For newcomers to Singapore, the various costs associated with renting, such as rent, security deposit, earnest money, and agent fees, can already be quite bewildering. On top of all this, after signing the contract, the real estate agent also collects a stamp duty from the tenant. Is the agent trying to profit from this?
Actually, this stamp duty is not for the real estate agent. Strictly speaking, it’s a complimentary service that the agent provides for the tenant. Most real estate agencies on the market today do not charge for these services, only collecting the amount of the stamp duty itself.
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What is Stamp Duty?
When you rent or buy a property in Singapore, the contract between the buyer and seller or the landlord and tenant must be legalized, meaning it can serve as legal evidence in court. The stamp duty for rentals is a tax levied on the tenancy agreement. As long as a tenant is renting a property, whether it’s a single room or an entire unit, this tax must be paid.
Rental stamp duty is paid to the Inland Revenue Authority of Singapore (IRAS).
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Why is it Necessary to Pay Stamp Duty?
In simple terms, “stamp duty” is a form of “inexpensive insurance” provided by the government for property buyers/renters. It is essentially a processing fee for stamping by the government, which signifies that the government acknowledges the existence and legality of the written contract and will record it. Therefore, whether you are buying a new home, a resale property, or renting, stamp duty is applicable as long as a written contract is signed.
⚠️Note, Stamp Duty ≠ Property Tax.
Without paying stamp duty, if any disputes arise and go to court, the contract will not be recognized by the court. In other words, the contract is as good as a piece of waste paper. After the tenant pays the stamp duty, the tenancy agreement is recognized by the government, thus protecting the tenant’s legal rights. If the landlord breaches the contract, the tenant, being the weaker party, can rely on the contract for support. If necessary, the tenant can even sue the landlord for compensation based on the contract, which will serve as legal evidence in court. Once the stamp duty is paid and the contract is effective, there is no need to hire a lawyer for notarization (which can cost nearly S$200). You can go directly to the Small Claims Tribunals for arbitration with the contract.
For some unfair clauses, for example, if a table that has been used for decades gets scratched and the landlord demands S$1,000 in compensation, this completely unreasonable amount can be settled at the Small Claims Tribunals by just paying for the depreciated value. In the worst-case scenario, you might only have to pay half. Otherwise, if you go to court and the landlord hires a lawyer to sue the tenant, and the tenant doesn’t want to hire a lawyer, they would have to bear the S$1,000 loss. There have been cases where landlords claimed S$10,000 from tenants for various reasons after the lease expired. Even if the tenant hires a lawyer and wins the case, they still have to pay several thousand dollars in legal fees.
Similarly, as the other party to the tenancy agreement, the landlord will also require the tenant to pay stamp duty to ensure the signed lease is legally effective. Otherwise, if the tenant breaks the contract, the landlord cannot legally pursue rent arrears.
So, don’t think that not paying stamp duty is saving money!
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Singapore Rental Stamp Duty Information at a Glance:
During the pandemic, rental demand surged, and rental prices soared, with condo and HDB flat rents increasing by over 10% in 2021. If you are considering renting, you need to know more about rental stamp duty and the amount you will have to pay for your rental unit.
| Who pays the stamp duty? | Usually paid by the tenant. |
| How is stamp duty calculated? | 0.4% of the total rent. |
| When is stamp duty paid? | Within 14 days of signing the contract. |
| How to pay stamp duty? | FAST (DBS/POSB accounts), AXS kiosks, eNETS, bank transfer, GIRO, cashier’s cheque, etc. |
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Who Pays for the Rental Stamp Duty in Singapore?
Rental stamp duty is usually paid by the tenant. In some cases, the landlord may agree to bear the cost through negotiation. To avoid disputes, tenants should ensure that the tenancy agreement specifies who is responsible for paying the stamp duty. Tenants unfamiliar with this process can ask their real estate agent for assistance.
How Much Stamp Duty Should You Pay?
The amount of stamp duty is calculated based on the total monthly rent and the lease term.
| Average Annual Rent (AAR)* | Stamp Duty Amount |
| AAR not exceeding S$1,000 | No stamp duty payable |
| AAR exceeding S$1,000 | |
| Lease period of four years or less | 0.4% of the total rent for the lease period |
| Lease period of more than four years or for an indefinite term | 0.4% of four times the AAR for the lease period |
*AAR refers to the average annual contractual rent or market rent, whichever is higher, and includes other fees such as:
- Advertising and promotion fees
- Furniture/fittings fees
- Maintenance fees
- Service fees
- Any other charges, excluding Goods and Services Tax (GST) charges.
For example:
| Lease Term & Rent | Rental Stamp Duty |
| 3-month lease
First month: S$3,000 Second month: S$3,000 Third month: S$4,000 |
Total rent:
S$3,000 + S$3,000 + S$4,000 = S$10,000
Stamp Duty: 0.4% x S$10,000 = S$40.00 |
| 4-year lease
First year: S$3,500 per month Second year: S$4,000 per month Third year: S$4,300 per month Fourth year: S$5,300 per month |
Total rent:
(S$3,500 + S$4,000 + S$4,300 + S$5,300) x 12 = S$205,200
Stamp Duty: 0.4% x S$205,200 = S$820.80 S$820.00 (rounded down, minimum S$1) |
| 5-year lease
First year: S$1,800 per month Second year: S$2,000 per month Third year: S$2,500 per month Fourth year: S$3,000 per month Fifth year: S$3,300 per month |
Total rent:
(S$1,800 + S$2,000 + S$2,500 + S$3,000 + S$3,300) x 12 = S$151,200
Average Annual Rent (AAR): S$151,200 / 5 years = S$30,240
4 times AAR: = S$30,240 x 4 = S$120,960
Stamp Duty: 0.4% x S$120,960 = S$483.84 S$483.00 (rounded down, minimum S$1) |
When is Stamp Duty Payable?
Stamp duty is paid each time a contract is signed or renewed, not annually. A lease extension or renewal of a tenancy agreement also requires payment of rental stamp duty. As long as a contract is signed for renting a property, rental stamp duty is payable, just like with a new lease.
If the tenancy ends prematurely, can the stamp duty for the remaining lease period be refunded?
Since the tenancy agreement has already been executed, there will be no refund for the remaining period. However, if the lease is terminated without ever being executed, you may be eligible for a refund.
Deadline for Paying Stamp Duty
The landlord and tenant need to pay the stamp duty within 14 days of signing the contract, which is why real estate agents usually collect the stamp duty amount from you at the time of signing. If you are overseas when signing the contract, you have 30 days to pay.
Consequences of Not Paying Stamp Duty
Ignoring or refusing to pay stamp duty will invalidate your tenancy agreement. If any conflict arises between the landlord and tenant, there will be no legally binding agreement to resolve the dispute. Furthermore, refusing to pay stamp duty for a tenancy agreement is equivalent to tax evasion, and IRAS will take action.
What if I miss the deadline for paying stamp duty?
If you forget or miss the deadline, don’t worry. You can still make the payment, but there will be a penalty! For late payments within 3 months, a penalty of S$10 or an amount equal to the stamp duty, whichever is higher, will be imposed. For late payments exceeding 3 months, the penalty increases to S$25 or 4 times the amount of the stamp duty, whichever is higher.
How do I know if my tenant has paid the stamp duty?
Ideally, the tenant should send a copy of the stamp duty receipt to the landlord. If the landlord is unsure whether their tenant has paid the stamp duty, they can check on the IRAS website by providing the reference number from the Stamp Certificate.
Tenancy Agreement: How to Get it Stamped?
The easiest and fastest way is to get it stamped online at the IRAS website (e-Stamping Portal). The steps are as follows:
- Log in using your SingPass or CorpPass ID
- Select “Stamping”
- Choose the appropriate document from the following:
- “Lease/Tenancy Agreement”
- “Variation of Lease”
- “Surrender of Lease”
- “Lease renewal/transfer between tenants”
- “Lease transfer between landlords”
You can also choose to get it stamped offline by visiting one of the four SingPost service counters.
| Service Point | Address | Operating Hours |
| Novena Post Office | Revenue House 55 Newton Road #01-02 Singapore 307987 | Mon to Fri: 8:30am – 5:30pm
Sat: 8:30am – 1:00pm |
| Raffles Place Post Office | Ocean Financial Centre 10 Collyer Quay #B1-11 Singapore 049315 | Mon to Fri: 8:30am – 6:00pm |
| Shenton Way Post Office | Downtown Gallery 6A Shenton Way #03-23 Singapore 068815 | Mon to Fri: 8:30am – 6:00pm |
| Chinatown Post Office | People’s Park Centre 101 Upper Cross Street#B1-17A Singapore 058357 | Mon to Fri: 9:30am – 6:00pm
Sat: 9:30am – 2:00pm |
How to Pay Stamp Duty Yourself?
If you still don’t trust your agent and are worried they might misappropriate the money without paying the stamp duty for you, what can you do?
It’s simple, you can go to the IRAS website yourself and pay the stamp duty. Stamp duty can be paid via FAST (DBS/POSB accounts), AXS machines, eNETS, bank transfer, GIRO, cashier’s cheque, etc. However, the stamp duty amount must be paid in full and cannot be paid in installments.
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