When purchasing a flat, put the foreseen future to the equation. For instance, you must consider a bigger flat if you are moving in with your parents or planning to have kids soon. Planning in advance will help ease your stress and avoid the hassle of acquiring another home.
2. THE LOANS
Be open and honest with your credit score as your chances of getting a loan is affected by it. Consider how you can budget your income in order to support your family and pay fully for your loan through the years.
3. THE NEIGHBORHOOD
Your new HDB flat comes with a different environment – study it. You do not deserve to live next to a neighbor who throws parties every night or one who is constantly bothered by loan sharks. You deserve to live in a place where you can come home safely. As much as you can, talk to your potential neighbors and follow your guts about the place.
4. THE INSPECTION
Although you are purchasing a new flat, it does not hurt to have someone inspect it. This is not only to ensure the true value of the home but also to ensure that everything is working perfectly. This helps you save money for unwanted repairs. Look no further for an inspector as HDB provides this service for a price.
5. THE PRIORITIES
As a client, you must determine what you really want in a pad. Are the available facilities and specifications in lined with your priorities and wants? If not, are you ready to compromise? It is difficult to get everything you desire in a flat but your necessities should be on the top priority.
6. THE PRICE
Good news: HDB flats had become more affordable since 2013! According to the Housing & Development Board, the proportion of a household’s monthly income used to repay the loan installment decreased from 24% in 2013 to 19% in 2015. In fact, 8 out of 10 first-time buyers of new flats in non-mature estates were able to fully repay their monthly mortgage installments using only their CPF savings over the past 3 years. In the end of the house hunting, it truly comes down to the price.
It is best to compare the prices of the flats in the area before making a decision. This price must include other factors such as facilities in the building, quality of construction, specifications of the flat, and more. You must understand that the cheapest flat may not necessarily be the most economical option.
Estate planning advice often focuses on the creation of legal documents such as wills and trusts. The choices you make about where your assets will go after you pass can affect people’s lives profoundly. This is why you must familiarize yourself about the basics of estate planning.
DEFINITION
In simpler terms, estate planning dictates how you would like to distribute your estate after your death. Your estate encompasses your properties, savings, and money. It makes sure that the people you love and the causes you care about are covered even after the inevitable event of death.
TRUSTS
As said above, estate planning primarily includes the creation of a will by appointing an executor. For individuals with higher net-worth, they may choose to create a trust in order to transfer their assets to pre-determined beneficiaries. Singapore is a prime financial hub for individuals with higher net-worth to set up their trusts. It is because the country is characterized by:
a business promoting environment,
a comprehensive legal system,
a globally competitive infrastructures,
a strategic geographic location, and
a robust set of regulations for the financial sector.
As trusts are used as a long-term tool, you must closely evaluate the pros and cons before setting one up. For instance, trusts are a viable option for vulnerable beneficiaries such as minors. However they can be costly and difficult to maintain.
TERMS
Here are the common estate planning terms that may boggle your mind at first:
Alternate Beneficiary is an individual or an organization named to receive the assets in the unlikely event that the primary beneficiaries die.
Co-Trustees are two or more people who had been named to coordinate in managing a trust’s assets.
Durable Power Of Attorney For Asset Management is a legal document that bestows a person full or limited legal authority to sign your name on your behalf in your absence. Its validity ends at death.
Gross Estate refers to the value of an estate before the debts are paid.
Will is a written document that includes the instructions for allocation of assets after one’s death.
Individuals, corporations, trustees, and partnerships that are carrying on profession, trade, or business in Singapore are chargeable with tax. Fortunately for you, the country offers one of the lowest tax rates in the world.
Whether you are entering the country’s working scene as a local citizen, a fresh graduate or a foreign worker, you must familiarize yourself with the taxation regulations. Start by reading this guide…
AUTHORITY
The Inland Revenue Authority of Singapore (IRAS), formed in 1960, is the statutory board responsible for collecting personal income taxes, corporate taxes, goods & services taxes, property taxes, betting taxes, and stamp duties. In short, it integrates all the revenue collection agencies into one place in order for the processes to be managed better.
The governing laws include Income Tax Act, Goods & Services Tax Act, Stamp Duties Act, and Property Tax Act.
TYPES
For your reference, here are some of the most common types of taxes in Singapore:
INCOME TAXES are charged based on the income of individuals and companies.
GOODS & SERVICES TAXES (GST) are the tariff paid when you spend on merchandise, services, and imported goods.
PROPERTY TAXES are charged to the owner/s based on the expected rental values of the said properties.
BETTING TAXES are paid when betting on the lottery, sweepstakes, or alike.
STAMP TAXES are imposed on legal and commercial documents.
TERMS
To avoid confusion, here are some of the most common terms related to income taxes:
NOTICE ASSESSMENT (NOA)
– NOA shows the amount of income subjected to tax, calculates the tax amount you have to pay, and displays the credit balance that needs to be refunded to you. Simply, NOA is your tax bill.
YEAR OF ASSESSMENT (YA)
– YA refers to the annum in which the income tax is charged and calculated. It is a no brainer!
BASIS PERIOD
– Basis period refers to the previous YA that is relevant to the current YA.
PERSONAL RELIEFS
– Personal reliefs are good news as they are the deductions that help you to save tax.
ASSESSABLE INCOME
– Lastly, the assessable income refers to your total income after subtracting the approved donations and allowable expenses.
Image Credits: pixabay.com (CC0 Public Domain)
For more information about what is taxable and what is not, please visit www.iras.gov.sg.
Each year, hundreds of tax deductions and credits may go unclaimed due to the lack of taxing knowledge. To prevent that, here are 5 Tax Deductibles You Need To Know based on the Inland Revenue Authority of Singapore.
FOR THE EMPLOYEE
1. EMPLOYMENT EXPENSES
A good news for all employees—employment expenses can be claimed as long as they satisfy these three conditions:
a. Expenses are sustained when carrying out official duties.
b. Expenses are not reimbursed by the employer.
c. Expenses are not private in nature.
For instance, traveling expenses on public transportation that are not reimbursed by the company may be deducted from the tax. Also, entertainment expenses that occurred while pleasing the clients may be deducted from the tax.
FOR THE EMPLOYER
2. STARTUP TAX EXEMPTION (SUTE)
A start-up company, have enough financial worries in your plate. What should you do then?
Take on the SUTE. Suited by SUTE, a start-up company that meets the required conditions can claim for full tax exemption on the first S$100, 000 of normal chargeable income for each of its first three consecutive years.
3. CORPORATE TAX INCOME REBATE (CTIR)
Since 2013, all Singapore companies are eligible to take on the CTIR. No! There is no catch. This scheme aims to help companies to cope with the rising costs in businesses. Suited by CTIR, companies will receive 30% rebate or up to S$30, 000 off the tax bill from 2013-2015.
OTHERS
4. ANGEL INVESTORS TAX DEDUCTION SCHEME
Be an angel, invest in start-up companies in Singapore to receive a huge tax benefit from the Angel Investors Tax Deduction Scheme.
Enjoy 50% tax deduction on the investment costs at the end of a two-year holding period. This is up to S$500, 000 of investments in each Year of Assessment. Investments made from March 1, 2010 until March 31, 2015 are eligible for this scheme.
5. DONATIONS
Want to double your tax deduction? Be generous and donate in all forms. The following types of donations will qualify you for a double tax deduction (twice the amount of the donation):
a. Cash Donations
b. Shares Donations
c. Computer Donations
d. Artefact Donations
e. Public Art Tax Incentive Scheme
f. Land and Building Donations
For instance, a donation to the Singapore museums that have obtained the Approved Museum Status with the National Heritage Board is tax deductible.
Image Credits: TaxCredits.net via Flickr
Equipped with these tax deduction knowledge, prepare to be impressed with your managed taxes now!
Income tax filing day are just months away and i know you hate the reminder.
Even while i’m here writing this – you would have paid for your dinner that comes with a Good and Services Tax, leaving you 17% of the cost of the meal poorer.
You may also have to pay for the property or road tax that are due.
For those that smoke and drink, thanks for the additional contribution of excise duties and tobacco tax. And for once, we are proud of you.
For the rest, i can fully understand your resentment as no one likes to fork out extra money from their own pocket for something they cannot feel or touch.
Some of you may fret because you don’t know what exactly you are paying for and what the government is going to do with the taxes collected.
Here is the breakdown for the second quarter of 2014:
(Source: Economic Survey of Singapore, 2nd quarter of 2014)
As you can see above, most of the tax revenues are spent on social development and security purposes.
Taxes are necessary for the development of an economy of a country. Without taxes, you would still be living in the kampong your parents lived in and there is no SMRT or Uber but only Rickshaw Pte Ltd.
I like to pay taxes. With them, I buy civilization. – Oliver Wendell Holmes Jr
At least in a country with the least corrupt government, you are assured that ultimately the money will come back to benefit us in other ways.
Let’s take a look at how most of the funds are spent and why you should love paying taxes:
Building the ‘Great Wall’ of Singapore
(Image credit: asiaone.com)
In tiny Singapore with limited land and resources, what we have to defend ourself is to build a strong military force to be reckoned with. Defence spending has been steady and amounts to billion of dollar each year. So the next time you grunt over your income taxes, make yourself feel better to know that the money goes into the next Leopard tanks or a Next-gen fighter jet that defends you in a place you call home.
Live as long as the Japanese
(Image credit: seniorsworldchronicle.com)
Japan has the most centenarians and that’s probably due to having one of the best healthcare system in the world. No doubt, Singapore also has one of the best quality healthcare system and Finance Minister Tharman Shanmugaratnam has said that healthcare spending will hit S$12b by 2020 in Budget 2014.
There is no such thing as free and cheap healthcare system anywhere in the world, because the public ends up paying for it, either through taxes or hefty insurance premiums.
Perhaps it’s time to substitute your Char Kway Teow and Mee Goreng with seaweed and sashimi? Stop drinking your Starbucks or Coca-Cola, drink Matcha.
Cultivate more Albert Einsteins
(Image credit: ST)
Next on the list of government expenditure is education spending. As the government spend more money building schools and training teachers, don’t you feel proud when Singaporeans are ranked the most intelligent in the world with a IQ score of 108% by British psychologist Richard Lynn and Finnish political scientist Tatu Vananen. Singapore has always top the ranks in the Trends in International Mathematics and Science Study (TIMSS) and who say we can’t produce Albert Einsteins of our own?
Singapore has spent close to $10 billion on education in 2013.
Build a Sing-kansen
(Image credit: gopixpic.com)
Late in the 19th century, Singapore’s main mode of transport to get around in by the rickshaw puller. There is no such thing as the MRT (or SBS, ERP, COE, PIE, etc). The fact that you can see modernised roads and expressways as well as MRT tracks and bus interchanges is due to the taxes you paid. Around $5 billion are spent on transport each year.
If you look at it a bit longer within the next 15 years, by 2030, the network will double and nearly 8 in 10 households will be within a 10-minute walk from an MRT station – so you just walk a short distance and you are there. – PM Lee Hsien Loong
And as Singapore gets more ambitious, besides cars and roads, we also want a Shinkansen (bullet train) of our own as you can see from the KL-Singapore High Speed Rail project which is estimated to cost RM40 billion.
Remembering Silk Road
(Image credit: worldportsource.com)
Singapore’s economy is largely dependant on trade. With no natural resources to boast about, we make use of our strategic location along key shipping routes and deepwater ports. Trade and commerce accounts for up to a quarter of our country’s GDP
Thus, it makes sense to invest the money in the area where we have advantage in. Mainly high-end manufacturing such as electronics, semi-conductors and machinery.
Assembling LEGO bricks
(Image credit: ST)
LEGO? Well, not literally. National Development forms part of the government expenditure and that’s also the reason you see more HDB flats, development of new malls and Garden by the Bay instead of kampong or shacks.
The Ministry of National Development (MND) aims to provide quality and affordable homes, good community bonding, development of green spaces and creation of identity marker through planning and management of land resources.
Act as Robin Hood
(Image credit: missedinhistory.com)
In Singapore, we use the progressive tax system where the rich get taxed more than the poor. It is viewed as a fair and equitable way since the rich spend lesser proportion of their income on necessities. If you earn higher income, you basically pay more tax. Income inequality is a social ill and leads to more crimes and social unrest.
For the lower and middle income group, there is a GST voucher given out every year since 2012 as a form of transfer payment. So for 800,000 HDB households, look forward to the GST vouchers that is coming your way this month in January 2015.
In conclusion
So everyone, a pat on your back for your contribution to Singapore throughout the years. Smile and pay your taxes due without any reproach for you have done your part in the betterment of the society. Tax is not that bad after all, isn’t it? Think positively.
