If you rent out a residential property in Singapore and qualify for the deemed rental expense deduction, compare 15% of gross rent with your actual allowable non-interest expenses. IRAS allows eligible owners to claim allowable mortgage interest in addition to the deemed amount. The mortgage principal belongs outside that calculation.
Start with the gross rental income for the relevant period, then check which expenses qualify and which method applies to your circumstances. Keep the supporting mortgage records if you claim interest under the deemed method. Read IRAS’s guidance on rental income and expenses.
- Write down gross rental income before deductions.
- List the actual expenses and identify the allowable items.
- Separate mortgage interest from principal.
- Compare the two methods using the same period and retain the required records.
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Compare both methods on the same figures
Suppose gross residential rent is $30,000, allowable mortgage interest is $5,200 and other allowable actual expenses are $3,600. In this example, 15% of gross rent is $4,500. These figures are illustrative and assume the owner qualifies for the deemed deduction.
| Calculation | Deemed expenses | Actual expenses |
|---|---|---|
| Gross rent | $30,000 | $30,000 |
| Allowable mortgage interest | $5,200 | $5,200 |
| Other expense deduction | $4,500 | $3,600 |
| Net rent after these deductions | $20,300 | $21,200 |
The $900 difference in this example is a difference in net rental income. The amount of income tax ultimately due depends on the owner’s tax assessment. If actual allowable non-interest expenses are higher than the deemed figure, the comparison can go the other way.
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Check the records before filing
Review the tenancy agreement, rent records and the lender’s statement showing interest. IRAS says to keep supporting mortgage interest records for at least five years when claiming deemed expenses plus interest. For the actual expense method, retain supporting records such as invoices and statements for at least five years. Check the treatment of unusual expenses and any restrictions if you let more than one property. Read IRAS’s detailed guide to claiming rental expenses.
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Frequently asked questions
Can I deduct actual repairs on top of the 15%?
The deemed deduction replaces the actual expense claim for those ordinary expenses. Allowable mortgage interest is treated separately.
Is the 15% figure the tax rate?
It is a way to estimate deductible rental expenses for eligible properties. Use the resulting net rental income when completing the relevant tax return.