- Do I have to pay Tax for Rent Income.
- What is Net Annual Value (NAV).
- How to compute rent income.
- What expenses are deductible.
- When is it taxable
- Do I need to submit receipts and documents together with my income tax form to support my claim for deductible expenses
- My total rent is less than my deductible expenses, do I need to report my loss
- I own two properties. Can I deduct my loss in rent from property A against the gain in rent from property B
Do I have to pay Tax for Rent Income?
If you are a tax resident in Singapore, your net rental income will be taxed at resident rates.
If you are a non-resident in Singapore, your net rental income will be taxed at the prevailing rate of 20%.
What is Net Annual Value (NAV)?
NAV is the annual value (as shown in your property tax bill) of your property in Singapore less allowable expenses. Annual value is the gross amount at which the property can be expected to be rented from year to year. NAV of all residential properties is not taxable.
How to compute rent income?
Your rental income includes rent of the premises, maintenance, furniture and fittings. After deductions for allowable expenses (such as property tax), the net amount is taxable.
You have to report the total rent received from the tenant. Total rent includes charges on the property, the furniture and fittings and service charges.
If you are claiming expenses on the property, you need to show the details of the expenses incurred only during the rental period. You will be taxed on the net rent, which is the total rent less total deductible expenses.
Gross rent – Total Allowable Expenses = Net taxable rent
see : Allowable Expenses
What expenses are deductible?
The following are deductible for income tax purposes.
• Interest on your mortgage loan.
• Property tax.
• Fire insurance on your property.
• Repairs done to restore the property to its original state.
• Cost of maintaining the property (e.g. painting, pest control, monthly maintenance Charges to management corporations).
• Agent’s commission, advertising, legal expenses for getting subsequent tenants.
• Cost of renewing a lease or getting a new tenant (except for the first tenant).
The following are NOT deductible for income tax purposes.
• Repayments of the loan or monthly installments.
• Penalty imposed by banks for late repayment of loans.
• Penalty imposed by taxes.
• Repairs done which results in improvement.
• Cost of renovation, additions, alterations to the property (e.g. extension of car porch, construction of drains, cementing of walls and floors, installation of window grille).
• Agent’s commission, advertising and legal expenses for getting the first tenant**.
• Depreciation of furnishings (e.g furniture, fixtures, electrical appliances).
**Agent’s commission, advertising and legal expenses for getting the first tenant of a subsequent property is deductible against the rental income of that property.
When is it taxable?
Rental income is taxed on the date it is due and payable, and not the date of actual receipt.
Do I need to submit receipts and documents together with my income tax form to support my claim for deductible expenses?
You do not need to submit supporting documents together with your income tax form. You are however, required to keep these documents for 7 years for verification purposes.
My total rent is less than my deductible expenses, do I need to report my loss?
Yes, you have to report your total rent and details of the deductible expenses in your Income tax form even if you made a loss in rent. If your gross rent from property is less than your deductible expenses, you cannot offset such rental deficits against any other income you may have in that year or any other years. You cannot carry forward the previous year’s rental deficits against the current year’s rental gain.
I own two properties. Can I deduct my loss in rent from property A against the gain in rent from property B?
Yes, offset the amount of rental loss of one property against the taxable rental income of another property B. You will only be taxed on the net gain from these two properties.
For more information, please visit Inland Revenue Authority of Singapore.
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*Please note that information provided is as it is basis, whilst every effort has been made to provide up-to-date information. The author is not responsible for inaccuracies or whatsoever as a result from using this information.
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