Associated costs

This guide outlines the typical financial obligations a commercial tenant can expect, including taxes, legal and administrative fees, deposits, and recurring charges. All rental payments in Singapore are subject to 9% Goods and Services Tax (GST), which GST-registered tenants may usually claim as an input tax credit. In addition, tenants are required to pay stamp duty, a one-time tax calculated at 0.4% of the total rent over the lease term, generally equivalent to approximately 15% of one month’s rent.

Taxes

Goods and Services Tax (GST)
A 9% GST is applicable to all rental payments.
Tenants who are registered for GST can typically claim the GST paid on rent as an input tax credit.
Stamp Duty
This is a one-time tax levied on the lease document, payable by the tenant.
The duty is calculated at 0.4% of the total rent payable over the entire lease term.
As a general estimate, this cost is approximately 15% of one month’s rent.

Legal Fees

Tenant typically bears the landlord’s legal fees for preparing the lease.

Advance Rental

Upon signing the Letter Of Offer or Tenancy Agreement, an advance payment of one month’s gross rent (inclusive of service charge and GST) is typically required.

Property Tax

While property tax is payable by the landlord, the cost is invariably recovered from the tenant through the service charge.
Any future increases in property tax will also be passed through via the service charge

Agency / Broker Fees

No fees are payable by the tenant. Agency commissions are covered by the landlord or Landlords’ agents.
However there could be exceptions.

Security Deposit

3-6 months’ gross rent, refundable at the end of the lease without any interest
The actual amount payable largely depends on the amount of paid up capital of the enbtity of the Tenant in ACRA.
Typically the standard requirement for the Tenant is to have at least 6 months worth of rent in the paid up capital to qualify for a 3 months security deposit.

Recurring charges Insurance

The tenant is required to secure their own insurance policies, which typically include:
Contents Insurance: For their own property and assets.
Public Liability Insurance: To cover incidents occurring within the leased premises.

Carpark fees

Allocation: The number of parking lots is usually proportionate to the floor area leased, with an average ratio of 1 lot per 1,000 to 3,000 sq ft.
Cost: Parking is charged separately from office rent, typically ranging from $250 to $500 per month, per lot (excluding GST).
Additional Spaces: Subject to availability, extra parking may be offered on a quarterly basis.

This guide outlines the typical financial costs and responsibilities for a commercial tenant, covering taxes, fees, deposits, and other recurring charges.

Taxes

Legal fees

The tenant is typically responsible for all legal costs associated with the tenancy agreement.
This includes their own legal fees and often those of the landlord.
If the landlord uses a standard template, the cost may just be a fixed administration fee.
If significant negotiations and amendments are required , there maybe additional legal fees chargeable to the tenant by the Landlord’ lawyer.

Agency / Broker Fees

No fees are payable by the tenant. Agency commissions are covered by the landlord or Landlords’ agents.
However there could be exceptions.

Security deposit

A refundable cash deposit equivalent to 3 months of gross rent (inclusive of service charge and government rates) is required.
The deposit is returned at the end of the lease, without interest.
If the tenant’s paid up capital is less than 6 montsh worth of rent, then the tenant is required to furnish a 6 months worth of cash rental as security deposit. However tenant is able to increase their paid up capital at a later stage , for a possible refund of the additional security deposit required.

Advance Rental

Upon signing the Letter Of Offer or Tenancy Agreement, an advance payment of one month’s gross rent (inclusive of service charge and GST) is typically required.