Should someone who owns several homes pay more tax for holding them? And should wealth passed from parents to children be taxed, even if the family has already paid taxes when they bought it?
These questions were raised in Parliament on 6 October 2026, as multiple MPs discussed the possibility of higher property taxes on higher-value investment properties and an inheritance tax to address the growing wealth divide.
For many of us, buying our first home means years of saving, followed by decades of mortgage repayments. Understandably, competing for a home against someone buying their fifth or tenth property can feel unfair. While property allows owners to build wealth and earn rental income, homes are also somewhere people need to live.
An individual owning multiple homes prevents families from owning their own, or at the very least reduces the supply of existing homes.
Singapore Already Taxes Property Ownership
Currently, owning multiple properties in Singapore already comes with a substantial tax bill.
For a start, Singapore Citizens pay Additional Buyer’s Stamp Duty (ABSD) of 20% on a second residential property and 30% on the third and subsequent properties. For example, buying a second home for $2 million would mean paying $400,000 in ABSD, on top of the usual Buyer’s Stamp Duty (BSD). This makes accumulating multiple homes today much more expensive than before ABSD was introduced.
After buying the property, owners also pay annual property tax. Residential property tax is progressive, based on each property’s Annual Value, with much higher rates applicable for non-owner-occupied homes.
Lastly, owners who rent out their properties also pay income tax on their net taxable rental income. Landlords with multiple rental properties may also be pushed into higher income tax brackets, especially if they also have other forms of employment income.
Why Was Estate Duty Abolished?
Singapore also previously taxed wealth left behind when someone died. Known as estate duty, this applied to the deceased’s estate, including assets such as property, cash and shares, subject to exemptions. Singapore abolished it for deaths on or after 15 February 2008.
As we covered in our previous article on estate duty, one concern was who actually bore the tax. MOF explained that estate tax disproportionately affected middle- and upper-middle-income groups, while wealthier people generally had more ways to plan around it. That remains relevant today: a tax intended to reduce inherited advantage needs to reach the wealthy families it is meant to tax.
What Could Additional Taxes Achieve?
The strongest argument for an inheritance tax is that wealth can give people very different (and unfair?) starting points in life. Someone who inherits multiple fully paid-up properties or a substantial investment portfolio has more financial options than someone who needs to build everything from their salary.
Over generations, this advantage can grow as inherited assets generate income and appreciate.
An inheritance tax, if introduced, could allow part of this wealth to fund public needs, such as education, healthcare, and support for lower-income households. This would not fully remove the advantages of inheriting wealth. Still, it could help channel (some) funds from the wealthy to lower-income groups to provide more possibilities to reduce wealth inequality.
What Are Practical Considerations?
While taxing inherited wealth may sound straightforward and fair (assuming you agree with it), practical considerations also can’t be ignored.
For example, inheriting a valuable asset does not necessarily mean having the cash to pay the tax. A family could inherit a home that has appreciated substantially over decades, without receiving much cash alongside it. To pay this inheritance tax, they might have to borrow or sell the property to settle the bill, even if a surviving family member still lives there.
Another challenge is ensuring the wealthiest households actually pay. Families with access to professional advisers may have more scope to transfer assets before death or restructure ownership, depending on how the rules are written. The result could be that upper-middle-class families end up bearing a larger share of the tax burden, rather than the super-rich.
This repeats the same concern behind Singapore’s initial decision to abolish estate duty in 2008.
Are We Addressing Housing Affordability Or Wealth Inequality?
Before deciding whether additional taxes would make Singapore fairer, we also need to clarify the goal. Housing affordability and wealth inequality are related, but they are not the same.
If the concern is wealth inequality, property ownership alone is an incomplete measure. Someone owning several homes may be less wealthy than someone holding shares or businesses, yet face more tax under a policy that targets only multiple property ownership.
If the concern is housing affordability, homes warrant different treatment because they are both investments and places people need to live in. However, discouraging multiple ownership would not guarantee cheaper homes, as supply and demand still matter. The discussion should also include HDB affordability, since public housing is where most Singaporeans live.
Read Also: How Estate Tax In Singapore in Used To Look Like Before It Was Scraped In 2008
