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exquisite homes | square icon Residential Rent : Tax and Legal Issues

Tax & Legal Issues On Renting Residential Property In Singapore

A list of the most commonly asked questions relating to tax and legal matters when renting residential properties in Singapore.

What are the obligations as a Landlord?

In addition to those obligations stated in the Tenancy contract, the law does imply the following obligations for the Landlord:

  1. For quiet enjoyment of the land by the tenant
  2. Not to "derogate from his grant" or act in such a way as to frustrate the purpose for which the property was to be let
  3. For furnished premises, the landlord must ensure that the premises are fit for human habitation at the start of the tenancy
  4. Pay all property taxes and quit rent (if any)
  5. Be responsible for external repair and insurance

What are a Tenant's obligations?

Generally a Tenant's obligations include:

  1. To pay rent "without any deductions whatsoever"
  2. Responsible for internal repairs
  3. Not to make any alterations without the landlord's prior consent
  4. To use premises for the permitted purposes only
  5. Not to assign or sub-let any part or all of the premises without the landlord's prior consent
  6. Obligation to pay all taxes and rates for which the landlord is not liable
  7. To allow the landlord access to view the state of the premises if there is a covenant to repair
  8. Not to sub-let or assign the lease without the landlord's prior consent, which shall not be unreasonably withheld.

What actions can Landlord take if the tenant fails to pay rent?

If the Tenant has failed to pay rent for a continuous period (depending on what was stated in the Tenancy contract), the Landlord can obtain a writ of distress from the Court which authorizes the sheriff to seize and sell goods inside the property and recover rent (and legal costs) from the Tenant. Landlord also have the right to re-possess the property.

Does a Tenant have to pay a commission to the agent?

Generally, landlords will pay the agent the amount of 1 month rent for a 24 month lease. For a 12 month lease, half-month rental is payable to the agent.

Who pays for the stamp duty?

The Tenant pays for it.

Read more on Stamp Duty

What is a "Letter of Intent"?

This is a letter stating Tenant's intention to lease property from Landlord. It also includes Tenant's requirements for the property such as rent per month, furnishing, moving in date, etc as well as assisting Tenant and the Landlord for the initial negotiation.

What is a "Tenancy Agreement?

This is the legal contract between Tenant and the landlord. It outlines the terms and conditions of renting the property.

What is the "diplomatic clause" in a tenancy agreement?

This clause within the 2 years Tenancy Agreement enables Tenant to terminate the lease prematurely. Tenant can only terminate the lease after 12 months of lease as well as 2 months written notice to the landlord. It is subjected to documentary proof of being transfered or relocated to another country or discontinuing employment in Singapore.

Is a Tenant required to vacate the property if Landlord sells it before the end of the lease?

If it is a fixed-term tenancy, Tenant will just need to pay the rent to the new Landlord. If the lease is a periodic tenancy then the new Landlord is entitled to give notice for the same period of the tenancy to leave the property.

Are rental proceeds taxable?

Yes. They are taxed as income and after deducting property tax, repair and maintenance costs, interest payments to the banks and the like to generate income for the property.

What is the income tax amount Landlord has to pay for the rent proceeds?

It varies and is dependent on income level for the financial year.
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