Renting in Singapore, Getting Started

99.co’s guides: All about stamp duty for rental units in Singapore

November 22, 2016
Tenants need to be aware of paying the stamp duty on their rentals

Tenants need to be aware of paying the stamp duty on their rentals

Stamp duty is a tax on documents which are related to the purchase or lease of a property. It is payable within 14 days after the date of the document (E.g: Sale & Purchase Agreement, Tenancy Agreement); if the document is signed in Singapore.

In Singapore, in addition to the monthly rent and security deposit, a tenant is required to pay a tax (surprise!) upon signing the tenancy agreement. Otherwise known as a stamp duty, it is payable when a tenant:

  • Rents the entire property or part of a residential property
  • Agrees to renew or extend the lease renting of entire apartments and rooms

Who pays for the stamp duty? 

For tenancy agreements, the tenant is liable to pay the stamp duty. The tenant may also request their agent (if applicable) to assist with this if they are unfamiliar with the process.

How much stamp duty am I supposed to pay? 

The amount of stamp duty is dependent on the monthly rent, as well as the duration of your lease period. Below is an example for an apartment with a total monthly rent of $3000, for a lease period of 18 and 24 months. Naturally, the higher the rent and the longer the period of stay, the higher the amount of stamp duty that is payable.

Total Monthly rent (including base rent, furniture, and others) $3000
Total Rent over 24 months $3000*24= $72,000
0.4% of total rent for the period of the lease $72000/250 = $288
Payable Stamp Duty = $288

As another example, if the lease period was 18 months instead of 24, the payable stamp duty would amount to $216 as shown below.

Total Monthly rent (including base rent, furniture, and others) $3000
Total Rent over 18 months $3000*18= $54,000
0.4% of total rent for the period of the lease $54000/250 = $216
Payable Stamp Duty = $$216

When should the stamp duty be paid?

Technically, a tenancy agreement is required to be stamped before tenants sign it. However, for practicality, this almost always never happens. In reality, a tenancy agreement can still be stamped, with no penalty, if it is done within the following time frame:

  1. Within 14 days after signing the document if it is signed in Singapore or
  2. Within 30 days after receiving the document in Singapore if the document is signed overseas

Where can tenants get their tenancy agreement stamped?

If tenants choose to proceed with stamping of their documents themselves, they can do so at their own convenience via the IRAS website. Alternatively, they can head down to these service bureaus to do it in person.

Penalties for failing to pay the stamp duty

It is an offence to use a tenancy agreement if its stamp duty has not been made. Actions can be taken by the authorities (and the landlord) against tenants who fail to pay on time or completely ignore paying it altogether.

For late payments not exceeding 3 months, a penalty of $10 or an amount equal to the duty payable, whichever is greater, will be imposed.

For late payments exceeding 3 months, a penalty of $25 or 4 times of the duty payable, whichever is greater, will be imposed.

Penalties for failing to pay the stamp duty

For landlords, it is a common concern to wonder whether their tenants have paid their stamp duties on the tenancy agreement. Fret not, there is a way to find out if they did on the IRAS website. All that they need is to obtain the document and stamp certificate reference number.

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12 Comments

  • Reply Xoo April 7, 2016 at 11:32 am

    This article is misleading. Room rental also needs to be stamped. Refer to IRAS website please before you publish.

    • Reply Jamal April 7, 2016 at 5:56 pm

      Hi Xoo, you are actually right 😀 The stamp duty is also applied to room rentals. I have corrected the article. Thank you so much for your valuable feedback on this article 🙂 Be in touch!

  • Reply x April 21, 2016 at 9:32 am

    totally misleading. For rentals, tenants are the one paying stamp duty!

    • Reply Jamal April 21, 2016 at 11:07 am

      Rightly said, tenants are the one paying stamp duty. The party who is liable to pay Stamp Duty is usually stated in the agreements. For example, if you rent a property, the tenancy agreement should state who is liable to pay Stamp Duty. Source: IRAS. (This is also true that if you are good in negotiating, the landlord can reimburse or pay the amount of stamp duty for you but still the payment would need to be done in the tenant’s name). I have simplified the statement in the article. Thank you so much for pointing out and letting us know! Have a great day 🙂

  • Reply KH May 13, 2016 at 11:39 pm

    Hi Jamal, I’d like to point out an error in the calculation although it’s pretty minor – in the 2nd example the two $72,000 (in second and third row each) should be $54,000 I believe 🙂 Thanks for the useful information! And do you also happen to know around how much, on average, of admin fee an agent charges for the processing of document usually? I was asked to pay a pretty large sum as ‘admin fee’ for this so I got little skeptical about it…

    • Reply Adam R. May 16, 2016 at 6:46 pm

      Hi KH,

      Thank you for pointing out the error! We’ll do the necessary amendments.

      Unfortunately, there isn’t a standard benchmark for admin fees as it is a price which is negotiated between the client and the agent. Perhaps it would be good to do a comparison with other agents to get a better picture.

      Regards,
      Adam R.

  • Reply Ong September 21, 2016 at 12:05 pm

    Hi, may I know where to pay and what documents i need to submit ?

  • Reply AL October 13, 2016 at 9:37 am

    Hi, how do I know whether the Tenants have paid the Stamp Duty on the TA or not? And if the Tenants do not pay the Stamp Duty, what is the effect on the TA? Does the liability fall on the Tenants or Landlord, given that in the TA is is expressly stated that payment of Stamp Duty is the Tenant’s responsibility?

    • Reply Adam R. October 18, 2016 at 2:22 pm

      Hi AL,

      Are you utilising an agent to liaise with the tenant and additionally, does the tenant have an agent as well? If both are the case, it is advisable to let the agents handle this portion of the agreement.

      If not, the onus lies on the tenant to do the stamping. It is advisable for you to inform him to show proof in the form of a receipt once he/she does so.

      Regards,
      Adam R.

      • Reply AL October 18, 2016 at 2:28 pm

        Hi Adam,

        Thanks for your advise.

        No, we are both not using an agent so it’s a direct relationship. All other paperwork and HDB approvals have went through, but I am getting the sneaky feeling the Tenant may wish to skip the Stamp Duty part, which is why I am concerned.

        If for whatever reasons the Tenant decides not to pay the Stamp Duty, will I as the Landlord be faulted, since technically, I cannot force them to show proof if they refuse to furnish me with the receipt? Or might my best option be to absorb this as an expense lest IRAS runs after me?

  • Reply Davon Chai October 20, 2016 at 12:36 pm

    Hi AL, you must insist the tenant to show you the Stamp Certificate. There is a website for checking the authenticity of the certificate. https://estamping.iras.gov.sg/WebForms/Home.aspx
    And yes IRAS will come after you if stamp duty is not done, it has to be done within 14 days of TA signing, if not a late penalty fee will be imposed.

    Regards,
    Davon

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