Singapore Budget 2024: Announcements for individuals

For individuals

• Personal Income Tax (PIT) rebate

  • One-off 50% Personal Income Tax (PIT) Rebate, capped at SGD 200 for YA 2024. This benefits all tax resident individuals with chargeable income above SGD 20,000.
  • An individual with chargeable income of at least SGD 37,715 will receive the full SGD 200 rebate.
  • This one-off temporary measure to all Singapore tax resident individuals to provide a modest level of financial relief.
  • This is identical to the last one-off PIT Rebate in Year of Assessment (YA) 2019. 

  Insights

  • Not significant enough to make a meaningful difference to taxpayers given the current higher cost of living now, especially when it is the same level as given in YA 2019 (pre-covid). 
  • This is only a one-off rebate while cost of living increases look to be a permanent feature.
  • Individuals who have already paid their tax under tax clearance will now receive a cheque refund of up to SGD 200 which can be an administrative burden, especially where tax was borne by the employer, or the individual is no longer in Singapore and has no valid Singapore bank account.
• Increase in annual income threshold for dependent-related reliefs

  • Increase in annual income threshold for dependent-related reliefs from SGD 4,000 to SGD 8,000 with effect from Year of Assessment 2025
  • From YA2025, the annual income limit that dependents or caregivers can earn before the personal relief be cut off will be increased to SGD 8,000 for the following dependent-related reliefs:
    • Spouse relief
    • Parent relief
    • Qualifying child relief
    • Working mother’s child relief
    • CPF cash top-up relief for top-up to the CPF account of spouse or siblings
    • Grandparent caregiver relief
  • This provides a modest reduction in the tax burden in view of the increasing cost of living.

  Insights

  • This allows more dependents to fall into the new threshold and provide more financial relief to the individual supporting their dependents.
  • Dependents who currently qualify for the relief can also increase their income to help with the cost of living without impacting the family’s overall tax position.
  • The amount of each dependent-related relief should be revised in view of the escalating cost of living. 
• Further increase of Central Provident Fund (CPF) contribution rates for individuals

  An increase of 1.5% (0.5% for employer and 1% for employee) of contributions to the CPF will be implemented from 2025 for individuals aged 55 to 65.

  Insights

  • The increase in employer CPF costs will increase hiring costs to employers and these costs may be passed on to consumers through higher prices or discourage the hiring of seniors.
  • For the individual however, the increased CPF contribution rates should enhance retirement affordability and defray increased healthcare costs. 
• Removal of tax relief for CPF top up qualifying for Matched Retirement Savings Scheme (MRSS)

  A cash top up made after 1 January 2025 to the Retirement Account of a MRSS eligible CPF member that attracts the MRSS matching grant will no longer qualify for the CPF Cash top up relief from YA 2026.

  Insights

  • The removal of tax relief reduces the attractiveness of making CPF cash top up for MRSS eligible members.
  • However, the matched contribution is already a significant incentive and this benefit outweighs the potential lost tax saving from losing tax relief.
  • Increasing this matched amount further enhances the ability for eligible CPF members can benefit from enhanced top-ups into their retirement funds. 
• Lapse of course fee relief from YA 2026

  From YA 2026, taxpayers can no longer claim a relief (of up to SGD 5,500), for courses, seminars or conferences that:

  • Are relevant to the taxpayer’s present or future trade, business, profession, vocation or employment, or
  • Lead to an approved academic professional or vocational qualification.

  Insights

  • There is a clear focus by the Government on developing human capital. With this in mind, it is a bit disappointing that Course Fee Relief has been removed.  
  • This loss is partly offset by the direct subsidies and SkillsFuture credit provided. However, this only benefits Singaporeans, and those courses that can be paid by SkillsFuture and other specified courses. 
  • Therefore, non-Singaporeans working in Singapore and Singaporeans looking at non-eligible course providers would no longer enjoy any relief from taking up these courses. 
• Upward revision of Annual Value (AV) bands for owner-occupied residential property tax

  • Most property owners living in their own property will see a reduction in their property tax from 1 January 2025.
  • The 4% property tax rate will now start for residential properties with an AV of more than SGD 12,000 (up from SGD 8,000).
  • The 32% property tax rate will now start for residential properties with an AV of more than SGD 140,000 (up from SGD 100,000).

  Insights

  • In Budget 2022, the increase in property tax for residential property was meant to be a wealth tax. However, the significant increase in market AVs caught more properties than was initially intended. Thus, the AV bands have been raised from 1 January 2025.
  • Given that this was an unexpected consequence of the Budget 2022 property tax increase, it would have been nice to see a rebate of property tax already paid or about to be paid to help alleviate this unexpected increase in cost to property owners. 
• ABSD concession will be extended to single Singapore Citizen (SC) seniors aged 55 and above

  • Currently, the ABSD concession is only applicable to SC married couples buying a replacement residential property where ABSD paid can be refunded. To qualify, the first residential property must be sold within 6 months after the date of purchase of a completed residential property, or the issue date of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) of an uncompleted residential property, whichever is earlier.
  • With immediate effect, these ABSD concessions will be extended to single SC seniors who wish to “right-size” their residential property.

  Insights

  • This is a welcome approach to help single SC seniors reduce the temporary ABSD cost of moving home.
  • The government could have gone further with this measure. The requirement to pay ABSD up front can already be a big challenge given that the home-owner would need to be able to afford the 20% ABSD on the second property which could be a significant amount.
  • Instead, a 6-month deferral of ABSD could have been a better idea (extended also to SC married couples) looking to move home to help to avoid ‘lending’ the IRAS 20% ABSD for the 6-month period.
  • This concession could have been extended to everyone replacing their primary residence in line with what some other countries allow. 
• Income tax concession on royalty income earned by authors, composers, choreographers

  • Phasing out of income tax concession on royalty income from YA 2027
  • Tax is currently charged on the lower of:
    1. the actual net amount of royalties, or
    2. 10% of the gross amount.
  • Transitional measures for YA 2027 and YA 2028 will allow taxpayers to continue to claim the tax concession based on lower of:
    1. net amount of royalties, or
    2. 40% (YA 2027) or 50% (YA 2028) of the amount.
  • From YA 2029, the income tax concession will be be withdrawn and royalty income will be taxed solely on the actual net amount only. 

  Insights

  • This may impact potential revenue gains with broader economic considerations such as innovation, investment in certain intellectual property and competitiveness as these individuals cannot leverage on the tax concession anymore.
  • It will also add to the administrative burden of record maintenance and determining actual net income.