Renting in Singapore: Everything you need to know about Stamp Duty
You've signed the Tenancy Agreement, and you’ve paid the first month rent and security deposit. Before you move into your new home, there’s one more thing to take care of - stamp duty.
What is stamp duty?
Stamp duty is a tax payable to the Inland Revenue Authority of Singapore (IRAS) by the tenant upon signing the Tenancy Agreement. It should be paid when the tenant rents the whole house or part of a house (eg. a room) or when the landlord renews or extends the lease.
The Tenancy Agreement is recognised by the authorities and has legal binding power only when all relevant stamps and seals are in place and with the stamp duty duly paid.
Who pays for the stamp duty?
After signing the Tenancy Agreement, the tenant is responsible for paying the stamp duty for the agreement to be binding and effective.
How much is it?
For a lease of not more than 4 years, the stamp duty is 0.4% of the total rent for the lease period. Here’s an example of a 24-month (2 years) lease with a monthly rent of S$2500:
Total monthly rent: S$2500/month Lease period: 24 months Total rent over 24 months: S$2500 x 24 = S$60,000 Stamp duty payable by tenant: S$60,000 x 0.4% = S$240
How soon should the stamp duty be paid?
A Tenancy Agreement should be duly stamped and stamp duty paid before the tenant and landlord sign it. However, that almost never happens in practice. So, a Tenancy Agreement can still be stamped without any penalty if:
- the stamp duty is paid within 14 days when the Tenancy Agreement is signed in Singapore
- the stamp duty is paid within 30 days upon receiving the Tenancy Agreement if it’s signed overseas
Where can tenants pay stamp duty and get their tenancy agreement stamped?
Technology has made everything a breeze nowadays. The tenant can e-stamp his Tenancy Agreement online here. Alternatively you can personally go any of these locations listed by the IRAS:
Novena Post Office 55 Newton Road Revenue House Singapore 307987 Operating Hours: Weekdays - 8.30am to 5.30pm Saturdays - 8.30am to 1.00pm Raffles Place Post Office 10 Collyer Quay #B1-11 Ocean Financial Centre Singapore 049315 Operating Hours: Weekdays - 8.30am to 6.00pm Robinson Road Post Office 79 Robinson Road #01-06 CPF Building Singapore 068897 Operating Hours: Weekdays - 8.30am to 6.00pm Saturdays - 8.30am to 1.00pm Chinatown Post Office 101 Upper Cross Street #B1-17A People's Park Centre Singapore 058357 Operating Hours: Weekdays - 9.30am to 6.00pm Saturdays - 9.30am to 2.00pm IRAS Surf Centre 55 Newton Road Revenue House First level, Taxpayers Services Centre Singapore 307987 Operating Hours: Weekdays - 8.0am to 5.00pm Saturdays - 8.00am to 1.00pm
What if the tenant fails to pay the stamp duty?
If that happens, the Tenancy Agreement between the tenant and the landlord will be invalid and not recognised. Should a dispute arise, the tenant may also have no legal recourse.
Action can be taken by the landlord or the authorities against a tenant who doesn’t pay the stamp duty on time or ignore paying it.Late payment penalty (within 3 months)
If the tenant is late in paying the stamp duty within 3 months, he’ll have to pay a $10 penalty or an amount equivalent to the stamp duty payable (whichever is greater).Late payment penalty (exceeding 3 months)
If the tenant is late in paying the stamp duty for longer than 3 months, he’ll be obliged to pay a $25 penalty or an amount 4 times the stamp duty payable (whichever is greater).
Not paying the stamp duty is equivalent to tax evasion.
Tax evasion is illegal. The IRAS may start to probe into the tenant’s personal tax status and impose a fine of up to S$5000 (plus an interest defined by IRAS).
The landlord will not have it easy either. Since the Tenancy Agreement is not recognised by the authorities, he could be charged for illegally renting out his house. So the consequences of not paying the stamp duty could be dire for both the tenant and the landlord.
If you’re a landlord and want to confirm whether your tenant has paid the stamp duty, obtained the document and stamp certificate reference number, simply check online at the IRAS.
Renting can be a complicated process for both tenants and landlords. It's not easy to keep track of all the processes and rules revolving around the residential rental process.
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