Paper 2 · Taxes & Leasing
Property Tax, GST & Tenancy Stamp Duty in Singapore
Must-know for the exam
- Property tax is charged on the Annual Value (AV), IRAS's estimate of the gross annual rent the property could fetch, not on its price or the rent actually received.
- Owner-occupied homes pay progressive rates of 0% to 32% of AV (effective 1 Jan 2025, IRAS), with the first $12,000 of AV at 0%.
- Non-owner-occupied homes, whether rented out or vacant, pay higher progressive rates of 12% to 36% of AV (effective 1 Jan 2024, IRAS), starting at 12% on the first $30,000.
- Commercial and industrial property pays a flat 10% of AV whether occupied, vacant or let, and owner-occupier rates are granted on one property only.
- Income tax is charged separately on the net rent (gross rent less allowable expenses) as passive income under section 10(1)(f) of the Income Tax Act, on top of property tax.
- Only the interest on the housing loan is deductible from rent, never the principal; property tax for the rental period, fire insurance premiums and MCST charges are allowable too.
- From YA 2022 the commission, advertising, legal fees and stamp duty of securing a tenant are deductible for the
Beyond the one-off stamp duties on a purchase, the exam covers the recurring tax on owning property and the duty on leasing it.
Property tax — based on Annual Value
Property tax is charged on the Annual Value (AV) — IRAS's estimate of the property's gross annual rent if let out. The rate depends on how the property is used:
| Property use | Property-tax rate |
|---|---|
| Residential, owner-occupied | Lower progressive rates — 0% → 32% of AV |
| Residential, not owner-occupied (rented/vacant) | Higher progressive rates — 12% → 36% of AV |
| Commercial / industrial | Flat 10% of AV |
| Portion of Annual Value | Rate |
|---|---|
| First $12,000 | 0% |
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Practise exam-style questions on Taxes & Leasing — with instant answers and explanations.
Practise Taxes & Leasing questions →Exam-style questions on this topic
- RES exam question on Taxes & Duties: Annual property tax is assessed on a residential property based on its Annual Value (AV)
- RES exam question on Taxes & Duties: Seller's Stamp Duty in Singapore
- RES exam question on Taxes & Duties: total BSD payable
- RES exam question on Taxes & Duties: A Singapore Citizen buying his second condominium takes a $1,200,000 bank loan secured…
- RES exam question on Taxes & Duties: Lisa, a Singapore Citizen (SC), purchases her first residential property
Common questions
- Is GST charged on residential property in Singapore?
- No. GST applies to commercial property (when the seller is GST-registered), but the sale and lease of residential property is exempt from GST.
- Who pays tenancy stamp duty?
- Tenancy stamp duty on a lease is usually paid by the tenant and is computed based on the rent payable over the term of the tenancy.
- Which rental expenses can a landlord deduct from rental income?
- Only expenses incurred to produce the rental income — the revenue side, not the capital side. Allowable: mortgage interest (never the principal), property tax for the rental period, fire-insurance premiums, repairs that restore the property to its original state, maintenance and MCST charges, replacing furnishings, and the commission, advertising, legal fees and stamp duty of securing a tenant (from YA 2022 this covers the first tenant as well as later ones). Not allowable: loan principal, initial repairs, renovation, additions and alterations, new or improved furnishings, depreciation, and any cost reimbursed by the tenant. Confirm the current list with IRAS.
- What is the 15% deemed rental expenses option?
- Since YA 2016 an individual letting a residential property in Singapore may claim deemed rental expenses of 15% of the gross rent instead of adding up the actual expenses — and may still claim mortgage interest on top of the 15%. It must be applied consistently across all their tenanted residential properties in the same Year of Assessment, is not available for non-residential property, and cannot be used where no deductible expense was incurred apart from interest, or where the rent was derived through a partnership or from a property held under a trust. Co-owners of the same property may each choose differently. Confirm the current position with IRAS.
- What is the difference between property tax and income tax on a rented-out property?
- Property tax is a tax on ownership, charged on the property's Annual Value whether it is owner-occupied, rented out or vacant. Income tax is a tax on the rent earned, charged on the net rental income after allowable expenses. Both can be payable on the same property in the same year, and the property tax paid for the rental period is itself one of the expenses deductible against the rental income.
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Join @resprepsg →Study material aligned to the public CEA syllabus. Not financial or legal advice — verify current figures with the relevant authority (IRAS, HDB, CEA, MAS).