Filing your rental income for income tax is a crucial responsibility for property owners in Singapore. This article provides a step-by-step guide to determining taxable income, calculating allowable expenses, meeting deadlines, and using tools to simplify the process. To avoid penalties and ensure compliance, here is a step-by-step guide to help you navigate the process efficiently.
Step 1: Determine If Your Rental Income Is Taxable
In Singapore, rental income is taxable under the category of “Other Income”. This includes:
Rent received for residential or commercial properties.
Non-refundable deposits (e.g., forfeited security deposits).
Payments for the use of furniture, fixtures, or fittings.
However, refundable deposits, such as security deposits held in escrow, are not considered taxable unless forfeited.
The IRAS categorizes rental income as taxable if it includes rent for properties, non-refundable deposits, or payments for furnishings. Refundable deposits are generally excluded unless forfeited.
Step 2: Calculate Your Taxable Rental Income
To calculate your taxable rental income, you need to subtract allowable expenses from your total rental income. Examples of allowable expenses include:
Property tax.
Mortgage interest on loans taken to purchase the rental property.
Repairs and maintenance costs (excluding renovation costs).
Fire insurance premiums.
Commissions paid to property agents for securing tenants.
Utility bills paid on behalf of tenants (if not reimbursed).
Keep proper records and receipts to support these claims, as the Inland Revenue Authority of Singapore (IRAS) may request verification.
Refer to IRAS guidelines on allowable expenses.
Step 3: File Your Rental Income in Your Income Tax Return
Individual Property Owners
If you own the property individually, declare your net rental income under the “Other Income” section in your income tax return.
Log in to myTax Portal using your Singpass.
Select “Individuals” > “File Income Tax Return.”
Navigate to the “Other Income” section and declare your net rental income.
Joint Property Owners
If the property is jointly owned, the rental income should be declared based on the ownership share. For example, if you and your spouse own the property equally, each must declare 50% of the net rental income.
Property Held Under a Trust
For properties held under a trust, the trustee is responsible for declaring the rental income.
Learn more about filing as a trustee.
Step 4: Understand Your Tax Rates and Deadlines
Tax Rates
Rental income is taxed at the same progressive rates as your other income:
0% to 22% for residents, depending on your total annual income.
A flat rate of 15% or the progressive resident rate (whichever is higher) for non-residents.
Deadlines
The deadline for e-filing is 15 April of each year.
The deadline for paper filing is 18 April.
Check the most updated tax filing schedule.
Step 5: Keep Records for Audit
Maintain records of your rental transactions for at least five years. This includes:
Tenancy agreements.
Receipts for allowable expenses.
Bank statements showing rental income.
Additional Tips
Declare promptly: Non-declaration or under-declaration of rental income can result in penalties.
Seek professional help: If you’re unsure about any aspect of filing, consult a tax professional or engage the services of an accountant.
By following these steps, you can ensure that your rental income is filed accurately and on time, avoiding any unnecessary stress or penalties.
