Foreigners who bought and own properties in Singapore may earn income from renting or selling their properties. As such, they need to be aware of property-related income taxes for foreigners with property in Singapore.
Rental Income From Properties
As a foreigner, you are liable to pay income tax on the rental income earned from the renting of your properties. Rental income refers to the full amount received by you for the renting of the premise, furniture, and maintenance of the property.
The gross rental income less any allowable expenses are taxable.
Foreigners who are tax residents of Singapore are taxed at resident rates. Net rental income earned by foreigners who are non-residents of Singapore is taxed at the prevailing non-resident rate of 22%. (20% prior to Year of Assessment 2017).
Capital Gains From The Sale Of Properties
The gains from the sale of properties are generally not taxable as there is no capital gain tax in Singapore.
However, such gains may be taxable if the individual is deemed to be trading in properties. There are no definite guidelines in determining what is considered trading in properties and will be assessed on a case by case basis. Some criteria used to assess if you are trading in properties is as follows:
- Frequency of transactions (buying and selling of properties)
- Reasons for buying and selling of property
- Financial means to hold the property for long term
- Holding period
You are to declare taxable gains from the sale of your properties under ‘Other Income’ when filing your tax returns. Do contact the Inland Revenue Authority Of Singapore if you are unsure of your liability to pay tax in this instance.