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Singapore Budget 2017: Early Analysis On The 7 Things That Matters To You

Which of these announcements will impact you the most?

 

As with most budgets, there were many initiatives and schemes announced yesterday. While the announcements were all Singapore-related, not all of them would matter to us directly. Here are seven initiatives from Budget 2017 that all Singaporeans need to know about.

# 1 Increase In Water Price

The increase in water prices would be by about 30% over two phrases.

According to Minister Heng Swee Keat, 75% of households in Singapore should see an increase in overall cost of no more than $18 per month. Assuming your household is right at the 75 percentile, you would find yourself paying about $216 more for water each year. This may be partially offset by the permanent increase in GST voucher – U-Save (more on this later),

This is the first time water tariff will be increasing since 2000. Let’s hope it takes another 17 years before price increases again.

# 2 Increase In CPF Family Grant For Resale Flats

With immediate effect, first-time couples will enjoy a CPF Family Grant of $50,000 if they buy a 4-room or smaller resale flat.

This is in addition to any other eligible grants that they may also qualify such as the Additional CPF Housing Grant (up to $40,000) and the Proximity Housing Grant ($20,000). In total, couples may be able to enjoy up to $110,000 in grant when buying a resale flat.

For example, if you and your spouse earn a combined monthly income of $4,000 and buy a 4-room resale flat near where your parents are staying, here are the grants you will qualify for.

Grant Type Grant Amount
Additional CPF Housing Grant (AHG) $10,000
CPF Family Grant $50,000
Proximity Housing Grant (PHG) $20,000
Total Grant $80,000

 

If you are buying a resale flat that is 5-room or larger, your grant amount will be $40,000, up from $30,000.

When combined with the Proximity Housing Grant, this would surely encourage more first-timer homeowners to seriously consider buying smaller resale flats near where their parents are staying to maximise the grants available.

Read Also: Complete Guide To HDB Housing Grants In Singapore

# 3 Usage Tax For Diesel Oil

Previously diesel oil was taxed based on a lump sum usage.

Moving forward, this will be changing to a per usage tax. Tax rate will be $0.10 per litre. The lump sum tax will be reduced.

This move affects most commercial vehicles, which uses diesel as fuel and which would definitely be seeing an increase in overall fuel cost.

# 4 Carbon Emissions-Based Vehicle Scheme (CEVS) To Be Changed

CEVS provides rebate for cars in Singapore that are deemed environmentally friendly. Vehicles can earn a rebate of up to $30,000 if their carbon emission falls below a certain level.

Moving forward, this would change. A new scheme called the Vehicular Emissions Scheme will be introduced. This new scheme will take into consideration four more pollutants.

Whether or not overall price of cars will increase remains to be seen. For now, Singaporeans need to take note that the existing CEVS will be extended till 31 December 2017.

# 5 Permanent Increase In U-Save Vouchers

Those of us who are in-charge of our household utility bills would know that the Government provides an annual GST Voucher – U-Save that helps offset some of your utility bill.

It was announced that there would be a permanent increase in the U-Save vouchers. The increase will be $80 for a total of $300 for 4-room flat, with more being given for smaller flats and a lower amount given for bigger units.

# 6 Motorcycle Tax

Motorcycle owners will need to be prepared for higher taxes if they purchase more expensive motorcycles. The current Additional Registration Fee (ARF) will be increased for motorcycles with an Open Market Value (OMV) of $5,000 or more.

OMV Current ARF Revised ARF
Up to $5,000 15% of OMV 15% of OMV
Next $5,000 15% of OMV 50% of OMV
Above $10,000 15% of OMVA 100% of OMV

 

# 7 One-Off GST Vouchers

In addition to the regular GST Voucher – Cash, there will be a one-off cash voucher of up to $200.

The eligibility for this one-off GST cash voucher is similar to the regular GST Cash Voucher. That means if you receive the GST cash voucher last year, chances are you will be receiving slightly more this year.

Read Also: 5 Initiatives From Budget 2015 & 2016 That Are Still Impacting Our Lives Today

Did any of the announcements for Budget 2017 caught you by surprise? Discuss your thoughts with us on Facebook.

 

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