Property Tax

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Property Tax

Disclaimer
Tax law is complex and every effort has been made to offer information that is current, correct and clearly expressed. The information in this summary is intended to be no more than a general overview of the position and certain details have been deliberately omitted. The contents of this page should not be taken as an authoritative statement of Singapore tax law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.

• See the Inland Revenue Authority Singapore (IRAS) website for full details: Click here

Tax on Property

Property tax is levied on the registered owner of a property and is payable to the government.

Property tax is imposed on immovable properties and is payable in advance each year or by monthly direct debit. The tax payable in respect of a property is calculated by applying the applicable tax rate to the estimated annual rent a property could fetch if it were rented out.

Owner-occupied residential properties are taxed at a concessionary rate of four percent of the annual value. The prevailing property tax rate for industrial, commercial and let-out residential properties is ten percent.

• A claim form for owner occupier tax rate can be downloaded: Click here (PDF)  

When a building is demolished, the land is assessed at five percent of the market price of the land.

Tax on rent income from a property

• See the Inland Revenue Authority Singapore (IRAS) website for full details: Click here

Tax is payable to the government on rental income of a property. The owner of the property receiving the income is responsible for declaring and paying this tax, regardless of whether they are resident in the property.

The total rent received from the tenant must be declared. Total rent includes charges on the property, the furniture and fittings and service charges.

Expenses can be claimed against rental income on the property. Expenses incurred outside the period of tenancy cannot usually be claimed. However, if an owner can show that they intend to let out the property, these expenses may be considered.

The total rent and deductible expenses claimed must be reported when filing income tax returns. Tax will be calculated on the net rent, which is the total rent less total deductible expenses. Supporting documents do not need to be submitted but must be kept for seven years.

The following are deductible for tax purposes:

• interest on a mortgage loan
• property tax
• fire insurance on the property
• commission paid on getting a subsequent tenant
• cost of renewing a lease or getting a new tenant (except for the first tenant)
• repairs and maintenance, which may include painting, pest control, and monthly maintenance charges to management corporations

The following are NOT deductible for tax purposes:

• mortgage or bank loan repayments
• agent's commission, advertising, legal costs for getting the first tenant
• depreciation of furniture and fixtures
• costs of renovation, additions, and alterations to the property, for example extension or car porch

Withholding Tax

A non-resident is liable to pay income tax on Singapore-sourced income. If a person makes a payment of a specified nature to a non-resident they are required by law to withhold a percentage of that payment and send it to the Comptroller of Income Tax.

• For more information on withholding tax see AngloINFO INFOrmation Page on Taxes: Withholding, Capital Gains, Trusts, Estate Duty, Stamp Duty

Link-up between IRAS and MDA

From 1998, the Inland Revenue Authority of Singapore (IRAS) has linked up with Media Development Authority (MDA). With this link-up, IRAS will send a combined bill for Property Tax and the TV licence fee. Tenants of residential property should agree with the owners of the property who pays the TV licence fee. TV licences can be obtained from any post office.

Further Information

• Individual Income Tax from the IRAS website
• Corporate Tax page from the IRAS website
• See the AngloINFO INFOrmation Page on Taxes: Withholding, Capital Gains, Trusts, Estate Duty, Stamp Duty
• See the AngloINFO INFOrmation Pages on Corporate Tax
• See AngloINFO INFOrmation Page on Income Tax in Singapore
• See AngloINFO INFOrmation Page on Property Tax