How Budget 2018 will affect you
What does this year's Budget have in store for you? We break down the tax increases and help that Singaporeans will get
The top marginal buyer's stamp duty will increase from 3 per cent to 4 per cent.
The new top marginal rate will apply to the portion of residential property value that is in excess of $1 million.
The change will apply to all residential properties acquired from today.
Property experts likened the hike to a type of "wealth tax".
Professor Yu Shi-Ming, head of the Department of Real Estate at the NUS School of Design and Environment, said: "Buying property worth over $1 million is considered wealthy."
Mr Ismail Gafoor, chief executive officer at real estate agency PropNex, agreed.
He said "property purchases are generally big-ticket items", and those who can afford property valued more than a million can afford the increase.
He said: "The tax value will have negligible impact; those who can afford the property are unlikely to be too affected."
Prof Yu added that the measure could lead to some dampening of buying interest.
PROXIMITY HOUSING GRANT
Recognising that singles are often a "key source of caregiving support within their families", Finance Minister Heng Swee Keat yesterday announced that this group will now receive a Proximity Housing Grant (PHG) of $10,000 if they buy a resale flat near their parents.
The definition of "near" has been revised to "within 4km".
Singles who buy a resale flat to live with their parents will also receive an enhanced PHG of $15,000.
Families buying a resale flat to live with their parents or children will now receive $30,000.
Along with the enhancements to the Central Provident Fund housing grants released previously, a first-time home owner can receive up to $120,000 in housing grants when buying a resale flat to live with parents - a 50 per cent increase compared to three years ago.
Rebates for Service and Conservancy Charges (S&CC) will be extended for another year, announced Mr Heng yesterday.
This means that eligible public households will continue to receive between 11/2 and 31/2 months of rebates of their S&CC.
Last year, the S&CC rebates were raised by half a month.
Mr Heng said this extension will cost the Government $126 million and benefit about 900,000 households.
More students will be able to access Edusave-based assistance and bursaries as well as see an increase in the value of both bursaries and Edusave contributions from the Government.
The annual Edusave contributions from the Government will be raised to $230 from $200 for primary school pupils, and $290 from $240 for secondary school students.
The income eligibility criteria of the Edusave Merit Bursary will also be raised – from a gross monthly household income of $6,000 and a monthly income per capita of $1,500 to $6,900 and $1,725 respectively.
Revisions to the income caps for other bursaries such as the Ministry of Education Financial Assistance Scheme (FAS) and the Independent School Bursary will be announced later.
For the FAS, there will be an increase in the quantum for pre-university students – from $750 to $900.
There will also be more meals for secondary school students under the School Meals Programme.
FOREIGN DOMESTIC WORKER LEVY
Those looking to hire foreign domestic workers (FDW) can expect some adjustments to the levy framework from April next year.
Employers who do not qualify for a levy concession will see the monthly levy, currently $265, raised to $300 for the first FDW and $450 for the second FDW.
The concessionary levy, which is $60 a month, is applicable to households who have children under 16, elderly people or people with disabilities.
Today, about 80 per cent of Singaporean FDW employers pay this concessionary levy.
The criteria will see one change – the qualifying age for a concession under the aged person scheme will be raised from 65 to 67.
All households with those aged 65 and 66, who are currently enjoying or have enjoyed the levy concession under this scheme before April 1 next year, will continue to pay the monthly levy rate of $60.
These measures, said Mr Heng, are to “ensure that FDW demand is commensurate with need and avoid an over-dependency on FDWs”.
The number of FDWs in Singapore is 240,000 as of last year, an increase of 40 per cent over the past decade.
A carbon tax, announced last year, will go into effect from next year, as one of several initiatives to manage Singapore’s greenhouse gas emissions.
It will apply to “major emitters”, facilities that produce 25,000 tonnes or more of such emissions in a year.
Until 2023, the tax will be set at $5 a tonne of carbon dioxideequivalent greenhouse gas emissions. The Government intends to raise this rate to between $10 and $15 by 2030.
Power generation companies might pass on its marginal cost of producing electricity, including the cost of fuel and carbon tax, to households.
However, the impact of the carbon tax on total electricity and gas prices on average will be small, ranging from around 30 cents a month for a one-room Housing Board flat to $1.10 a month for an executive flat.
To help households adjust to the impact of the carbon tax, the Government will provide additional GST Voucher – Utilities-Save (U-Save) rebates of $20 a year from next year to 2021 to eligible households.
Households whose members own more than one property are not eligible.
The increased U-Save will cover the expected average increase in electricity and gas expenses arising from the carbon tax.
All Singaporeans aged 21 and above this year can expect a one-off hand-out from the Government some time this year ranging from $100 to $300.
Mr Heng said this “hongbao” is due to this year’s exceptional budget surplus.
Those earning an assessable income of $28,000 and below for Year of Assessment 2017 will get an SG Bonus of $300, while those earning from $28,001 to $100,000 will get $200.
Singaporeans whose assessable income exceeds $100,000, and those who own more than one property will get $100.
SG Bonus will cost the Government $700 million.
The implementation of the GST increase will be done in a “progressive manner”, assured Mr Heng.
The permanent GST Voucher (GSTV) will be topped up to provide more help to lower-income households and seniors.
A total of $2 billion will be added to the GSTV fund this year.
Currently, about $800 million is given out annually from the fund.
The Government will also be implementing an offset package for a period to help Singaporeans adjust to the increase, with lower and middle-income households receiving more support.
It will continue to absorb GST on publicly-subsidised education and healthcare.
To encourage Singaporeans to give to the community, the Government will extend the 250 per cent tax deduction for donations made to Institutions of a Public Character for another three years.
This covers donations made on or before Dec 31, 2021.