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.
The total rent received from the tenant must be declared. However, expenses can be claimed against rental income of the property. Expenses incurred during vacancy period cannot usually be claimed unless the owner can show that they have exercise best effort in letting out the property, these expenses may be considered.
The total rent and deductible expenses claimed must be reporedt when filing income tax returns. Tax will be calculated on the net rent which is the total rent received less total deductible expenses.
The following are deductible for tax purposes:
-interest on a mortgage load
-property tax
-fire insurance on the property
-commission paid on getting a tenant
-cost of renewing a lease or getting a new tenant (except for the first tenant)
-tenancy works in getting the property ready for new tenant like painting, installing curtains, etc
-monthly maintenance charges to management corporations
Note: There are situation where income derived through collection of rent may be taxed in Singapore and again in native homeland, please seek legal advise from an accountant.
Useful Resources:
Inland Revenue Authority Singapore
Guide to Property Tax for Private Residential Property
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