有人被征收房产获利税么？

Tax rule on property traders lacks clarity

I HAVE been investing my savings in residential properties, earning rental income and making capital gains, thanks to a buoyant property market.

Last year, I was shocked to find that the Inland Revenue Authority of Singapore (Iras) had taxed my capital gains from my property investments as far back as 2006. I was under the impression that capital gains from real estate investments in Singapore are tax-exempt.

The Iras' assessment was based on a relatively unknown rule, which states that "when a person is deemed to be trading in properties, the gains from the sale of property in Singapore is considered taxable income".

However, the criteria for determining who is a property trader is not spelt out.

I called a tax manager and was told Iras had absolute discretion in deciding who is a trader on a case-by-case basis, without a definite set of criteria.

I appealed against the assessment as I do not consider myself a trader, having held some properties for a sufficiently long time and selling only in unique circumstances.

But my appeal was rejected and the reasons for doing so were not disclosed.

There is a lack of transparency on the implementation of this obscure rule.

I understand that the Government is trying to rein in property prices by targeting speculators. However, I hope the Iras can make clear the criteria for what is deemed property trading and explain why it rejected my appeal.

Yeo Chee Kean
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Property sales: How Iras gauges taxability of gains

WE THANK Mr Yeo Chee Kean for his feedback ("Tax rule on property traders lacks clarity"; Tuesday).

We would like to explain how the Inland Revenue Authority of Singapore (Iras) determines the taxability of gains from the disposal of properties, although we had earlier informed Mr Yeo of the basis of our assessments.

Singapore does not have a capital gains tax.

However, gains from the disposal of property are considered taxable income in certain circumstances.

The Iras will study the specific facts of such cases and use the widely accepted "Badges of Trade" yardstick to determine whether the gains are income in nature.

This yardstick includes the following factors that will be considered in totality:

Intention of purchasing the property;
Length of property holding period;
Frequency and volume of similar transactions;
Improvements made to the property to better attract buyers;
Financing arrangements of the property
It is only right for taxpayers to pay their fair share of taxes should the facts and circumstances show that the gains made by a taxpayer from selling his property are trading gains or revenue in nature.

The Iras reviews property-related transactions (especially those with short holding periods) as well as rental income information to ensure that such income has been properly declared and taxed accordingly.

We remind taxpayers to declare all income correctly when filing their income tax returns.

Walter Lim

Director (Corporate Communications)

Inland Revenue Authority of Singapore