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 (PDF, 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 theFAQs.
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 refer to vacant residential land, and residential building, flat, or tenement (referred to as 'building').
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.
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.
Properties that do not fall within the definition of residential properties stated above are regarded as non-residential properties.
|Residential Properties||Non-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
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:
- When payment is received; or
- When an invoice is issued.
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:
- When payment is received; or
- 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:
- When payment is received;
- When an invoice is issued; or
- 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:
- When payment is received; or
- 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:
- The due date of each rental payment; or
- 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:
1. reducing the rent payable by the tenants; or
2. 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.
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
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, 423KB).
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:
- When commission is received; or
- 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).
A. GST Treatment on furnished residential properties
Do I have to account for GST on the sale of a furnished residential property?
The sale of the bare residential property is not subject to GST as it is an exempt supply. However, you need to charge GST on the supply of any movable furniture and fittings.
You must also apportion the selling price of your furnished residential property into:
- Value of furniture and fittings based on its open market value or cost (subject to GST); and
- Value of the bare property (not subject to GST).
Do I have to account for GST on the lease of a furnished residential property?
The rental of the bare residential unit is exempt from GST. However, you need to charge GST on the rental of the furniture and fittings.
To compute the rental value of the bare residential unit, the annual value (as shown in the Valuation List and Valuation Notice) of the property should be used.
The monthly rental value of the bare unit shall be taken as 1/12 of the annual value of the property.
The monthly rental value of the furniture and fittings will be the difference between the monthly gross rent (i.e. the total rental which you charged your tenant) and 1/12 of the annual value of the property.
If the actual gross rental is lower than 1/12 of the annual value of the property, you do not need to charge GST on the rental of furniture and fittings.
Total rental of the furnished flat = $4,500 per month
Annual value in the Valuation List = $36,000
Value of exempt supply (per month) = 1/12 x $36,000 = $3,000 per month
Value of supply of furniture and fittings (per month) = $4,500 - $3,000 = $1,500 per month
You must charge GST on $1,500. This is the rental value of your furniture and fittings for the purpose of GST charging.
This is regardless of whether a different amount for rental of furniture and fittings was stated in your tenancy contract.
Alternatively, if you wish to treat the rental as inclusive of GST, you can account for the GST based on the tax fraction of 7/107 of $1,500.
B. Things to note if you are a landlord
I am a landlord. Every month, I pay a maintenance or services fee to the developer or management corporation of my property. Subsequently, I recover the maintenance or services fee from my tenant. Do I need to charge GST on the recovery of the maintenance or services fee?
Yes, you need to charge GST to your tenant when you recover the maintenance or service fee from him.
As part of employee benefit, I allow my employee to use an apartment for free (i.e. without charging rent). Do I need to account for GST on the rental of the apartment?
When the apartment is furnished, you have to account for GST (output tax) on the value of furniture and fittings. Refer to Q2 for how to account for GST on the furniture and fittings.
When the apartment is unfurnished, you do not need account for GST (output tax) as the lease of unfurnished residential property is an exempt supply.
Do I have to charge GST on rental deposit?
However, if you subsequently use the whole or part of the deposit to offset any rent payable, you have to account for GST at the time you utilise it to offset the rental.
I incurred GST on fee paid to my agent for helping me to secure a tenant for my residential property. Can I claim the GST charged on the agent’s fee?
No, the lease of residential property is an exempt supply. Since the agent's fee is incurred for the making of the exempt supply, it is not claimable.
Do I have to account for GST on property tax if I am billing it together with the rental made to tenant?
If the rental of a non-residential property takes into account the property tax, you have to account for GST on the full rental. This is regardless of whether you have separately itemised the property tax from the rental. For rental of a residential property, the full rental shall be exempt from GST.
I install ventilation fans on the ceilings of my residential property which is leased out. Can I claim input tax for the GST incurred on the purchase and installation of the fans?
Generally, any fixtures that are immovable and installed permanently are considered as part of the bare residential property.
Therefore, the lease of residential property with installed ventilation fans is an exempt supply. As no GST is chargeable on the ventilation fan, input tax incurred on its purchase and installation is not claimable.
C. Is SoHo (small office home office) considered a residential or non-residential or mixed property?
Is SoHo (small office home office) considered a residential or non-residential or mixed property?
To determine the type of property, you should look at the property's approved use in the Grant of Written Permission issued by the Urban Redevelopment Authority (URA). For example, if it is approved as a condominium flat, it shall be treated as a residential property.
D. Sale of non-residential properties to a GST-registered Real Estate Investment Trust listed in Singapore or its GST-registered Special Purpose Vehicle
I sell a non-residential property to a GST-registered Real Estate Investment Trust listed in Singapore or its GST-registered Special Purpose Vehicle (i.e. buyer). The buyer will self-account for the GST on the property purchased. How do I report the sale in my GST return? Do I need to issue tax invoice for the sale?
You should report the price (excluding GST) of the property as standard-rated supply in the GST return for the prescribed accounting period in which the supply takes place. If the property sold includes movable assets such as furniture, furnishings, fittings, appliances or effects, the price of these movable assets should also be reported as standard-rated supply accordingly.
The corresponding GST amount should not be reported. For more information, please refer to GST: Self-Accounting of GST by Listed REITs and their SPVs for Property Purchases (PDF, 533KB).
You need to issue tax invoice to the buyer for the sale. It must include a clause to the effect that the output tax shown on the invoice is payable to the Comptroller of GST by the buyer of the property (e.g. "The buyer will account for S$XXX output tax on this supply of property (and movable assets).
I sell a non-residential property to a GST-registered Real Estate Investment Trust listed in Singapore or its GST-registered Special Purpose Vehicle (i.e. buyer). When should I issue tax invoice for the sale?
You should issue tax invoices according to the Sale & Purchase agreement with the buyer but not later than 30 days of the earlier of date of payment or legal transfer.
The same invoicing requirement applies to all sale of property, regardless of whether the buyer is a GST-registered Singapore listed REIT.