Stamp Duty on Rental Renewals: Your Complete Cost Breakdown
Stamp duty on rental renewals in Singapore is calculated at 0.4% of the total rent for leases of 4 years or less, applying to both tenants and landlords under the Stamp Duties Act. This cost arises whenever a lease is renewed or extended with a new agreement, especially if there's a rent adjustment or increase rent renewal. Homejourney provides this transparent breakdown to help you navigate renewals safely, ensuring you avoid penalties while prioritizing trust and verification in every property decision.
Rental renewals often involve negotiating a market rate rent, but overlooking stamp duty can lead to unexpected costs or legal issues. Unlike initial leases, renewals may require a new tenancy agreement, triggering fresh stamp duty payments within 14 days via IRAS e-Stamping. This cluster article dives deep into costs, with actionable steps for tenants and landlords.
How Stamp Duty Applies to Rental Renewals
Under IRAS rules, stamp duty is mandatory for tenancy agreements of 1 year or more. For renewals treated as new leases—common when you raise rent or update terms—duty is 0.4% of the total rent for the lease period (up to 4 years).[3][4] If no new document is signed and it's a simple extension without rent change, no additional duty may apply, but always check with IRAS to avoid fines up to 250% of unpaid duty.[3]
For HDB flats, subletting renewals follow the same rules but require HDB approval first. Private properties have no rent control, so rental increase negotiations drive costs. Homejourney verifies market data to help you compare fairly—explore rentals at Homejourney's property search before renewing.
Key Differences: Renewal vs. New Lease
- New Lease: Full stamp duty on entire period from start.
- Renewal/Extension: Duty only on increased rent or extended period if documented.[3]
- No Change: Simple rollover often duty-free, but get it in writing.
Insider tip: In high-demand areas like Tanjong Pagar or Orchard, landlords push 5-10% rent adjustment on renewal—factor in duty before agreeing.
Step-by-Step Stamp Duty Calculation for Renewals
Calculate using IRAS formula: For leases ≤4 years, 0.4% of total rent (monthly rent × months), rounded down to nearest dollar (min $1).[3][4] Includes service charges but excludes GST. Average Annual Rent (AAR) applies for >4 years: 0.4% of 4×AAR.
- Determine Total Rent: e.g., $3,500/month × 24 months = $84,000.
- Apply Rate: 0.4% × $84,000 = $336.
- Pay Within 14 Days: Use IRAS portal; tenant or landlord can pay, but lease specifies.
- Staggered Rent: Sum all periods (e.g., Year 1: $3,500; Year 2: $3,850 post-increase).[3]
Example 1 (No Rent Increase): Renewing 1-year lease at $4,000/month. Total: $48,000. Duty: $192. If same terms, consider addendum to skip new duty.[2]
Example 2 (With Rent Increase): 2-year renewal, Year 1: $4,000/month ($48,000); Year 2: $4,400/month ($52,800). Total: $100,800. Duty: 0.4% = $403.20 → $403. This highlights why tracking market rate rent matters—use Homejourney for comps.
Cost Impact of Rent Increases on Renewals
A rental increase amplifies stamp duty proportionally. In 2025, average Singapore rents rose 8.1% YoY in prime areas, per URA data—e.g., a $5,000/month condo renewal to $5,400/month (8% hike) over 24 months costs $518.40 duty vs. $480 without hike.[1] Landlords: Declare rental income to IRAS; tenants: Negotiate caps.
Table: Sample Renewal Costs (2-Year Lease)
For financing impacts, check Homejourney bank rates. Related: Read How to Increase Rent on Tenancy Renewal: Singapore Guide | Homejourney ">How to Increase Rent on Tenancy Renewal.[2]
Practical Tips for Tenants & Landlords
- Tenants: Start renewal talks 2-3 months early. Compare via Homejourney search; reject hikes >10% without market proof. Insist on addendum for no-duty extensions.
- Landlords: Benchmark against URA indices. Offer 3-7% rent adjustment to retain good tenants—eviction costs more. Connect with agents at Homejourney agents.
- Both: Use stamped originals for Small Claims Tribunal if disputes arise (up to $20k).
Homejourney prioritizes your safety—our verified listings ensure transparent renewals. For HDB specifics, see HDB Rent Adjustment Rules: Renewal Guide for Landlords | Homejourney ">HDB Rent Adjustment Rules.
When to Expect Extra Costs or Exemptions
No duty if AAR ≤$1,000 or short-term (<1 year).[4] Penalties for late stamping: 2%/month up to 250%. Renewals with rent-free periods prorate duty only on paid months.[3] Disclaimer: This is general info; consult IRAS or lawyer for your case—Homejourney connects you to pros.
FAQ: Stamp Duty on Rental Renewals
Q: Who pays stamp duty on renewal?
A: Typically the tenant, but negotiable in the agreement. Pay jointly via IRAS to share costs safely.[3]
Q: Does stamp duty apply if rent stays the same?
A: Not if using a simple extension addendum without new lease. New agreements trigger it regardless.[2][3]
Q: How much for a $4,500/month 24-month renewal with 5% hike?
A: New rent $4,725/month ×24 = $113,400. Duty: $453.60 → $453.[1]
Q: What's the deadline and penalty?
A: 14 days from signing; late fees start at $10/day, up to 250%.[4]
Q: HDB vs Private Property differences?
A: Same rates, but HDB needs board approval first. Check Projects Directory ">Homejourney projects for details.
Mastering Stamp Duty on Rental Renewals: Complete Cost Breakdown empowers confident decisions. Visit Homejourney's pillar on Lease Renewal Guide for full coverage, search rentals at https://www.homejourney.sg/search?status=For+Rent, and connect with trusted agents today.
