Property Developers

Property developers are required to keep certain records and information and provide them to IRAS, upon request.

Purchase of Land/Property

Property developers should prepare the following documents when they purchase any land/property. Such documents must be retained and submitted to IRAS upon request:

  1. Location/ address of the land/ property;
  2. Date of purchase;
  3. Purchase price and incidental expenses;
  4. Description of the proposed development;
  5. Name and identification number (NRIC/FIN/UEN, etc.) of the vendor and whether the vendor is in anyway related to the company, its directors or shareholders.
    If so, the developer should provide details about the nature of relationship and state whether the purchase price was reflective of the market value of the land/ property as at the date of purchase;
  6. When the property purchased is not for development for sale, the developer should provide supporting documents to substantiate the intention for the land/ property acquired (e.g. for long-term investment); and
  7. Means of financing the purchase (e.g. bank loans, overdrafts).

Development of Property

When development of land/property has started, property developers should prepare the following documents. Such documents must be retained and submitted to IRAS upon request:

  1. Description of the development;
  2. Total number of units and floor area of units to be built;
  3. Date or expected date of Temporary Occupation Permit (TOP); and
  4. A schedule showing the allowable development costs.

Sale of Developed Property Units

Property developers should prepare the following documents when the developed property units are sold. Such documents must be retained and submitted to IRAS upon request:

  1. Date of TOP;
  2. Computation showing the tax adjusted profit or loss on sale of developed property units;
  3. For each developed property unit sold to related parties, the developer should provide:
    1. Official address of the unit;
    2. Full name and identification number (NRIC/FIN/UEN, etc.) of the purchaser and nature of relationship;
    3. Contracted date of sale, sale price and the floor area of the unit; and
    4. Details of whether the sale price was reflective of the market value of the property unit as at the date of sale.
  • If a property developer failed to fulfill any of the qualifying conditions stated in the Letter of Undertaking in relation to the remission of Additional Buyer’s Stamp Duty (“ABSD”), he is required to pay ABSD and interest on ABSD. What is the tax treatment of these expenses?

    New!ABSD and interest payable on ABSD are costs related to the acquisition of the land and are part of the development costs.

    For more information, please refer to tax treatment of the ABSD and interest payable on ABSD (80KB).

  • Must a property developer submit supporting documents to substantiate that the land/ property is acquired for development for long-term investment, together with its Income Tax Return?

    No, it is not required to do so. However, the property developer should prepare and retain supporting documents such as directors' resolutions and notes of board meetings stating such intention when they purchase the land/property, and submit them to IRAS upon its request.
  • What are the allowable development costs?

    The allowable development costs include land cost, stamp duty, property tax, construction cost, architect fee, differential premium, development charge and financing cost. 
  • Are marketing and promotional expenses incurred by property developers for the development of properties for sales and capitalised in the Development Cost Account for accounting purposes, deductible in the year in which they are incurred?

    Marketing and promotional expenses are deductible in the year in which they are incurred. Examples of such expenses are advertising fees, property agency fees, banners, brochures, architectural models and expenses incurred on a temporary show flat built purely for marketing purposes (i.e. the show flat will be dismantled and removed subsequently).
  • Are sales commission incurred by property developers in respect of the sale of specific units deductible in the year in which they are incurred?

    Sales commission are direct expenses incurred in respect of specific units sold.  Hence, such expenses are deductible in the Year of Assessment in which the sales proceeds of those specific units are brought to tax.

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