Singapore Expats

Hi friends - having researched this I am at a loss to explain the following. Firstly, a quick background: we are moving within the same complex to the same style of apartment; different landlord; different rent.

Our first Tenancy Agreement - and yes they are all different - said we paid $SGD x per month, the new one however states:

1) $SGD amount1 being rental in respect of the said premises and
2) $SGD amount2 being charges for the hire of the furniture and maintenance fees.

To be clear - this is solely a partially furnished place (fridge, washing machine, dryer, dishwasher, microwave).

Our PREVIOUS T/A was a simple amount. I am wondering if the L/L is up to something tricky or if anyone else has noticed some changes to T/A's?

FYI - the amount difference between amount1 and amount 2 is significant ($2300) and the total adds up to the agreed rent.

Any ideas - albeit it is our first time renewing our own rent, the company is also at a bit of a loss as to why this would be proposed.

Thankyou in advance, P

This use to be a tax dodge that Landlords would put in to the TA. I believe LL only used to have to pay tax on the property rental income, not on fixture and fittings etc.

I'm pretty sure this loophole was closed sometime ago as LL started to take the p@ss out of it?

From your POV I don't think it makes any difference. But it may make a difference to the landlords tax structure with regards to income from rental properties and whether the income is for the premises (if he is in the business of being a landlord) or furnishings which have a much shorter useful life. I haven't investigated closely but I may have to do so if I don't sell my place when I go back.

Well I don't avoid tax nor should anyone else IMHO. Would you suggest calling IRAS and explaining the situation and seeking their advice?

Cheers

sierra2469alpha wrote:Well I don't avoid tax nor should anyone else IMHO. Would you suggest calling IRAS and explaining the situation and seeking their advice?

Cheers

As the links above says

"Rent received from the letting of property in Singapore is subject to income tax, while your property is subject to property tax. Your rental income includes rent of the premises, maintenance, furniture and fittings. After deductions for allowable expenses (such as property tax), the net amount is taxable."

I'm guessing the LL doesn't realise that the loophole has been closed. I would personally get the TA changed so only reflects a single rental amount

Thanks, Saint and SMS - just out of interest

1) this is a company lease. In my meager legal opinion (a few years thereof amongst other postings!) looking through the various statutes, the same applies regardless if it is individual-to-individual.

2) what is a concern is the difference in the amounts - as mentioned, it's close on $2300 per month, so something kind of smells a little bad here.

It's interesting that the L/L is trying this on, as they want to push us into a 3+1 or 2+2 (for which we're kind of happy). Rent reviews of course at each change.

Moving every two years is a pain.

Thoughts/flames/suggestions?

As I said before, it really is of no import to you. The whole amount is considered income to you. Additionally, the whole amount received by the landlord is taxable to him as well.

It's a deduction for your company, but it's income on your personal return. Out of the pot and into the fire! If he wants to write it up that way, it's still a valid contract and has no bearing on the way you report it as it a business deduction full stop and if your company is providing it to you, it's reportable income to you on your personal return. I am assuming that your company is a Pte Ltd company.

As saint mentioned, the loophole has been closed and the landlord might not realize it. But there is nothing illegal in it at all. (odd maybe, but certainly not illegal)

Thanks fellas.

Saint wrote:I'm guessing the LL doesn't realise that the loophole has been closed. I would personally get the TA changed so only reflects a single rental amount

Exactly, and I have no doubt many are misled by their equally clueless agents into thinking they are doing something very clever indeed.

Any change is going to take forever. This country talks alot about change, they talk for years and do nothing, and suddenly, they do it all at once.

teck21 wrote:

Saint wrote:I'm guessing the LL doesn't realise that the loophole has been closed. I would personally get the TA changed so only reflects a single rental amount

Exactly, and I have no doubt many are misled by their equally clueless agents into thinking they are doing something very clever indeed.

Any change is going to take forever. This country talks alot about change, they talk for years and do nothing, and suddenly, they do it all at once.

We are currently dealing with a landlord who is apportioning the monthly rental payments into 60% rental and 40% management fee. The 40% management fee is in excess of S$4k and prima facie doesnt feel right. Any thoughts/experience on what may be driving this apportionment?

Cheers

Again, it really doesn't matter why they want to write it up that way. It's kinda like buying a toyota or a merc. Different but essentially, in the end the same. You put fuel into it and drive it. Different names but that operate exactly the same. For the renter, it's all taxable as income.