Your rental income includes rent of the premises, maintenance, furniture and fittings. The net amount after deductions for allowable expenses (such as property tax) is taxable.
Generally, forfeiture of rental deposit is also considered as your Gross Rent. However, depending on the reason for the forfeiture of the rental deposit, IRAS may consider to exclude it as part of the Gross Rent. Therefore, please furnish the reason for the forfeiture of the rental deposit when filing your tax return.
When is rental income taxable?
Rental income is taxable when it is due and payable to the property owner, and not the date of actual receipt.
Example 1: When do you need to declare the rental income that was due from your tenant in the year 2013 but was only paid to you in the year 2014?
Your tenant rented your property from Oct to Dec 2013. He paid the rent for this period in Jan 2014, the following year.
You need to declare the rent for Oct to Dec 2013 in the Year of Assessment (YA) 2014 as the rent was due to you in 2013.
For solely owned property?
The rental income is taxed on the sole owner. It does not matter whether the sole owner or a third party receives the rent.
For jointly-owned property?
The rental income is taxed on all the joint owners based on their share in the property. It does not matter which party receives the rent or whether the owners paid for the property.
This also applies to rental loss. The rental loss is apportioned to joint owners based on their share in the property.
What are the Deductible Expenses?
Non-deductible Expenses are:
Deductible expenses are: