Singapore has one of the most active property markets in Asia, and many residents own investment properties that generate rental income. Whether you are renting out an HDB flat, a condominium unit, or a landed property, the rental income you receive is taxable. Understanding how the tax works, what deductions you can claim, and how to file correctly can save you a significant amount of money and prevent problems with IRAS down the line.
How Rental Income Is Taxed
Rental income in Singapore is taxed as part of your total personal income. It is added to your employment income, business income, and any other assessable income for the year. The combined total is then taxed at the standard progressive resident rates, ranging from 0 per cent on the first S$20,000 to 22 per cent on income above S$320,000.
There is no separate tax rate for rental income — it is simply lumped in with everything else. This means that for many working adults who also earn a salary, rental income sits on top of their employment income and is effectively taxed at their marginal rate. If your salary already puts you in the 15 per cent bracket, your rental income will be taxed at 15 per cent (or higher if it pushes you into the next bracket).
For non-residents, rental income derived from Singapore property is taxed at the prevailing non-resident rate of 22 per cent on the net rental income. Non-residents can still claim deductions against the gross rent to arrive at net rental income.
Calculating Net Rental Income
You are not taxed on the gross rent you receive. Instead, you are taxed on your net rental income, which is calculated as gross rent minus allowable expenses. Getting this calculation right is where most landlords can save meaningful amounts of tax.
Gross rent includes all payments received from the tenant. This covers the monthly rent, any lump-sum payments, the value of any furnishings or fittings the tenant provides for your benefit, and reimbursements of property tax or other outgoings if the tenant pays them on your behalf.
If the property is co-owned, each owner declares rental income in proportion to their share of ownership. Joint tenants typically split 50-50, while tenants-in-common split according to their respective shares as stated in the title deed.
Allowable Deductions for Landlords
IRAS allows landlords to deduct a range of expenses incurred in producing the rental income. The most common deductions include:
- Mortgage interest: Interest paid on a loan taken to purchase or renovate the rental property is deductible. Only the interest portion of the mortgage payment is deductible, not the principal repayment. If the property is your home and you rent out part of it, only the interest attributable to the rented portion is deductible.
- Property tax: The property tax paid on the rental property is deductible. Note that this is the tax levied by IRAS on the Annual Value of the property, not the stamp duty paid on purchase.
- Fire insurance: Premiums for fire insurance on the building structure are deductible. Mortgage insurance or life insurance is not.
- Maintenance and repairs: Costs of maintaining the property in its existing condition are deductible. This includes painting, plumbing repairs, replacing broken fixtures, and servicing air conditioning units. However, renovation and improvement costs that enhance the property beyond its original condition are capital in nature and not deductible.
- Agent commission: Fees paid to a property agent for finding tenants are deductible in the year they are incurred.
- Furniture and fittings: If you provide furniture and fittings in the rental unit, you can either claim a wear and tear allowance (depreciation) over the useful life of the items, or claim a flat deduction based on the actual cost.
- Condo management fees and service charges: Monthly maintenance fees paid to the management corporation are deductible for the period the property is rented out.
Expenses You Cannot Deduct
Not every property-related expense is deductible. Common non-deductible items include the cost of the property itself (this is a capital expense), renovation costs that improve the property, stamp duty on the purchase, legal fees for the purchase (though legal fees for tenancy agreements are deductible), principal repayments on the mortgage, and any expense incurred during a period when the property is not rented out and not available for rent.
The last point is important. If your property is vacant for three months between tenants and you are not actively marketing it for rent during that period, IRAS may disallow expenses claimed during those months. If you can demonstrate that you were actively seeking a tenant (for example, through agent listings or advertisements), the vacancy period expenses should remain deductible.
Property Tax on Rented Properties
In addition to income tax on rental income, property owners must pay property tax assessed by IRAS based on the Annual Value (AV) of the property. The AV is the estimated annual rent the property could fetch if it were rented out, and it is determined by IRAS based on market rents for comparable properties.
For owner-occupied residential properties, concessionary tax rates apply (starting at 0 per cent for the first S$8,000 of AV and rising progressively). For non-owner-occupied properties (which includes rental properties), the rates are higher — starting at 12 per cent on the first S$30,000 and going up to 36 per cent for AV above S$90,000. These rates were increased from 2024 as part of a broader set of property cooling measures.
Property tax is a separate obligation from income tax. You pay property tax regardless of whether the property is generating rental income. However, as mentioned above, the property tax paid on a rented property is deductible against the rental income for income tax purposes.
Filing Rental Income
Rental income is declared in your annual tax return (Form B or Form B1) under the "Rent from Property" section. You need to provide the property address, the gross rent received, the total allowable expenses, and the resulting net rent. If you own multiple rental properties, each must be reported separately.
You should keep supporting documents — tenancy agreements, receipts for repairs and maintenance, mortgage statements showing interest paid, property tax notices, and agent invoices — for at least five years. IRAS may request these during a review or audit.
Common Mistakes Landlords Make
The most frequent errors IRAS encounters with rental income declarations include claiming the full mortgage payment instead of just the interest, deducting renovation costs as repairs, failing to declare rental income from informal arrangements (such as renting a room to a friend), not apportioning expenses when only part of the property is rented out, and claiming expenses during vacant periods when the property was not marketed for rent.
Another common mistake is not declaring the rental deposit. Rental deposits are not taxable income when received because they are held on trust for the tenant. However, if you forfeit or use the deposit (for example, to cover unpaid rent or repair damage), the amount forfeited becomes taxable income in the year it is applied.
Final Thoughts
Rental income is a significant source of wealth for many Singaporeans, but it comes with real tax obligations. Claiming all legitimate deductions — especially mortgage interest, property tax, and maintenance — can substantially reduce your tax bill. Keep proper records, file on time, and be honest about vacancy periods. If you are unsure about a particular expense, err on the side of caution or consult a tax professional. Use our Singapore income calculator to see how rental income on top of your salary affects your overall tax position.