When you`re looking to rent a property in Singapore, one of the costs you`ll need to factor in is stamp duty on the tenancy agreement. Singapore`s stamp duty is a tax levied on legal documents, including tenancy agreements, and is calculated based on the rental amount and lease term. In this article, we`ll provide you with a step-by-step guide on how to calculate stamp duty for tenancy agreement in Singapore.
Step 1: Determine the rental amount and lease term
The first step in calculating stamp duty for tenancy agreement in Singapore is to determine the rental amount and lease term. The rental amount is the monthly rent that you`ll be paying for the property. The lease term is the duration of the tenancy agreement, typically one to two years.
Step 2: Use the stamp duty calculator
Once you have determined the rental amount and lease term, you can use the stamp duty calculator provided by the Inland Revenue Authority of Singapore (IRAS) to calculate the stamp duty payable. The stamp duty rates are as follows:
– For lease term of 1 year or less: 0.4% of the total rent for the entire lease period
– For lease term of more than 1 year but less than or equal to 3 years: 0.4% of the total rent for the first year + 0.6% of the total rent for the remaining lease period
– For lease term of more than 3 years: 0.4% of the total rent for the first year + 0.6% of the total rent for the second year + 1.2% of the total rent for the remaining lease period
For example, if the monthly rental amount is SGD 2,000 and the lease term is 2 years, the stamp duty payable would be calculated as follows:
– For the first year: SGD 2,000 x 12 months x 0.4% = SGD 96
– For the second year: SGD 2,000 x 12 months x 0.6% = SGD 144
– Total stamp duty payable: SGD 96 + SGD 144 = SGD 240
Step 3: Pay the stamp duty
Once you have calculated the stamp duty payable, you`ll need to pay it to the IRAS within 14 days from the date the tenancy agreement is signed. You can pay the stamp duty online using your SingPass or IRAS PIN.
In conclusion, calculating stamp duty for tenancy agreement in Singapore is a straightforward process that involves determining the rental amount and lease term, using the stamp duty calculator, and paying the stamp duty to the IRAS. By factoring in stamp duty into your rental budget, you`ll ensure a smooth and hassle-free tenancy experience.