Recently the government announced the Budget 2023, which is meant to help the people and ensure a fairer tax system.
Here are some of the notable changes which may affect your cashflow:
This is meant to boost retirement savings for middle-income earners.
NOTE: There is no change to the CPF annual salary ceiling ($102,000) and CPF Annual Limit ($37,740).
How will this change affect you as a CPF member?
This change does not affect you.
As there will be additional mandatory contributions from employer and employee, you will see a reduced take-home pay, but increased CPF contributions.
This change does not affect you.
You may see a reduced monthly take-home pay (due to increased CPF mandatory contributions), but your annual take-home pay (including bonus) will remain the same.
If your income is > $6,000/mth, it would be good to review your monthly cashflow, together with the increased CPF contributions, to see how best to manage your expenses together with mortgage repayments.
As the change only affects properties above $1,500,000, it is mainly targeted at high-end luxury properties.
How will this affect you?
As a homeowner intending to purchase for own stay, you would need to factor in the marginal 1-2% increase in stamp duty during your purchase.
As a property investor, this marginal 1-2% increase may reduce your rental yield.
Together with the increase in property tax wef 2023, you would need to carefully evaluate the profitability of your investment property.
There’s been change in working mother child relief from a percentage of your income to a fixed amount.
How will this change affect you as a working mother?
This change will benefit you, since the fixed amount of relief is a higher percentage of your income, and therefore less tax is payable.
You can expect to pay more tax, since the fixed amount of relief is a lower percentage of your income.
The good thing is that this only applies to children born on or after 01/01/2024, and does not affect existing Working Mother Child Relief claims.
With all the upcoming changes in place, it would be useful to review your financial status, to minimize the impact on your cashflow and your financial goals like retirement funding. If you have any queries, do email me at firstname.lastname@example.org for a chat on your finances.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
Winnie is a Certified Financial Planner with more than 10 years experience in financial advisory services, helping many of her clients to achieve their financial dreams, while protecting their families.
With more than a decade of insurance claims experience, she has tangibly helped many clients receive their claims pay-outs successfully, relieving their financial burden.
As part of her community outreach program, she finds it very meaningful to conduct financial talks for companies where the staff can benefit from the talks. Some of the companies who have benefitted include National Kidney Foundation, Singapore National Eye Centre and Singtel.
Despite her busy schedule, she enjoys working out at the gym and playing the piano (currently pursuing Grade 6 ABRSM).
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