The rental income that a property owner received from their tenant is a taxable income and therefore subject to income tax in Singapore. In order to arrive at the taxable net rental income, a property owner (whether an individual, company or another form of legal entity) is required to declare the gross rent received and deductible expenses incurred in the previous year for each of their property.
Rental income includes rental of the premises, maintenance, furniture, and fittings.
Allowable expenses incurred solely for producing the rental income and during the period of tenancy can be claimed and deducted against the gross rental income. Allowable expenses are interest paid on housing loans, property tax, fire insurance premiums, repairs and maintenance of the property, cost of securing tenants (from second tenant onward), furniture and fittings, internet, and utility expenses.
Please do take note that some expenses are not allowed as tax deductions. Examples include repayments of the principal loan amount, late payment penalties imposed by banks, agent’s commission for the first tenant, renovation costs, etc.
Therefore, please remember to report your rental income in your annual tax return. Penalties may be imposed for failure to submit rental income returns.
For more details, get in touch with a certified public accountant (CPA) in Singapore.
