Real Estate

The sale and lease of properties in Singapore are subject to GST except for residential properties. GST is also chargeable on the supply of movable furniture and fittings in both residential and non-residential properties. Real estate agents must charge GST on the brokerage fees received from the real estate agencies. 

From 1 Jan 2020, GST-registered businesses which procure services from overseas suppliers (“imported services”) that fall within the scope of reverse charge will have to account for GST on the value of imported services if they are not entitled to full input tax or if they belong to a GST group that is not entitled to full input tax credit. 

 

Charging GST on Real Estate

The sale and lease of residential properties are exempted from GST (i.e. GST need not be charged).

The sale and lease of non-residential properties are subject to GST.

For properties that consist of both residential and non-residential portions, only the non-residential portion is subject to GST.

With the implementation of reverse charge on 1 Jan 2020, GST-registered developers or owners of residential properties will have to account for GST on the value of imported services as they are not entitled to full input tax credits. They will be entitled to claim the GST accounted as input tax, subject to the normal input tax recovery rules. For more information, please refer to GST: Taxing imported services by way of reverse charge (1202KB).

Furnished Residential Properties

When the residential properties are furnished, you must charge GST on the supply of movable furniture and fittings .

However, fixtures such as built-in cabinets and wardrobes, kitchen and sanitary wares, wall-mounted air conditioners that are attached permanently to the residential property can be exempted from GST together with the property.

For information on how to account GST on the sale and lease of furniture and fittings, please refer to the FAQs .

Residential vs. Non-Residential Property

As different GST treatment applies to residential and non-residential property, you need to identify if your property is residential or non-residential.

Residential Properties

Residential properties refer to vacant residential land, and residential building, flat, or tenement (referred to as 'building').

Land
It is considered as residential land if it is a vacant land zoned 'Residential' in the Master Plan and the use of the land is approved for residential or condominium development.

Residential land includes vacant land or land with existing building (which is required by the Government or public authority to be demolished) which is supplied by the Government or public authority and approved exclusively for residential or condominium development.

Building
A building is a residential building if it is approved for use or approved to be used for residential purposes. Please refer to the approved use of the building that is granted by the relevant authorities during the relevant period in which the supply occur.

    Non-Residential Properties

    Properties that do not fall within the definition of residential properties stated above are regarded as non-residential properties.

    Common Examples

    Residential PropertiesNon-residential Properties

    Dwelling houses (e.g. bungalow)

    Boarding or guest houses

    Living or workers' quarters

    Chalets, holiday bungalows or resorts

    Halls of residence

    Canteen in halls of residence

    Upper floor of shop-houses approved for dwelling only

    Lower floor of a shop-house approved for non-residential use

    Serviced apartments

     

    When to report GST (Time of Supply)

    Sale of Completed Non-Residential Property

    For the sale of completed non-residential property, you will normally receive an option fee, followed by a deposit when the option is exercised. The property is usually transferred to the buyer upon completion of the sale.

    Booking Fee and Deposit

    You must account for output tax on the option fee and deposit at the earlier of the following events:

    1. When payment is received; or
    2. When an invoice is issued.

    Remaining Sum

    For the remaining sum payable, you must account for GST at the earliest of the following events:

    • When payment is received;
    • When an invoice is issued;
    • When property is made available to the buyer for occupation; or
    • When title of property is transferred upon legal completion.

    In the event that your lawyer remits the GST charged on the sale of property directly to IRAS, you are still required to report the property sale in your GST return. Specifically, you are required to report the sale value of the property (excluding GST) and the corresponding GST amount in Boxes 1 and 6 of your GST return respectively.

    Sale of Non-Residential Properties Under Construction

    As the property is still under construction, payments are collected progressively according to the schedule of payments specified in the agreement (e.g. based on the stage of completion of the development).

    The property is usually made available to the buyer for occupation after the issuance of Temporary Occupation Permit (TOP).

    Progress Payments Before TOP

    You must account for output tax at the earlier of the following events:

    1. When payment is received; or
    2. When an invoice is issued.

    Remaining Sum Once TOP is Issued

    However, once Temporary Occupation Permit (TOP) is issued, you have to account for GST on the remaining sum payable at the earliest of the following events:

    1. When payment is received;
    2. When an invoice is issued; or
    3. When property is made available (TOP is issued) to the buyer.

    Lease of Non-Residential Properties

    For the rental of non-residential properties, you must account for output tax at the earlier of the following events:

    1. When payment is received; or
    2. When an invoice is issued.

     

    Single Invoice for Multiple Monthly Rentals

    When you issue one tax invoice for monthly rentals covering a number of months in advance, you must state the due date for each rental and the corresponding GST chargeable in the tax invoice.

    Accordingly, you will account for GST for each rental at the earlier of the following:

    1. The due date of each rental payment; or
    2. When you received the rental payment.

    COVID-19 Support Measures

    As part of the relief measures announced by the Government to provide cashflow relief to businesses who are impacted by the COVID-19 situation, the following relief measures have been put in place:

    (i) Property Tax Rebate

    Under the COVID-19 (Temporary Measures) Act, the property owner is required to fully and unconditionally pass on to the tenant the property tax rebate that is attributable to the rented property based on the period it was rented out, by either reducing rentals or through a payment to the tenant. This passing on of the property tax rebate to the tenant is regarded as a discount given on the rental and GST is computed on the net rental charged regardless of the mode of disbursement. Please refer to the worked examples for the GST computation:

    Reducing current or future rental

    Example 1a: The landlord is passing the property tax rebate of $100 to the tenant by reducing current rental. The rental is $1,000 before GST. As the property tax rebate is treated as a discount, GST is charged on the net rental of $900. The landlord has to account for GST of $63 (900 x 7%).

    Example 1b: The landlord is passing the property tax rebate of $1,000 to the tenant by reducing the current rental. The rental is $1,000 before GST. As there is no net rental payable after deducting the property tax rebate, no GST is to be charged. 

    Issuance of credit note

    Example 2: The landlord has already billed the tenant and hence, is passing the property tax rebate of $100 to the tenant by making a lump sum payment with credit note. The credit note will reflect the property tax rebate passed on as $100 with GST credit of $7.

    (ii) Government Cash Grant as part of Rental Relief

    As announced in the Fortitude Budget, qualifying property owners will receive support via a Government cash grant and they must in turn provide support in the form of rental relief to eligible Small and Medium Enterprises (SMEs) tenant-occupiers. 

    With the Government Cash Grant, property owners are required to provide rental waiver to the eligible SME tenants and they may do so by: 

    a. reducing the rent payable by the tenants; or
    b. giving a refund to their tenants if rent has already been paid. 

    The rental waiver is treated as a discount given on the rent by property owners and/or landlord. As such, GST should be charged on the net rent (including maintenance fee and other charges for the provision of services such as cleaning and security). Like the passing on of Property Tax rebate in (i), if the landlord has already billed the tenant and is providing the rental waiver by giving a refund, the landlord should issue a credit note to reflect the discount given and the corresponding GST credit.

    In some instances, property owners and/or landlords may provide voluntary rental support for their tenants beyond the (i) Property Tax Rebate and (ii) Government cash grant as part of rental relief. In other words, property owners and/or landlords may waive rental payment or provide refunds for their tenants beyond what is covered under (i) and (ii). These are also treated as discounts for GST purpose.  

    The amount of rental relief that can be treated as discount for GST purpose is capped at the total value of contractual rent for Year 2020. In the event that property owners or landlords provide relief beyond the total amount of contractual rent for Year 2020, the amount given in excess will be treated as a goodwill payment. Please refer to Example 3 below.

    Example 3

    Year 2020 contractual rental: $12,000 per annum 

    GST already collected on Jan to Jun 2020 rent: $420 ($6,000 x 7%)

    Rental from Jul to Dec 2020: Waived 

    As the landlord is waiving the Jul to Dec 2020 rent and there is no net rental payable, no GST is to be charged. If the landlord is also making refunds to the tenant for rental collected from Jan to Jun 2020, the maximum amount of GST credit it can reflect in the credit note issued is $420. 

    Claiming GST Incurred

    You can claim GST incurred on the purchase of non-residential properties, subject to the conditions for claiming input tax .

    Such claims can include the GST incurred on the purchase of property, conveyance expenses, construction and development costs and professional fees.

     

    GST incurred on the purchase of residential properties is not claimable. However, GST relief is allowed for the purchase of land for residential development.

     

    With the implementation of reverse charge on 1 Jan 2020, you may be required to account for GST on the value of imported services if you are not entitled to full input tax recovery, e.g., if you sell or lease residential properties. You can claim the GST accounted on your imported services as your input tax (subject to normal input tax recovery rules) in the same prescribed accounting period that you apply reverse charge on the imported services. 

     

    For more information, please refer to GST Incurred on Purchase of Land for Residential Development (PDF, 450KB).

    For more information on GST treatment for transactions relevant to property developers, please refer to GST: Guide for Property Developer (PDF, 737KB).

    For more information on GST treatment of transactions relevant to property owners and property holding companies, please refer to GST: Guide for Property Owner and Property Holding Companies (PDF, 655KB).

    For more information on reverse charge, please refer to GST: Taxing Imported Services by way of Reverse Charge (PDF, 1202KB).

    Real Estate Agencies

    The real estate agency provides brokering services to the sellers or buyers of properties, while the real estate agents provides brokering services to the real estate agency.

    The commissions received for the brokering services provided are subject to GST. This is regardless of whether the property is residential or non-residential.

    GST is accounted for at the earliest of the following events:

    1. When commission is received; or
    2. When tax invoice is issued.

    For more information on the GST treatment for transactions relevant to real estate agencies, please refer to GST: Real Estate Agency Industry(PDF, 173KB).

    FAQs