The annual value of a house is the approximated gross annual rent the property will be able to collect a year should it be rented out to tenants on the open market.
For example, a house that is deemed to be able to fetch $2,500 a month of rental will have an annual value of:
$2,500 x 12 = $30,000
The computation of annual value is primarily for the purpose of property tax calculation.
It must be noted that there is a drastic difference in tax bracket between owner-occupiers and residential tax rates.
The former refers to homeowners who use the property as their residence, while the latter refers to property owners who use the property as investments and rent out to tenants.
Should an owner disagree with the annual value assessment by tax authorities, a formal objection can be filed to have the case reviewed.
