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Singapore - Property Letting

If you decide to let out your property in Singapore there are a few things you should keep in mind.

If you let it without permission you can be fined as much as $5,000 and imprisoned for five years.

Some of the areas have a higher rental yield than others. For instance, properties in the Central Area will probably yield more rent than those on the East Coast. Keep in mind that the Inland Revenue Authority of Singapore treats rental as part of income and charges income tax accordingly. The tax for a foreigner who possesses employment in Singapore is a lower tax than for a foreigner who does not have an employment pass.

When letting your property, you’ll want to ensure that your future tenant is legal. You can verify his Work Pass on the Ministry of Manpower’s website. If you rent your property to an illegal immigrant then you face stiff fines and penalties and can be held responsible. You can contact the Ministry of Manpower’s Work Pass Division at:

Work Pass Division
Ministry of Manpower
18 Havelock Road
Singapore 059764
Fax No: (65) 6317 1329

If you are subletting your HDB property, you’ll need to contact the HDB Board and fill out an application. You are prohibited from subletting your property for 3 or 5 years, depending on the kind of flat it is (three years for a non-subsizied flat purchased without a CPF grant and five years if it is a non-subsidized flat purchased after 2010 from the open market).

For non-e-stamping cases, you must contact the IRAS within 15 days of letting out your property. If you do not, you can be fined up to $5,000. If your tenancy agreement has been e-stamped, you don’t have to notify the IRAS. The income you receive from your rent is taxable.

If you do decide to let out your property, working with a property agent is a good way of ensuring that you’re following all of the rules. A good agent will help you not only find a qualified tenant but help you ensure that you’re adhering to the guidelines and requirements of the law.

You must pay tax on any rental income that you might receive. The property owner is responsible for declaring and paying this tax, even if they do not live in the dwelling. When the amount is declared, the total rent received must be included. This includes the property’s charges as well as any furniture and service charges. However, expenses can be claimed against any rental income on the property, including any commissions you have to pay to an agent to renew a lease or find a new tenant in addition to any repairs or maintenance you have to pay.

When you file your taxes, the total rent and deductible expenses claimed must be reported. The tax will be calculated on the net rent. The net rent is the total rent less total deductible expenses. Keep supportive documents for at least seven years.

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