When signing a tenancy agreement in Singapore, it is crucial to be aware of the Stamp Duty implications. Stamp Duty is a tax levied on legal documents, including tenancy agreements. Paying Stamp Duty is mandatory to ensure the validity and enforceability of your tenancy agreement.
Understanding Stamp Duty
Stamp Duty is a percentage of the total rent payable over the tenancy period. The current Stamp Duty rate in Singapore is 0.4% of the total rent. For example, if your monthly rent is S$2,000 and your tenancy period is 2 years, the Stamp Duty payable would be S$2,000 x 12 months x 2 years x 0.4% = S$96.
Who is Responsible for Paying Stamp Duty?
Typically, the tenant is responsible for paying the Stamp Duty. However, it is common for landlords to include the Stamp Duty payment as part of the tenancy agreement, meaning the tenant would pay the landlord an additional sum to cover the Stamp Duty.
How to Pay Stamp Duty
Stamp Duty can be paid online via the Inland Revenue Authority of Singapore (IRAS) website or at any designated SingPost branch. To pay Stamp Duty online, you will need to have a SingPass account and the Tenancy Agreement reference number.
Penalties for Late Payment of Stamp Duty
It is important to note that late payment of Stamp Duty may result in penalties. The penalty for late payment is 5% of the Stamp Duty payable, for each month or part thereof that the payment is overdue.
Additional Considerations
*_*_Tenancy Agreement Duration_
- The Stamp Duty payable is based on the total rent for the entire tenancy period.
- If the tenancy agreement is renewed or extended for a further period, additional Stamp Duty may be payable.
*_*_Exemptions_
- Rental of residential property for a period of less than 6 months is exempt from Stamp Duty.
- Rental of commercial property for a period of less than 3 months is also exempt.
*_*_Refunds_
- If the tenancy agreement is terminated early, you may be eligible for a refund of the Stamp Duty paid. To request a refund, you will need to submit an application to IRAS within 2 years of the termination date.
Conclusion
Paying Stamp Duty is an important legal obligation when entering into a tenancy agreement in Singapore. By understanding the Stamp Duty implications, you can ensure that you meet the legal requirements and avoid potential penalties. Remember to factor in the Stamp Duty payment when budgeting for your tenancy costs.
