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Renting a Property

Stamp Duty on leases is payable based on the declared rental or the market rental, whichever is higher, at the Lease Duty rates.

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Stamp duty is payable on documents relating to leases of immovable properties in Singapore such as :

Lease or tenancy agreement

Lease with Fixed Rent

A lease with fixed rental is one for which a fixed rental is agreed upfront for the entire lease period. Stamp duty on the fixed rental is based on lease duty rates.

Lease with Premium

A lease with premium is one for which there is a lump sum payment. Stamp duty is payable on the premium based on the BSD rates. If there is a rental in addition to the premium, stamp duty is payable on the rental based on lease duty rates.

Lease with Variable Rent

A lease with variable rental is one for which the rental varies during the lease period.

Examples

  1. staggered rental for different periods of the lease
  2. there is a fixed rental component and a variable rental component at x% of the sales turnover
Variation of Lease or Supplemental Agreement

If there is an increase in rental or the lease period is extended, stamp duty is payable on the document based on the increase in rental or the rental for the extended lease period. 

However, if there is a decrease in rental or the lease period is shortened, stamp duty is not payable for the document. 

Other variations where stamp duty is not payable

  1. Changing the use of the property with no additional payment
  2. Lifting the restrictions in the lease with no additional payment
  3. Amending the terms of the lease that do not affect the rental and lease term such as addition of an option to renew
Novation or Assignment of Lease

Stamp duty is payable on the consideration or the market value of the leasehold interest transferred, whichever is higher, at the BSD rates.

Surrender of Lease

Stamp duty is payable on the consideration for the leasehold interest surrendered at the BSD rates.

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Rates and Computation

Average Annual Rent (AAR)1Lease Duty Rates
AAR does not exceed $1,000 Exempted
AAR exceeds $1,000
Lease period of 4 years or less0.4% of total rent for the period of the lease
Lease period of more than 4 years or for any indefinite term0.4% of 4 times the AAR for the period of the lease

 1AAR refers to the higher of the average annual contractual or annualised market rent and includes other considerations such as payments for:

  • Advertising and Promotion charge
  • Furniture / Fittings charge
  • Maintenance charge
  • Service charge
  • Any other charges, excluding GST charges
Example 1: Lease with Staggered Rent (4 Years or Less)
Lease Period & Rent Lease Duty
 3-month Lease
 1st Month: $3,000
  2nd Month: $3,000
  3rd Month: $4,000		Total Rent

$3,000 + $3,000 + $4,000 = $10,000

Lease Duty
0.4% x $10,000 = $40.00 

 4-year Lease
1st Year: $3,500 per month
 2nd Year: $4,000 per month
 3rd Year: $4,300 per month
 4th Year: $5,300 per month		Total Rent

($3,500 + $4,000 + $4,300 + $5,300) x 12 = $205,200

Lease Duty
0.4%  x $205,200 = $820.80
$820.00 (rounded down to the nearest dollar)

 

Example 2: Lease with Staggered Rent (More than 4 Years)
Lease Period  & RentLease Duty
5-year Lease
1st Year: $1,800 per month
2nd Year: $2,000 per month
3rd Year: $2,500 per month
4th Year: $3,000 per month
5th Year: $3,300 per month		Total Rent

($1,800 + $2,000 + $2,500 + $3,000 + $3,300) x 12 = $151,200

Average Annual Rent

$151,200 / 5 years = $30,240

4 Times of AAR

= $30,240 x 4 = $120,960

Lease Duty
0.4%  x $120,960 = $483.84
$483.00 (rounded down to the nearest dollar)

 

Example 3: Lease on Commercial Unit Where Rent or Part of Rent is Percentage of Tenant's Sales Turnover (3 Years)
 Monthly Rent $5,000 plus 10% of gross sales turnover
 Service charge $400 per month
 Advertising and Promotional charge $100 per month
  • Rent is a variable amount. You should estimate a rent which is reflective of market rent when calculating Stamp Duty.
  • To calculate the Stamp Duty payable:
Estimated rent per month $5,000
Estimated gross rent per month $5,000 + $400 + $100 = $5,500
Total Rent $5,500 x 36 months = $198,000
Stamp Duty Payable 0.4% x $198,000
 = $792.00

 

Example 4: Increase in Rental Where the Original Lease Period and Parties Remain the Same (More Than 4 Years)

Original Lease Period  & RentVariation of Lease / Supplemental Agreement
 5-year Lease
 1st Year: $1,800 per month
 2nd Year: $2,000 per month
 3rd Year: $2,500 per month
 4th Year: $3,000 per month
 5th Year: $3,300 per month

5-year Lease
1st year: $2,000 per month
2nd year: $2,500 per month
3rd year: $3,500 per month
4th year: $3,800 per month
5th year: $4,300 per month

 Total Rent
 ($1,800 + $2,000 + $2,500 + $3,000 + $3,300) x 12 =  $151,200

Total Rent
($2,000 + $2,500 + $3,500 + $3,800 + $4,300) x 12 = $193,200
 Average Annual Rent
 $151,200 / 5 = $30,240		 Average Annual Rent
 $193,200 / 5 = $38,640
Total Rent (Capped at 4 Years)
$30,240 x 4 = $120,960 		 Total Rent (Capped at 4 Years)
 $38,640 x 4 = $154,560
  Increase in Total Rent (Capped at 4 Years)
 $154,560 - $120,960 = $33,600
 

Stamp Duty Payable (0.4% of the increase in Total Rent & Capped at  4 Years)

 0.4% x $33,600 = $134.40
 $134.00 (rounded down to the nearest dollar)

 

For rates before 22 Feb 2014, click here. 

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