Stamp Duty on leases is payable based on the contractual rental or the market rental, whichever is higher, at the Lease Duty rates. Stamp duty is payable on documents relating to leases of immovable properties in Singapore such as : Lease or tenancy agreement
Lease with Fixed Rent
Lease with Premium
Lease with Variable Rent
A lease with variable rental is one for which the rental varies during the lease period.
e.g.
- Staggered rental for different periods of the lease
- There is a fixed rental component and an additional rental component based on a percentage of the gross sales turnover [GTO]
In a lease involving an additional rental component based on a percentage of the GTO, you are to estimate the GTO and determine the additional rent payable. This additional rent shall be included for the stamp duty calculation i.e. the rent that is subject to stamp duty is the sum of the fixed rental [if any] and the additional rental derived from the estimated GTO.
Where the additional rental component is subject to a maximum or minimum secured sum, the additional rent that is subject to stamp duty shall be:
Based on a percentage of GTO, subject to a maximum secured sum | The maximum secured sum |
Based on a percentage of GTO, subject to a minimum secured sum | The higher of the amount derived from the estimated GTO or the minimum secured sum |
Additional rent subject to stamp duty
Please refer to Examples 1 to 3 below on the calculation of stamp duty for leases involving staggered rental or a percentage of GTO.
Surrender of Lease
Rates and Computation
AAR does not exceed $1,000 | Exempted |
AAR exceeds $1,000 | |
Lease period of 4 years or less | 0.4% of total rent for the period of the lease |
Lease period of more than 4 years or for any indefinite term | 0.4% of 4 times the AAR for the period of the lease |
Lease duty is rounded down to the nearest dollar, subject to a minimum duty of $1.
1AAR refers to the higher of the average annual contractual or annualised market rent and includes other considerations such as payments for:
- Advertising and Promotion charge
- Furniture / Fittings charge
- Maintenance charge
- Service charge
- Any other charges, excluding GST charges
Example 1: Lease with Staggered Rent [4 Years or Less]
3-month Lease | Total Rent Lease Duty |
4-year Lease | Total Rent Lease Duty |
Example 2: Lease with Staggered Rent [More than 4 Years]
5-year Lease | Total Rent Average Annual Rent 4 Times of AAR Lease Duty |
Example 3: Lease on Commercial Unit Where Rent or Part of Rent is Percentage of Tenant's Sales Turnover [3 Years]
i] A lease with fixed rental and an additional rental based on a percentage of gross sales turnover [GTO], without a maximum or minimum secured sum
Monthly Rent |
|
Estimated Gross Sales Turnover | $100,000 |
Service Charge | $400 per month |
Advertising and Promotional Charge | $100 per month |
To calculate the Stamp Duty payable:
Additional Rent subject to Stamp Duty | 0.5% x GTO = 0.5% x $100,000 = $500 |
Estimated Gross Rent Per Month | $5,000 + $500 [i.e. the additional rent] + $400 + $100 = $6,000 |
Total Rent | $6,000 x 36 months = $216,000 |
Stamp Duty Payable | 0.4% x $216,000=$864.00 |
ii] A lease with fixed rental and an additional rental based on a percentage of GTO that is subject to a minimum secured sum
Monthly Rent |
|
Estimated Gross Sales Turnover | $100,000 |
Service Charge | $400 per month |
Advertising and Promotional Charge | $100 |
To calculate the Stamp Duty payable:
Additional Rent subject to Stamp Duty | The higher of the amount derived from the estimated GTO or the minimum secured sum:
The additional rent subject to stamp duty would be $600 |
Estimated Gross Rent Per Month | $5,000 + $600 [i.e. the additional rent] + $400 + $100 = $6,100 |
Total Rent | $6,100 x 36 months = $219,600 |
Stamp Duty Payable | 0.4% x $219,600 = $878.40 $878 [rounded down to the nearest dollar] |
iii] A lease with fixed rental and an additional rental based on a percentage of GTO that is subject to a maximum secured sum
Monthly Rent |
|
Estimated Gross Sales Turnover | $100,000 |
Service Charge | $400 per month |
Advertising and Promotional Charge | $100 per month |
To calculate the Stamp Duty payable:
Additional Rent subject to Stamp Duty | Maximum secured sum = $650 |
Estimated Gross Rent Per Month | $5,000 + $650 [i.e. the additional rent] + $400 + $100 = $6,150 |
Total Rent | $6,150 x 36 months = $221,400 |
Stamp Duty Payable | 0.4% x $221,400 = $885.60 |
Example 4: Increase in Rental Where the Original Lease Period and Parties Remain the Same [More Than 4 Years]
5-year Lease | 5-year Lease 1st year: $2,000 per month 2nd year: $2,500 per month 3rd year: $3,500 per month 4th year: $3,800 per month 5th year: $4,300 per month |
Total Rent [$1,800 + $2,000 + $2,500 + $3,000 + $3,300] x 12 = $151,200 | Total Rent [$2,000 + $2,500 + $3,500 + $3,800 + $4,300] x 12 = $193,200 |
Average Annual Rent $151,200 / 5 = $30,240 | Average Annual Rent $193,200 / 5 = $38,640 |
Total Rent [Capped at 4 Years] $30,240 x 4 = $120,960 | Total Rent [Capped at 4 Years] $38,640 x 4 = $154,560 |
Increase in Total Rent [Capped at 4 Years] | |
Stamp Duty Payable [0.4% of the increase in Total Rent & Capped at 4 Years] $134 [rounded down to the nearest dollar] |
Example 5: Bringing forward / Deferring the lease without changes in lease term and gross rent
If the lease period has not commenced, and the lease was brought forward or deferred without any changes in the gross rent or lease term, stamp duty is not payable.
i] Bringing forward the lease
6-month lease 1 Jun 2020 – 30 Nov 2020 | 6-month lease where lease start date was brought forward to 1 Apr 2020 1 Apr 2020 – 30 Sep 2020 |
Monthly Rent $3,000 per month | Monthly Rent $3,000 per month |
Total Rent $3,000 x 6 = $18,000 | Total Rent $3,000 x 6 = $18,000 |
Stamp Duty is not payable on the Variation of Lease as there is no change in the gross rent or lease period |
ii] Deferring the lease
12-month lease 1 Jun 2020 – 31 May 2021 | 12-month lease where the lease start date was deferred to 1 Sep 2020 1 Sep 2020 – 31 Aug 2021 |
Monthly Rent $5,000 per month | Monthly Rent $5,000 per month |
Total Rent $5,000 x 12 = $60,000 | Total Rent $5,000 x 12 = $60,000 |
Stamp Duty is not payable on the Variation of Lease as there is no change in the gross rent or lease period |
Example 6: Extension of a lease term without change in gross rent
The landlord grants an extension to the lease period, but provided a rent-free period equivalent to the extended period. Stamp duty is payable on the extended period.
12-month lease 1 Jan 2020 – 31 Dec 2020 | 15-month lease where the original lease period was extended by 3 months 1 Jan 2020 – 31 Mar 2021 |
Monthly Rent $10,000 per month | Monthly Rent First 3 months: $10,000 per month Next 3 months: $0 [Rent-free period] Remaining 9 months: $10,000 per month |
Total Rent $10,000 x 12 = $120,000 | Total Rent First 3 months: $10,000 x 3 = $30,000 Next 3 months: $0 [Rent-free period] Remaining 9 months: $10,000 x 9 = $90,000 Total Rent: $30,000 + $0 + $90,000 = $120,000 |
Stamp Duty Payable [0.4% of the rent for the extended period from 1 Jan 2021 – 31 Mar 2021] 0.4% x [$10,000 x 3] = $120 |
For rates before 22 Feb 2014, please refer to Stamp Duty for Property.
Please refer to How to stamp Lease or Tenancy Agreements for the illustrated guide for stamping a Lease or Tenancy Agreement.