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Singapore Budget 2018: Here Are 6 Important Changes That May Impact Our Lives

# 1 GST rates are set to increase to 9%

 

Finance Minister Mr Heng Swee Keat delivered the Singapore Budget 2018 earlier today at 3:30pm. For those of you who missed it, here are six major announcements that you probably want to know.

# 1 GST Increase To 9% (but not immediately)

It’s official. GST will increase to 9%, up from the current rate of 7%.

However, this increase will not be immediate. Rather, it will take place from between 2021 to 2025, depending on the economy and some other factors.

Since GST is levied on all products and services in Singapore, this means we should be prepared for a slight increase in the cost of living once the GST hike kicks in.

Source: Singapore Budget 2018

# 2 Edusave Top-Ups To Increase

Family with children can look forward to higher Edusave top-ups for their kids. The government announced that it will be increasing annual contributions from $200 to $230 for primary school students, and from $240 to $290 for secondary school students. This will take effect from 2019.

Edusave Top-Up (Per Annum)

  Previous Contribution New Contribution
Primary School $200 $230
Secondary School $240 $290

 

# 3 Increase In Proximity Housing Grant

The Proximity Housing Grant (PHG) is a grant introduced to encourage adult children to live with/or near their elderly parents.

The PHG has been increase from $20,000 to $30,000. This will apply for those who are buying a resale flat to live with their elderly parents/adult children.

For those who are buying a resale flat to live near their parents/adult children, the grant will remain at $20,000. However, the criterion with be expanded from within a 2km radius, to within a 4km radius, thus allowing more Singaporeans to qualify.

# 4 10% Increase In Tobacco Tax

There will be a flat 10% increase in tobacco tax across all tobacco-related products. This means cigarettes, cigars and any other tobacco related products are going to cost more moving forward.

You can check out the current tax rates for tobacco and other dutiable goods in Singapore here.

# 5 One-Off SG Bonus (Hong Bao)

All Singaporeans aged 21 and above will receive a one-off SG Bonus of up to $300, thanks to the surplus from Budget 2017.

This bonus will be based on assessable income. Those with an assessable income of $28,000 and below will receive $300; those with an assessable income of between $28,001 to $100,000 will receive $200, with the remaining higher income group of above $100,000 receiving $100.

Source: Singapore Budget 2018

This one-off SG Bonus is on top of the usual GST and U-Save vouchers.

# 6 Buyer’s Stamp Duty To Increase

For those who are unaware, there is a Buyer’s Stamp Duty (BSD) that applies each time we buy a property in Singapore, be it public or private. The BSD tax rates are progressive, meaning, you pay a higher tax rate as your property value becomes higher. You pay this BSD regardless of whether this is your first, second or subsequent property.

BSD will increase from 3% to 4% to all properties with a value of more than $1 million. Here’s how the tax will be calculated.

Source: IRAS

For example, in the past, a $2 million property will incur a BSD of $54,600. Under the revised rates, the same $2 million transaction will incur a BSD of $64,600, or about $10,000 more.

Read Also: Singapore Budget 2018 – Full Recap

Visit our special Singapore Budget 2018 page to read up on all the budget-related articles that have been written.

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