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We thank Mr Tan Ah Heng for his feedback ( , Sept 10). Property tax (PT) is our primary means of taxing wealth in Singapore. It is a tax on property ownership and is imposed regardless of whether the property is rented out, owner-occupied or left vacant. PT is computed based on the annual values (AVs) of residential properties assessed using rental transactions of comparable properties. If PT is not levied based on AV, the alternative is to levy PT based on a property’s capital value using transacted prices of comparable properties instead. We have adopted the use of AV as a proxy for property value, as there are more rental transactions than sales transactions, ensuring that there are more data and comparable properties available to assess AV. Using rental transactions lets us derive a more stable AV across properties over time, unlike using sale prices that could be significantly impacted by sentiments and the property market cycle. We recognise that market rents have increased significantly in the past few years, resulting in higher AVs and PT. That is why the Government has provided PT rebates in 2023 and 2024 to cushion the impact of the PT increases during this period. Due to market trends, more private property owners are impacted by the PT rate changes announced in Budget 2022, which were intended to target the higher-end segment of the owner-occupied properties and all investment properties. We announced in Budget 2024 that AV bands of the owner-occupier PT rates will be raised from January 2025. This means those residing in higher-value properties will continue to pay their fair share of taxes. For example, a property with an AV of more than $40,000 is likely to be a condominium unit or a landed property worth several million dollars. Based on URA’s property price index over the last four years, the average private property has increased in capital value by more than 30 per cent. This asset appreciation is an increase in wealth, even if the property is owner-occupied, and owners can unlock a sizeable amount of wealth when the property is sold.   We will continue to monitor the property market and review our PT regime to ensure that our overall system of taxes and benefits remains fair and progressive. Director, Communications and Engagement Ministry of Finance