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Landlords of qualifying non-residential properties can refer to the Tax Treatment of Rental Relief Measures under the Rental Waiver Framework for Year of Assessment 2022. (for rental income received in 2021)
Under the Rental Relief Framework, owners (i.e. landlords) of qualifying non-residential properties would also have received a cash grant in 2020 and are required to provide rental waivers to eligible tenants.
For more information on the income tax reporting, please refer to the Rental Relief Framework – Reporting Year of Assessment 2021 rental income by individuals who are owners of non-residential properties.
Rental income refers to the full amount of rent and related payments you receive when you rent out your property. This includes:
The net rental income after deduction of any allowable expenses is subject to income tax. It is taxable from the date it is due and payable to the property owner, and not the date of actual receipt.
Your tenant rented your property from Oct to Dec 2021. However, he only paid the rent for this period in Jan 2022.
You need to declare the rent for Oct to Dec 2021 for the Year of Assessment 2022 as the rent was due to you in 2021.
Expenses incurred solely for producing the rental income and during the period of tenancy may be claimed as tax deduction.
Property owners who lease their residential properties can now enjoy the convenience of pre-filled rental expenses.
To simplify tax-filing and reduce the burden of record-keeping, an amount of deemed rental expenses calculated based on 15% of the gross rent will be pre-filled in the online tax form. In addition to the 15% deemed rental expenses, property owners may still claim mortgage interest on the loan taken to purchase the tenanted property. Please keep the supporting documents relating to the mortgage interest for at least 5 years for verification purposes. For deemed rental expenses claim, it is not necessary to keep records of the other rental expenses incurred.
Alternatively, property owners may opt to claim the amount of actual rental expenses incurred. Please retain all supporting documents such as tenancy agreements, bank mortgage statements, invoices and receipts for at least 5 years for verification purposes.
New! From Year of Assessment 2022, any expenditure incurred by a landlord for the repair, insurance, maintenance or upkeep of a property when it is vacant in any part of a basis period, and any property tax paid on that property for that vacancy period can be deducted against rental income. This is subject to the condition that reasonable efforts have been made to find a new tenant during the vacancy period(s) in between leases.
The table below lists allowable and non-allowable rental expenses:
Allowable expenses
Non-allowable expenses
Housing loans
Interest (including late payment interest^) paid on the loan or mortgage taken to purchase the property that is rented out.
(See Note 1 below)
Repayments of the principal loan or mortgage amount (monthly instalments).
Late default charges or finance fees^ imposed by banks for late repayment of loans.
Property tax
Incurred during the rental period (e.g. property tax paid for year 2021, on property rented out in 2021).*
Penalty imposed for late payment or non-payment of property tax.
Balance brought forward from previous year’s property tax.
Fire insurance
Premiums paid on fire insurance.*
Capital sum assured on property.
Repairs
Repairs done during the rental period to restore the property to its original state.*
Cost of initial repairs.
Repairs done which result in improvement/additions and alterations.
Maintenance
Cost of maintaining the property (e.g. painting, pest control, monthly maintenance charges [including late payment charges^] to management corporations).*
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 grilles).
Costs of securing tenant
New! From Year of Assessment 2022:
Agent’s commission, advertising, legal expenses and stamp duties incurred to obtain, grant, renew or extend a lease for first and subsequent tenants are allowed.
Note: No deduction may be allowed to a person in respect of:
a) any lease, or any renewal or extension of a lease, for a term that (excluding any option for the renewal or extension of the lease) exceeds 3 years;
b) any acquisition, grant, novation, transfer or assignment of a lease because of any acquisition, sale, transfer or restructuring of any business; or
c) a lease under an arrangement where the property is sold by, and leased back to the seller of the property.
Prior to Year of Assessment 2022, only the following are allowable:
Agent’s commission, advertising, legal expenses and stamp duties for getting subsequent tenants.
Agent’s commission, advertising, legal expenses and stamp duties for getting the first tenant of an additional property is deductible against the rental income of that property.
Prior to YA 2022, the costs for getting the first tenant is not allowed.
Costs of supervision or management fees
Costs in engaging a third party (e.g. property agent / company) to carry out activities such as ensuring rentals are paid promptly, maintenance and upkeep of the properties and attending to tenants queries and complaints.*
Where the management fees is paid to a related party (e.g. relatives or own company), owners need to justify that the amount paid is at market rate and commensurate with the services rendered.
Furniture and fittings
Replacements of furnishings (e.g. furniture, fixtures, electrical appliances) to its original state.
Hiring of furniture.
Depreciation of furnishings (e.g. furniture, fixtures, electrical appliances).
New improvements/additions made to furnishings (e.g. furniture, fixtures, electrical appliances).
Internet charges/expenses
Paid on behalf of tenant (i.e. not reimbursed by tenant).
Paid on behalf of tenant and reimbursed by tenant subsequently.
Utility expenses
Paid on behalf of tenant (i.e. not reimbursed by tenant).
Paid on behalf of tenant and reimbursed by tenant subsequently.
Expenses incurred on properties that are not generating rental income
N.A.
The relevant expenses incurred on such properties (e.g. rent, utilities, maintenance paid for own accommodation/a vacant property) cannot be claimed against the rental income generated from other properties as the expenses are capital and private in nature.
(See Note 2 below)
^ Only statutory fines or penalties imposed for the non-compliance/breach of a requirement of law are not deductible against your rental income.
* From Year of Assessment 2022, this includes costs incurred during the vacancy period(s) in between leases (provided that reasonable efforts have been made to find a new tenant during the vacancy period in between leases)
You bought Property X in 2020 for your own stay. In 2021, you decided to rent out Property X and rented a house (i.e. Property Y) near your office for the convenience of travelling to and from work.
The rent paid on Property Y is considered as a private expense and is not a deductible expense against the rent received from Property X.
First (Property A)
You have rented out your non-residential property at a gross rent of $5,000 per month for 10 months (Jan to Oct). Thereafter, you allowed your relative to occupy your property rent free. Besides the interest of $12,000 paid on the loan taken to purchase the property, you have incurred other expenses, namely property tax of $2,400, fire insurance of $180 and maintenance of $3,600. Your actual rental expenses are to be apportioned as follows:
Net rent
= $50,000 – $10,000 – $2,000 – $150 – $3,000
= $34,850
Note: the expenses incurred in Nov and Dec are not deductible.
If you have more than one tenanted residential property and opt to claim actual rental expenses on any one tenanted residential property, you will need to apply this treatment consistently to all your tenanted residential properties. You cannot claim 15% deemed rental expenses on one tenanted residential property and claim actual rental expenses on another tenanted residential property.
If your residential property has been approved for non-residential use (e.g. child care centre or workers’ dormitory), it is not considered as a residential property for tax purposes.
The deemed expenses option is not applicable under the following circumstances:
Find out more about Simplification of Claim of Rental Expenses for Individuals (PDF, 247KB).
For tenanted non-residential property, you would only be able to claim the actual rental expenses incurred. You are required to keep the supporting documents for at least 5 years for verification purposes.
You have rented out your residential property at a gross rent of $5,000 per month for the full year. Besides the interest of $12,000 paid on the loan taken to purchase the property, you have incurred a total amount of $7,500 on other deductible expenses, namely property tax, fire insurance and maintenance. You may claim the deemed rental expenses as follows:
Net rent
= $60,000 – $12,000 – $9,000
= $39,000
You are living in a 4-room flat with 3 bedrooms. You sublet one of the rooms for the full year. Your tenant pays you $600 per month as rent. The total amount of deductible expenses incurred for the whole flat is $3,000. You must apportion the allowable expenses incurred based only on the number of rooms rented out. Alternatively, you may opt to claim the rental expenses based on 15% of the gross rental income.
Your net rent is calculated as follows:
You have to declare the gross rent of your property in the previous year and details of deductible expenses of each property under ‘Other Income: Rent from property’ in your Income Tax Return.
The required details include the following:
You may use our Rental Calculator (XLS, 254KB) to compute your rental income if you opt to claim actual expenses incurred.
Rental income from partnership property
If rental income is derived by a partnership from its partnership property, the rental income is to be reported in the partnership Income Tax Return (Form P).
Where rental income is received by the partnership in the business of investment holding or operating coffeeshops/eating houses/food courts, the rental income is to be reported as business income of the partnership in the partnership Income Tax Return (Form P).
Rental income derived from partnership property
Precedent partner should file the Form P and include rental income/loss derived from partnership under “Other income – Rent”.
For each property, please include details of the gross rent (inclusive of rental of furniture and fittings, service charges received from the tenant) and expenses incurred.
Precedent partner should also enter each individual partner’s share of the rental income/loss at Partnership Allocation under “Other income from Partnership – Rent”.
The individual partner should enter their share of rental income/loss derived through partnership under “Partnership – Rent”.
Rental deficits (i.e. excess of deductible expenses incurred to rent out the property over the gross rental received from that property) cannot be offset against other sources of income.
However, if the precedent partner of the partnership e-files the Form P by 28 Feb of the year, the partnership allocation will be pre-filled in the respective partners’ Form B/B1.
Precedent partner should file the Form P and include rental income/loss derived from partnership as business income in the 4-line statement under “Trade, Business, Profession or Vocation”.
Precedent partner should also enter each individual partner’s share of the Divisible Profit/Loss at Partnership Allocation.
The individual partner should enter their share of business rental income/loss derived through partnership under “Partnership – Your Share of Divisible Profit/Loss”.
However, if the precedent partner of the partnership e-files the Form P by 28 Feb of the year, the partnership allocation will be pre-filled in the respective partners’ Form B/B1.
You may incur penalties for submission of incorrect returns (e.g. failing to report any rental income) to IRAS.
However, IRAS may waive the penalty if voluntary disclosure is made within the ‘grace period’ of 1 year from the statutory filing date.
Find out more about How to Report a Mistake to Qualify for Zero Penalty or Lower Penalty.
Losses from renting out your property cannot be carried forward and used to offset against any other income (e.g. employment income) that you may have in the same year or in the future.
However, as an administrative concession, you may use the rental loss of one property to offset against the taxable rental income of another property in the same year provided all the rented out properties have been rented out at market rates.
Property
Rental gain/loss
Rental gains from property A
$30,000
Less: Rental loss from property B
$10,000
Taxable net rent
$20,000 ($30,000 – $10,000)
You will be taxed on the net gain of $20,000 from these 2 properties.
To further simplify the filing obligations for taxpayers, we have pre-filled the rental details. Taxpayers only need to verify the pre-filled rental information and make amendments if necessary.
IRAS has pre-filled these details based on the rental information reported by you in the previous year and/or from our e-Stamping records.
Yes. The onus is on the taxpayer to ensure that the correct amount is reported in his income tax filing.
The information was pre-filled based on the rental information reported by you in the previous year or from our e-Stamping records. If the actual rent received by you was different, you must report the correct amount. Please note that there are penalties for filing an incorrect Income Tax Return.
The details were pre-filled based on the filing you have done in the previous year or from our e-Stamping records. If you have not rented out the property in the preceding year, please update the status of the property as ‘Not Rented Out’. If you have rented out the property for part of the year, please report the rental income received for that period.
Each co-owner should declare the full rental income and related expenses in their individual Income Tax Return. The co-owners should also indicate their percentage share of the net rent based on their legal share of the property.
The rental income details were pre-filled based on the filing you had done in the previous year or our e-Stamping records. If you have rented out the property for only part of the year, please adjust the rental period accordingly and report the rental income received for that period.
Please provide us with the address of the property and details of the rental income and expenses via email.
The rental income details for the first 7 properties will be pre-filled based on your filing in the previous year and/or our e-Stamping records. A consolidated amount will be shown for the eighth and subsequent properties based on your filing in the previous year and/or our e-Stamping records.
IRAS has pre-filled the rental expenses for your tenanted residential properties based on 15% of the gross annual rent.
If you wish to claim the actual expenses, please:
The approved use for your tenanted property was pre-filled based on the permitted use under the Planning Act.
As your property was permitted under the Planning Act to be used for non-residential purposes, you will have to claim actual amount of deductible expenses incurred even if you may have let out the property for residential use.
No, as your property was permitted for non-residential use for part of the basis period, you will have to claim the actual amount of deductible expenses against your rental income.
The amount of 15% deemed expenses is only applicable for tenanted residential properties. If you only derived rental income from tenanted properties permitted for non-residential use under the Planning Act, this option is not applicable to you.
No, as long as your property was permitted under the Planning Act to be used for non-residential purpose, you will have to claim the actual expenses.
No, you will have to either:
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Last updated on 25 April 2022