What Is It?
Stamp duty on rental units are taxes on tenancy agreement documents. Tenants are required to pay this tax as long as they are renting, whether it’s a room or an entire unit. This stamp duty for rental property is paid to the Inland Revenue Authority of Singapore (IRAS).
The tenancy agreement will only come into effect once the stamp duty has been paid and all the relevant stamps and seals are in place. The stamp duty on rental units also applies to extension of lease or renewal of the tenancy agreement.
Stamp Duty for Rental Units in Singapore: Who Pays for It?
The stamp duty on rental units is usually paid for by the tenant. There are however cases where it is negotiated that the landlord will bear the cost. To avoid dispute, tenants should always state the payee of the stamp duty in the tenancy agreement.
In case of a dispute and the tenancy agreement does not state who is responsible for the payment, IRAS will follow that which is specified in the Third Schedule of the Stamp Duties Act. Tenants who are unfamiliar with this process can get a property agent to assist them.
How Much Stamp Duty Are You Supposed to Pay?
The stamp duty amount is computed based on the total monthly rental amount and the duration of the rental. The monthly rates are determined by either the market rental rate or the declared rental, whichever is higher.
When Should You Pay the Rental Stamp Duty?
The standard practice is for the tenancy agreement to be stamped and the stamp duty for rental property to be paid before the landlord and the tenant signs the document. This is however a grey area, and usually no penalty will be levied if the stamp duty is paid within 14 days of the tenancy agreement being signed in Singapore, and 30 days if it is being signed overseas.
Stamp Duty Singapore Rental: Steps to Paying Stamp Duty Online
1. Login in via Singpass on the IRAS e-Stamping portal
2. Select ‘Payments and Transactions’
3. Enter your Search criteria
4. Make the payment
5. Retrieve the payment slip
6. Retrieve your stamp certificate after successful payment
What Are the Documents Needed to Pay the Stamp Duty?
1. Your Singpass login and password
2. Tenancy agreement document’s details (eg. reference number)
3. Identity details of contractual individuals (tenant and landlord)
Tenancy Agreement: Where Else Can You Get It Stamped?
The easiest and fastest way is to e-stamp your tenancy agreement online on the IRAS website. Alternatively, you can visit these four Service Bureaus at SingPost. However, you’ll need to fill in the requisition form and there will also be a service fee. Alternatively, you can visit any of the locations listed below and get it done manually.
Stamp Duty Singapore Rental: Where Do You Pay Stamp Duty?
Stamp duties can be done via FAST (for DBS/ POSB Accounts), AXS Kiosk machines, eNETS, bank transfer, GIRO, cashier cheque, and more. But the amount must be paid in full as there are no instalments. With the COVID-19 pandemic raging on (thanks Omicron), it might be a good idea to minimise in-person contact and do your payment via online methods.
Stamp Duty for Rental Property Payment Options
1. FAST via DBS/ POSB Account
2. AXS Kiosk (Nets Only)
3. AXS Mobile and AXS Website
5. Internet Banking Fund Transfer
6. Cheque / Cashier’s Order
8. Conveyancing Account
10. CPF (Handled by Law Firms)
Penalties for Failing to Pay the Stamp Duty for Rental Property
Neglecting or ignoring paying your stamp duty renders your tenancy agreement invalid. Should there be any conflict between the landlord and the tenant, they will have no legally binding agreement to govern their dispute. Aside from that, not paying stamp duty on your tenancy agreement is also equivalent to tax evasion and the authorities can take action against you.
Late Payment Penalty Within Three Months
For late payments within three months, there will be a $10 penalty, or an amount equivalent to the stamp duty, whichever is greater.
Late Payment Penalty Exceeding Three Months
After three months, the penalty amount will increase to $25 or four times the amount of the stamp duty, whichever is greater.
As neglecting to pay your stamp duty for rental property is equivalent to tax evasion, tenants can expect the IRAS to start probing into their personal tax status if they evade payment for too long. Thereafter, the IRAS has the right to impose a fine of up to $5,000 plus interest based on IRAS’s own discretion. The consequences can be directed at both tenant and Landlord, so it’s better to just pay up.
Ideally, the tenant should send a receipt of the stamp duty payment to their Landlord. But in cases where this doesn’t happen, Landlords who are unsure of whether their tenant has paid the stamp duty can log on to the IRAS website to check. All they will need is the stamp certificate reference number from the document.
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