV, provide accurate evidence of the property’s condition as part of market comparables.

4. Time Your Leasing Decisions Strategically

Rental markets fluctuate throughout the year, and timing your leases can matter for cash flow and occupancy risk. For example, signing a longer lease can lock in stable rental income during a soft market, while waiting to lease during a recovery can yield higher contractual rent when demand returns. However, Annual Value (AV) used for property tax is based on the market rent the property could reasonably obtain, not solely the rent stated in a particular lease. In practice this means IRAS will look at prevailing market evidence (comparable rents, property condition and location, etc.) when valuing a property.

If you believe your AV is incorrect after a significant change in market conditions or tenancy, keep clear documentation (comparables, tenant agreements, evidence of building condition or vacancy) and consider seeking specialist tax/property advice to address valuation concerns, not simply adjusting lease start dates or contract lengths.

5. Divide Ownership Across Multiple Owners (Where Appropriate)

Property tax is based on the property—not the owner—so splitting ownership doesn’t change the tax itself. However, shared ownership can change how you structure rental income, estate planning, and cost-sharing, indirectly reducing the financial stress of property tax.

This is relevant for:

• Couples planning long-term rental income
• Families pooling funds for investment properties
• Co-owning siblings or business partners

While this doesn’t reduce the tax payable, it can ease cashflow and improve financial planning.

6. Reassess Whether Physical Property Is Still the Best Income Vehicle

The most effective way to reduce property tax may be to reduce your reliance on physical property altogether.

Property tax, maintenance, furniture costs, vacancy risk, and rising mortgage rates mean net rental yields can shrink quickly.

Many Singapore investors now ask, “Why chase 2–3% net rental yield when I can earn similar or higher passive income without paying property tax?”

That’s where market-based passive-income strategies come in.

Tax-Efficient Passive Income Through REITs and Bond Portfolios

7. Generate Property-Linked Income—Without Paying Property Tax—Through REITs

Real Estate Investment Trusts (REITs) let you earn income from diversified portfolios of commercial, industrial, hospitality, and retail properties—without owning or maintaining physical assets.

Why this reduces your tax burden:

• You don’t pay property tax on the REITs you own.
• REITs distribute up to 90% of rental income in the form of dividends.
• No renovation or tenant management costs.
• You gain diversified property exposure—across hundreds of tenants.

Syfe’s REIT+ portfolio simplifies this further by tracking and optimising Singapore’s top REITs, giving you stable yield potential with low fees and no landlord headaches.

8. Build Predictable Income Through Bond-Focused Portfolios

If your goal is steady, lower-volatility income, physical property is no longer the only solution. Bond portfolios provide regular coupon payouts, diversify away from real-estate risks, and avoid property-related levies.

Syfe’s Income+ portfolios, powered by PIMCO, are designed to deliver monthly payouts with diversified global fixed-income exposure—again, without property tax or maintenance costs.

9. Pair REITs and Bond Income for a Balanced, High-Efficiency Passive Income Plan

A hybrid approach—combining property-linked yield (REITs) and stable bond income—can deliver:

• More consistent returns
• Lower costs
• Zero property tax
• High liquidity
• No tenant or regulatory issues
• Less exposure to interest rate volatility compared to property loans

This approach helps investors build passive income without locking capital into one illiquid asset or absorbing hefty tax burdens.

Reducing Property Tax Starts With Smarter Financial Strategy

Property tax in Singapore is unavoidable if you own physical property, but it is manageable. By ensuring your AV is fair, planning your occupancy properly, timing leases strategically, and understanding how IRAS evaluates your property, you can potentially lower your tax bill.

But beyond the tactical steps, many investors are now realising something bigger:

You don’t need to rely on physical property to earn dependable passive income.

With options like REITs and bond-based income portfolios, you can tap into property-linked cash flows and monthly income—without having to deal with renovation bills, vacancies, or increasing tax levies.

Build Tax-Efficient Passive Income With Syfe

Looking to grow income without dealing with property taxes? Syfe’s income-generating portfolios like Income+ and REIT+ offer a way to consistently earn income through bond funds and real estate investment trusts.

Income+

Income+ is a professionally managed, globally diversified bond portfolio designed to generate passive income. It offers two main options, Preserve and Enhance, to cater to different risk appetites, providing regular monthly payouts with no lock-in periods, minimum balance required, or withdrawal penalties.

The portfolio is powered by actively managed funds from PIMCO and comprises SGD-hedged, investment-grade funds. It provides a distribution yield (i.e. monthly payout) of 5.0%-5.5% for Preserve and 5.5%-6.0% for Enhance, and a yield-to-maturity of 6.1%-6.4%.

REIT+  

Comprising the top 20 S-REITs (SGD-denominated) and offering broad exposure across key property sectors, the REIT+ portfolio is professionally managed and mirrors the iEdge S-REITs leader index. It is optimised based on liquidity and market cap, with automatic reinvestment of dividends.

Currently, Syfe’s REIT+ (100% REITs) portfolio offers an estimated dividend yield of 5.38% p.a., well above other yield-generating instruments, such as 10-year Singapore government bonds, which has a yield of 2.01%.

Start building smarter, more efficient passive income today—without the tax burden of physical property.

Read More:

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• How to Pick Resilient REITs in Singapore’s Property Market Recovery
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