Precisely.
The property tax on a vacant land is much more expensive than that of the house.
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Property Tax Assessment
Property Tax is a tax on property which includes vacant land and development sites.
How is Property tax calculated?
For vacant land and development sites, property tax is calculated based on a percentage
(Tax rate) of the
Annual Value (AV) of your land. The AV is assessed at 5% of the estimated freehold land value. The current tax rate is 10%.
http://www.iras.gov.sg/irasHome/page04.aspx?id=2492
Example : AV of land is $1,000,000
Property Tax payable is:$1,000,000 X 10% = $100,000
Tax payable in 2011:= $100,000
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Buildings
The AV is the estimated annual rent of your property if it were to be rented out, excluding the furniture, furnishings and maintenance fees. It is determined after analysing the rents of similar or comparable properties. The basis of determining the AV is the same whether the property is rented out, owner-occupied or left vacant. If your property is rented out, the AV could be higher or lower than your actual rents as the AV reflects the market rent at the time of review, while your actual rents were committed earlier.
The current tax rate is 10%.
Property tax is computed as follows:
Property tax payable yearly =
Annual Value X
Tax Rate
Eg if I can rent out my terrace house at $5k per month,
my annual value will be 5000 x 12 = $60 000 per year.
Property Tax payable = $60 000 X 10%
= $6000 yearly
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In conclusion :
Property tax per year :
1st case (vacant land) - $100 000
2nd case (completed house) - $6000
So A&A - not considered vacant land
But demolition and tearing the whole house down = vacant land.