Budget 2013: New Tiered Tax Rates for Cars

[yc3333]

More expensive cars will have to pay higher Additional Registration Fees (ARF) with a new tiered tax rate being introduced.

Currently, the main vehicle tax or ARF is calculated as a flat rate of 100 per cent of a car's Open Market Value (OMV).

The new tiered structure means that a car with an OMV of $20,000 will

incur the current tax rate of 100 per cent, but the next $30,000 of the

car's OMV will be taxed at 140 per cent. The remaining OMV above

$50,000 will be taxed at 180 per cent.

Tiered Additional Registration Fee (ARF) for passenger cars and taxis

Source: Ministry of Finance

Deputy Prime Minister Tharman Shanmugaratnam announced this during

his Budget speech on Monday and said this will contribute in about $150

million in additional revenue annually.

He also gave the example of an economy car like a Mazda 3, compared

to a mid-range car like an Audi A5 and a luxury car like the BMW 735.

The Mazda with an OMV of $18,000 will see no change in the ARF rate.

The Audi A5 with an OMV of $45,000 will incur an additional 22 per cent

of ARF or $10,000 more, while a luxury model like the BMW will see a 42

per cent increase in ARF payable.

The new ruling will be introduced from the first Certificate of Entitlement (COE) bidding exercise in March.

Source: http://www.straitstimes.com/breaking-news/singapore/story/budget-2013-new-tiered-tax-rates-cars-rebates-commercial-vehicles-2013

[Tigershark]

looks like my current ride have to use till end of COE liao.

[blackmercs]

Meaning keep yr car for ten years then mods and groom it till swee swee.

[yc3333]

If i understand correctly...

Lets take a C180 1.6L as case study.

 

OMV: About $30,000

CEVS rebate: $5k

First 20k, same. Remaining 5k extra 40% ARF payable, which amounts to $2k

 

Is my calculation correct? $2k extra quite negligible, unless you are buy cars with sth like $100k OMV

[Tigershark]

Meaning keep yr car for ten years then mods and groom it till swee swee.

 

or buy a kimchi car and mod until gao gao afterall, they starting to introduce turbo cars liao

[Tigershark]

If i understand correctly...

Lets take a C180 1.6L as case study.

 

OMV: About $30,000

CEVS rebate: $5k

First 20k, same. Remaining 5k extra 40% ARF payable, which amounts to $2k

 

Is my calculation correct? $2k extra quite negligible, unless you are buy cars with sth like $100k OMV

 

I think it will work like this...

 

First $20,000 tio 100% tax = $20,000 + $20,000

Next $10,000 tio 140% tax = $10,000 + $14,000

Then can apply CEV rebate of $5,000

[yc3333]

I think it will work like this...

 

First $20,000 tio 100% tax = $20,000 + $20,000

Next $10,000 tio 140% tax = $10,000 + $14,000

Then can apply CEV rebate of $5,000

 

Orh is it? Im not too sure whether its deducted before or after.

If based on your calculations, then nett effect is almost LPPL ($1k)

[keith]

Silypore is really greedy

[Tanzy]

Wah!

My car $90k OMV.

Increase in Tax means:

20k + 42k + 72k = $134k

Price of new car instantly went up $44k!

Haven't include CEV and increased COE.

[Tigershark]

Let me be evil abit using the same example...

 

Car cost, up to LTA's pov...

 

Registration Fee: $140

OMV: $30,000

ARF: $34,000 (assume calculations above)

Excise Duty: $6,000 (20% of OMV)

COE: $75,000 (just arbitrary, based on prevailing)

less CEV: -$5,000

 

Total above: $140,140

*hope I didn't miss anything*

 

So... the rest would be seller's cost and profit... 

[Arshavin]

Any one read the news of MAS new requirement on the car loans

[thaiedwin]

If my OMV is $89,825.00 idk how to calculate liao

[Paladin]

Wah piang, I think arshavin is right. The mas car loan restriction is more scary than the new tax structure. Think can forget about changing car liao.

[Ricebandit]

The Monetary Authority of Singapore (MAS) will place a cap on motor vehicle loans from Tuesday Feb 26.

For a motor vehicle with open market value that does not exceed $20,000, the maximum loan-to-value is 60 per cent of the purchase price, including relevant taxes and the price of the Certificate of Entitlement.

For vehicles with an open market value of more than $20,000, the maximum loan will be capped at 50 per cent.

In addition, the tenure of a motor vehicle loan will be capped at 5 years.

In a statement on Monday, the MAS said: "The financing restrictions are necessary to encourage financial prudence among buyers of motor vehicles. In this prolonged environment of very low interest rates, there is greater risk of buyers over-extending t hemselves on motor vehicles."

The financing restrictions will not apply to loans for the purchase of commercial vehicles or motorcycles.

[ShaneL]

like that almost everyone can only get 50% loan.

lucky i bought my car liao....9+ years to work out a strategy 

[Arshavin]

Register my future car under an empty shell company. And still enjoy the 10 years loan period.

Haha

[Arshavin]

The rule will relax once ppl stop complaining of high COE and stop writing to papers asking government to let them buy affordable cars.

Now PAP really does something to solve the high COE prOblems

[Ricebandit]

I'm not so sure how this is going to go down. Using Tharman's Mazda 3 example, it now costs about 140k. So the max loan is 84k, which means a 54k cash downpayment. Not a lot of average folks who can ordinarily afford to run a car can stump up that sort of money.

Which basically says that only the well off can buy cars.

I'm all for not overspending beyond my means, but shouldn't adults be able to make that decision for themselves and not have it forced upon them?

[oreocookie]

actually the MAS ruling is good... encourages financial prudence... flipside is you tend to change cars more often.... since you ALWAYS get cash back/offset on purchase when changing cars.

[bbwannabe]

In the long run, they are transferring the cost of COE into your ARF.

For which, you get to keep 50% of at the end of 10 years. (As opposed to 0% for COE)

[Maeryn]

I was just watching the news update on Ch 5.  Loan tenure is capped at 5 years too.

 

Interestingly the next piece of news is on the Msia Opposition manifesto who wants to make cars cheaper.

[Arshavin]

In the long run, they are transferring the cost of COE into your ARF.

For which, you get to keep 50% of at the end of 10 years. (As opposed to 0% for COE)

 

 

ya agree.  but many common sporeans will think twice, thrice before committing to buy a normal sedan car.

[Arshavin]

I was just watching the news update on Ch 5.  Loan tenure is capped at 5 years too.

 

Interestingly the next piece of news is on the Msia Opposition manifesto who wants to make cars cheaper.

 

buy mercedes benz at KL then drive back to spore and never to return to malaysia

 

possible or not?

[Tigershark]

coe... going for a quick roller coaster ride!

[Tanzy]

In reality, latest moves means that cars are more expensive to buy for the average Singaporean.

 

Great for popularity.