How to Calculate Rental Stamp Duty: Step-by-Step Examples
Rental stamp duty in Singapore, also known as tenancy stamp duty or lease stamp duty, is a tax payable on tenancy agreements for leases of one year or more. It is calculated at 0.4% of the total rent or a multiple of the average annual rent (AAR), depending on the lease period.[1]
At Homejourney, we prioritize user safety and trust by providing verified information on stamp duty rental calculations to help tenants and landlords avoid penalties. This cluster article offers actionable steps and real Singapore examples, linking back to our comprehensive Stamp Duty for Rental Agreements in Singapore: Homejourney Guide Stamp Duty for Rental Agreements in Singapore: Homejourney Guide for full pillar coverage.
Why Rental Stamp Duty Matters for Tenants and Landlords
Under Singapore's Stamp Duties Act, tenants must pay and stamp the tenancy agreement with IRAS within 14 days of signing to make it legally enforceable. Failure to do so can result in fines up to $5,000 or 250% of the unpaid duty.[1]
For landlords, ensuring proper stamping protects against disputes, especially in HDB subletting where additional HDB approval is needed—see our guide on HDB Subletting: LOI to Approval Process Guide HDB Subletting: LOI to Approval Process Guide | Homejourney . Homejourney verifies rental listings to create a safe environment for transactions.
Rental Stamp Duty Rates in Singapore (2026)
Leases under 1 year are exempt. For longer terms:
- AAR ≤ $1,000: Exempted.[1]
- AAR > $1,000:
Duty is rounded down to the nearest dollar, minimum $1. Use IRAS e-Stamping portal for payment.[1]
Step-by-Step Guide: How to Calculate Rental Stamp Duty
Follow these steps for accurate rental tax computation:
- Determine Average Annual Rent (AAR): AAR = Total rent for lease period ÷ Number of years (ignore partial years).[1]
- Identify lease period: Count from start to end date, excluding options to renew unless exercised.[1]
- Calculate total rent: Include fixed rent, service charges if part of agreement, and estimated additional rent (e.g., % of GTO for commercial).[1]
- Apply rate: 0.4% of total rent (≤4 years) or 4×AAR (>4 years).[1]
- Round down: To nearest $1, min $1.[1]
- Stamp via IRAS: Upload agreement online within 14 days.
Landlords should declare rental income to IRAS; check bank rates for investment yields Bank Rates .
Step 1: Simple Fixed Rent Example (Tampines HDB, 2-Year Lease)
A tenant rents a 3-room HDB flat in Tampines (near MRT Exit A, 5-min walk) at $3,000/month for 24 months.
Stamp duty payable: $288. Insider tip: HDB sublets require board approval first—budget extra time.[1]
Step 2: Staggered Rent Example (Orchard Condo, 3-Year Lease)
Orchard condo (3-min walk from Orchard MRT Exit B), rent escalates: Year 1 $5,000/m, Year 2 $5,500/m, Year 3 $6,000/m (36 months total).
| Period | Monthly Rent | Total |
|---|---|---|
| Year 1 (12m) | $5,000 | $60,000 |
| Year 2 (12m) | $5,500 | $66,000 |
| Year 3 (12m) | $6,000 | $72,000 |
| Total Rent | - | $198,000 |
Duty: 0.4% × $198,000 = $792.[1] AAR = $198,000 ÷ 3 = $66,000 (for reference).
Step 3: Long-Term Lease >4 Years (Private Shophouse, Indefinite)
Bukit Timah shophouse at $10,000/month AAR, indefinite term.
Stamp duty: $1,920. Note: Indefinite leases cap at 4×AAR regardless of actual term.[1]
Step 4: Rent-Free Period & Variation (Extension Example)
Original 1-year lease $10,000/m with 3-month rent-free: Total rent $10,000 × 9 = $90,000. Duty: 0.4% × $120,000 equivalent (adjusted) = $480.[1]
Extension by 6 months at same rent: Additional duty on $18,000 = $72.[1] Variations without rent increase: No extra duty.[1]
Step 5: Commercial with GTO % (Retail Unit)
Fixed $5,000/m + 0.5% of $100,000 monthly GTO ($500) + $500 charges, 36 months.
For minimum/maximum secured sums, take the higher/lower as applicable.[1]
Common Pitfalls and Insider Tips
- Exclude options: Unexercised renewal options don't count in period.[1]
- HDB specifics: Minimum 6-month sublet; get HDB LOI first.[1]
- Expats: Include diplomatic clauses—see our guide Diplomatic Clause Explained: Expats Exit Leases Early in Singapore | Homejourney .
- Disputes: Use Small Claims Tribunal (up to $20,000); mediate first at Community Mediation Centre.
- Tip: Inventory checklists prevent wear/tear issues Furniture Inventory Checklists for Singapore Rentals: Tenant Protection Guide .
Disclaimer: This is general guidance; consult professionals for advice. Homejourney connects you with verified agents at https://www.homejourney.sg/agents.
FAQ: Rental Stamp Duty in Singapore
1. Who pays rental stamp duty?
Tenant pays, but negotiate in agreement. Mandatory for enforceability.[1]
2. Is stamp duty needed for leases under 1 year?
No, exempt. Verbal agreements suffice but risky—use written.[1]
3. What if rent increases mid-lease?
Supplemental agreement stamped on increase only.[1]
4. HDB rental stamp duty differences?
Same rates, but HDB approval required. Check HDB guide.[1]
5. How to pay IRAS stamp duty?
e-Stamping portal; within 14 days. Late: Penalty 10% + interest.[1]
Master how to calculate rental stamp duty: step-by-step examples with Homejourney for confident decisions. Search verified rentals at https://www.homejourney.sg/search?status=For+Rent and explore furnished vs unfurnished options Furnished vs Unfurnished Rental Singapore: Homejourney Complete Comparison . Trust Homejourney for safe, transparent property journeys.
