From YA 2015 till YA 2019, employers are required to use the AV to compute taxable accommodation benefits. Instead of AV, employers may also use the actual market rent paid for the accommodation to report the housing benefit, if it is administratively more convenient to do so. This also applies to cases where the AV is unavailable.
From YA 2020 onwards, employers are required to use the actual rent paid to report the accommodation benefits if the property is rented by the employer. Alternatively, if the employers do not pay any rent (e.g. where the property is owned by the employer), employers can continue to use AV of the property to report the accommodation benefits and the value of furniture and fittings is to be determined based on 40% (partially furnished) or 50% (fully furnished) of AV of the property.
Reporting actual rent
If employers use the actual rent paid for furnished units, they are to report the full rent for the property (including furniture and fittings).
Example 1: Actual rent and amount of furniture and fittings are provided
Where a tenancy agreement stipulates that the monthly rental is $3,000 for the property and $1,600 for the furniture and fittings, the amount to be reported as actual rent paid by employer would be $4,600. If the period of occupation is 10 months, the total amount of rent paid to be reported would be $46,000 (i.e. $4,600 x 10). The taxable value for the accommodation benefit is $46,000.
Example 2: Only monthly rental amount is provided
Where the monthly rental is $5,000 and there is no breakdown of the rental paid for the property and furniture and fittings, the amount to be reported as actual rent paid by employer would be $5,000. If the period of occupation is 12 months, the total amount of rent paid to be reported would be $60,000 (i.e. $5,000 x 12). The taxable value of the accommodation benefit is $60,000.
Example 3: Additional cost for rental of furniture and fittings
Where the monthly rental is $5,000 and the landlord provides some furniture and fittings at the property and the employer incurs a monthly rental of $500 for leasing additional furniture and fittings for the unit, the amount to be reported as actual rent paid by employer would be $5,500. This is regardless of whether the rental of the additional furniture and fittings is paid by the employer directly or by the employee but reimbursed by the employer. If the period of occupation is 12 months, the taxable value of the accommodation benefit is $5,500 per month and $66,000 (i.e. $5,500 x 12) per year.
For all the three scenarios, employers are not required to report the value of benefit for furniture and fittings separately as the gross rent (or together with the separate leasing of furniture and fittings) is inclusive of the value for the furniture and fittings.