Guide · 2026
Annual Value explained: how IRAS values your property
By Winfred Quek · 8-minute read · Last reviewed May 2026
Facts verified: May 2026 · Sources linked below
Key Takeaways
- • Annual Value is IRAS's estimate of a property's gross annual rental potential, excluding furniture and maintenance fees.
- • Property tax is the rate applied to the AV. A higher AV means a higher tax bill.
- • AV is derived from market rentals of comparable properties, not from your actual rent or your purchase price.
- • AV applies whether the property is owner-occupied, rented, or vacant. The tax follows ownership.
- • IRAS reviews AVs periodically, so your AV can rise or fall as the rental market moves.
Annual Value is one of those terms that everyone with a property sees on their tax notice and almost nobody truly understands. Buyers often assume it is their rent. Some assume it is a percentage of the price they paid. Both are wrong, and the misunderstanding leads to confusion every time a property tax bill changes.
This is the plain explanation. Once you understand what the AV actually represents, your property tax stops being a mysterious number and becomes a figure you can read, anticipate, and, where genuinely warranted, challenge.
What is Annual Value?
According to IRAS, the Annual Value of a property is the estimated gross annual rent that the property could reasonably be expected to fetch if it were let, excluding the rent attributable to furniture, furnishings, and maintenance fees, and on the assumption that the landlord bears the cost of repairs.
Break that down into its working parts:
- Estimated. It is IRAS's assessment of rental potential. It is not a number you report.
- Gross annual rent. A full year's rent, before expenses.
- If it were let. The AV applies even if you live in the property yourself and never rent it. It measures potential, not your actual choice.
- Excluding furniture, furnishings, and maintenance fees. The AV is the value of the bare property. The portion of a market rent that reflects a furnished unit or covers condo maintenance is stripped out.
So the AV is best understood as: "what the empty shell of this property would rent for over a year, in IRAS's estimation." That figure, and only that figure, drives your property tax.
Why is the Annual Value not my actual rent?
This is the single most common point of confusion, so it is worth being precise. Even for a property that is currently rented out, the AV will usually not equal the rent on your lease, for several reasons.
| Your actual rent includes / reflects | The Annual Value does not |
|---|---|
| Furniture and furnishings | Stripped out, AV is the bare property |
| Maintenance / MCST fees bundled in | Excluded from AV |
| The specific deal you struck with one tenant | AV reflects the general market, not one lease |
| The rental market on the day you signed your lease | AV reflects IRAS's periodic assessment, may be a different point in the cycle |
The AV and your lease rent are measuring related but different things. They will rarely be identical.
And of course, if you live in the property yourself, you have no actual rent at all, yet the property still has an Annual Value, because the AV is about rental potential, not whether you choose to realise it.
How does IRAS derive the Annual Value?
According to IRAS, Annual Values are determined by reference to the rentals of comparable properties. IRAS analyses the rental market, looking at leases for properties similar in type, size, location, and condition, and derives the AV for a given property from that comparable evidence.
The practical consequence: your AV moves with the rental market, not with your purchase price. If rents in your development rise, IRAS may revise AVs upward on its periodic review; if rents soften, AVs can be revised down. The AV is anchored to rental reality, refreshed over time.
How does Annual Value translate into property tax?
Once the AV is set, property tax is simply the relevant rate applied to it. According to IRAS, owner-occupied residential property is taxed on a progressive scale, 0%, 4%, 6%, 10%, 14%, 20%, 26%, and 32% across rising AV bands, with the first $12,000 of AV taxed at 0%. Property that is not owner-occupied (rented out or vacant) is taxed on the higher non-owner-occupied scale of 12%, 20%, 28%, and 36%.
So the AV does two things at once. It determines which tax bracket your property falls into, and it is the base the rate is applied to. A modest AV on a home you live in can attract very little tax, because of the 0% first band. A high AV, or the same property rented out and taxed on the non-owner-occupied scale, produces a materially larger bill. Understanding your AV is the first step to understanding, and forecasting, your tax.
Winfred's Take
For an investor, the AV is not just a tax input, it is a quiet signal. Because IRAS derives the AV from comparable market rents, the AV is, in effect, a conservative read of what your property's rental market is doing. When I am assessing a property's holding economics, I treat the AV as one more data point on rental strength, alongside actual transacted rents. The mistake to avoid is treating the AV as a fixed cost you can ignore. It moves with the rental market, and on the non-owner-occupied scale, a rising AV in a strong rental year quietly raises your annual tax. Fold the AV-driven property tax into your holding-cost model from day one, and revisit it whenever a Valuation Notice arrives.
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Winfred Quek · CEA R073319H · Crestbrick
Frequently asked questions
Is Annual Value the same as my rental income?
No. The Annual Value is IRAS's estimate of the bare property's annual rental potential, excluding furniture, furnishings, and maintenance fees. Your actual rent typically includes those elements and reflects one specific lease, so the two figures usually differ.
How is Annual Value calculated for a property I live in myself?
The AV is calculated the same way regardless of occupation, by reference to rentals of comparable properties. It measures rental potential, so it applies even though you do not actually rent the property out.
Does my Annual Value depend on what I paid for the property?
No. The AV is derived from market rentals of comparable properties, not from your purchase price. Two identical units bought at different prices would have the same Annual Value.
Why did my Annual Value change?
IRAS reviews Annual Values periodically to keep them aligned with the rental market. If rents for comparable properties have moved, IRAS may revise the AV and will issue a Valuation Notice.
Can I find out my property's Annual Value?
Yes. Your Annual Value is shown on your property tax documents, and property owners can check it through the IRAS digital services. The AV is also stated on the Valuation Notice when it is revised.
Sources & References
Winfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence L31010886H), advising Singapore upgraders, investors, and family offices. CEA R073319H. The information on this page is general and does not constitute financial, investment, tax, or legal advice.