Rental income from the letting of property in Singapore is subject to income tax, while your property is subject to property tax. Your rental income includes rent of the premises, maintenance, furniture and fittings. After deductions for allowable expenses (such as property tax), the net amount is taxable.
Use our Rental Calculator (249KB) to compute your rental income.
When is rental income taxable
Rental income is taxable when it is due and payable to the property owner, and not the date of actual receipt.
Your tenant rented your property from Oct to Dec 2012. He paid the rent for this period in Jan 2013, the following year.
You need to declare the rent for Oct to Dec 2012 in the Year of Assessment (YA) 2013 as the rent was due to you in 2012.
For solely owned property
The rental income is taxed on the sole owner. It does not matter whether the sole owner or a third party receives the rent.
For jointly-owned property
The rental income is taxed on all the joint owners based on their share in the property. It does not matter which party receives the rent or whether the owners paid for the property.
This also applies to rental loss. The rental loss is apportioned to joint owners based on their share in the property.
For an expense to be deductible from rental income derived in Singapore, the expense must be incurred:
- Solely for the purpose of producing the rental income; AND
- During the period of tenancy.
|Type of Expense
||Non Claimable Expenses
Interest paid on the loan or mortgage taken to purchase the property which is rented out. (See Note 1)
1. Repayments of the principal loan or mortgage amount (monthly instalments)
2. Penalty imposed by banks for late repayment of loans
||Incurred during the rental period (e.g. property tax paid for year 2012, on property rented out in year 2012)
1. Incurred outside the rental period
2. Penalty imposed for late payment or non-payment of property tax
3. Brought forward balance from previous year’s property tax
||Premiums paid on fire insurance
||Capital sum assured on property
||Repairs done to restore the property to its original state
1. Initial repairs
2. Repairs done which results in improvement/additions and alterations
3. Repairs incurred outside rental period
||Cost of maintaining the property (e.g. painting, pest control, monthly maintenance charges to management corporations)
||Cost of renovation, additions, alterations to the property (e.g. extension of car porch, construction of drains, cementing of walls and floors, installation of window grilles)
|Costs of securing tenant
1. Agent's commission, advertising, legal expenses and stamp duties for getting subsequent tenants
2. Cost of renewing a lease or changing a tenant
3. Agent's commission, advertising, legal expenses and stamp duties for getting the first tenant of a subsequent property is deductible against the rental income of that property.
|Agent's commission, advertising, legal expenses and stamp duties for getting the first tenant (see Note 2)
|Costs of supervision and rent collection
This expense is not deductible as it is incurred after the income is earned.
However, as a concession, if you rent out a number of properties and incur costs in engaging a third party (e.g. property agent / company) to supervise the properties and to collect rent on your behalf, a sum not exceeding 5% of the gross rent or the actual amount spent, whichever is less, may be considered. Each case will be considered on its own merits.
|Furniture and Fittings
1. Replacements of furnishings (e.g. furniture, fixtures, electrical appliances) to its original state
2. Hiring of furniture
1. Depreciation of furnishings (e.g furniture, fixtures, electrical appliances)
2. New/Improvements/Additions made to furnishings (e.g. furniture, fixtures, electrical appliances)
Paid on behalf of tenant (as long as not reimbursed by tenant subsequently).
|Paid on behalf of tenant, but reimbursed by tenant subsequently.
||Paid on behalf of tenant (as long as not reimbursed by tenant subsequently).
||Paid on behalf of tenant, but reimbursed by tenant subsequently.
Note 1: Illustration:
(a) Loan obtained (by mortgaging Property A) to purchase Property B.
- The loan interest is deductible provided rental income is generated from Property B.
(b) Loan obtained (by mortgaging Property A) to be used for other purposes e.g. to purchase another property for residential purpose or for business, etc.
- The loan interest is not deductible against rental income of Property A as the loan is not incurred to purchase the said property.
(c) Overdraft obtained for financing the purchase of Property A and also for personal use.
- Only that portion of the loan interest applicable to the amount of loan to finance the purchase of Property A is deductible against its rental income.
(d) For interest incurred on refinanced loans, please refer to e-Tax guide "Administrative concession on interest incurred by taxpayers on loans to re-finance earlier loans. or borrowings".
Note 2: As a concession, agent's commission, advertising and legal expenses for getting the first tenant of a subsequent property is deductible against the rental income of that property.
Subletting of property
Some landlords may choose to rent out a portion of their property (for e.g. 1 room) to their tenants. Landlords are required to apportion the claimable expenses incurred based on the number of rooms rented out.
You are living in a 4 room flat with 3 bedrooms. You sublet 1 of the rooms to your tenant from 1 Jan to 31 Dec 2012. Your tenant pays you rent of $600 per month. In addition, the total amount of deductible expenses incurred is $3,000.
Your net rent is calculated as follows:
|Gross Rent for the year 2012
||: $600 x 12 = $7,200
|Total claimable expenses incurred
|Total number of rooms in your property
||: 3 rooms
|Total number of rooms rented out
||: 1 room
|Proportion of claimable expenses allowed
||: $3,000/3 x 1 = $1,000
Net Rent = Gross Rent – Proportion of claimable expenses allowed
= $7,200 - $1,000
How to report Rent
You have to declare the annual value of your property in the previous year, and details of deductible expenses of each property under ‘Other Income: Rent from property’ in your tax form.
For property owned by more than 1 owner
All owners of the property have to give details of the total annual rent collected, total deductible expenses before showing each of their share of rent.
Non-Reporting of Rental Income
IRAS can detect non-reporting of rental information. Landlords with rental income should report the income in their tax returns. Those who have not done so by 18 April, the filing deadline, may email us.
There are penalties for submission of incorrect returns. However, IRAS may waive the penalty if voluntary disclosure is made within the 'grace period' of 1 year from the statutory filing date.
Find out more about how to report a mistake to qualify for zero penalty or lower penalty.
If your gross rent from the letting out of properties is less than the deductible expenses, you cannot use the rental loss to set off against any other income (e.g. employment income) that you may have in the same year.
Also, you cannot carry forward these losses to set off against any other income in the future.
However, as an administrative concession, you can use the rental loss of one property to set off against the taxable rental income of another property in the same year if all the tenanted properties have been rented out at market rates.
Example 3: Using the rental loss from one property to offset the rental gain from another property
Rental Gain/(Loss) in the year 2009
|Rental gains from property A
|Less: Rental loss from property B
|Taxable net rent
You will be taxed on the net gain of $20,000 from these two properties.
Transfer of rental losses between spouses
A married couple can transfer their rental losses between each other.
You can only offset the amount of rental loss transferred against your spouse's taxable rental income.
|Husband's taxable rental income in 2012
|Wife's rental loss in 2012
The wife can transfer $1,000 of her rental loss to be offset against husband's rental gain.
How to transfer
An election has to be made by both spouses in writing on a year to year basis, giving their names, identification numbers and signatures.
The election can be made at any time, including the time when you submit your income tax form. However, the election cannot be made after 30 days from the time you or spouse receive the Notice of Assessment, whichever is the later. Once made, the election is irrevocable.
We will re-compute you and your spouse's assessment to take into account the respective transfers. Any subsequent revision to either party's tax assessment will result in a corresponding revision to the other party's tax assessment.
Find out more about Net Annual Value (NAV) & expenses.