Associated costs
This guide covers taxes, legal and administrative fees, deposits and recurring charges for a commercial tenancy. GST generally applies to taxable commercial rent charged by a GST-registered supplier. Lease duty depends on average annual rent and lease duration; see the calculation rules below rather than assuming a fixed percentage of one month’s rent.
For the wider leasing process, see our Singapore conventional-office guide and office TCO calculator. Confirm each cost and its tax basis in your proposal and lease.
Taxes
Goods and Services Tax (GST)
GST generally applies at 9% to taxable commercial rent charged by a GST-registered supplier. Residential rent is generally exempt. A tenant’s input-tax recovery depends on the applicable IRAS conditions.
Stamp Duty
Where average annual rent (AAR) does not exceed S$1,000, lease duty is exempt. Where AAR exceeds S$1,000, duty is 0.4% of total rent for a lease of four years or less, or 0.4% of four times AAR for a longer or indefinite term. For a flat three-year rent, this equals 14.4% of one month’s rent before rounding; this is an illustration, not a rule for every lease. Confirm the dutiable rent and your lease’s treatment.
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
Property tax is payable by the property owner. Whether any cost or increase is passed through to the tenant, and how it is charged, depends on the lease. Check the rent and service-charge provisions to avoid double-counting.
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
Confirm the deposit amount, accepted security form and any financial-standing conditions in the proposed lease. There is no universal paid-up-capital formula. Recovery is subject to the agreement, permitted deductions, settlement and refund timing; confirm whether interest is payable and any conditions for reducing the 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 (subjected to GST).
Additional Spaces: Subject to availability, extra parking may be offered on a quarterly basis.
This guide covers taxes, legal and administrative fees, deposits and recurring charges for a commercial tenancy. GST generally applies to taxable commercial rent charged by a GST-registered supplier. Lease duty depends on average annual rent and lease duration; see the calculation rules below rather than assuming a fixed percentage of one month’s rent.
For the wider leasing process, see our Singapore conventional-office guide and office TCO calculator. Confirm each cost and its tax basis in your proposal and lease.
Taxes
Goods and Services Tax (GST)
GST generally applies at 9% to taxable commercial rent charged by a GST-registered supplier. Residential rent is generally exempt. A tenant’s input-tax recovery depends on the applicable IRAS conditions.
Stamp Duty
Where average annual rent (AAR) does not exceed S$1,000, lease duty is exempt. Where AAR exceeds S$1,000, duty is 0.4% of total rent for a lease of four years or less, or 0.4% of four times AAR for a longer or indefinite term. For a flat three-year rent, this equals 14.4% of one month’s rent before rounding; this is an illustration, not a rule for every lease. Confirm the dutiable rent and your lease’s treatment.
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
Confirm the deposit amount, accepted security form and any financial-standing conditions in the proposed lease. There is no universal paid-up-capital formula. Recovery is subject to the agreement, permitted deductions, settlement and refund timing; confirm whether interest is payable and any conditions for reducing the deposit.
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.
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.
Property Tax
Property tax is payable by the property owner. Whether any cost or increase is passed through to the tenant, and how it is charged, depends on the lease. Check the rent and service-charge provisions to avoid double-counting.
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.
Disclaimer:
The content published on this website is provided for general information purposes only and is not intended to be a substitute for professional advice. We make no guarantees regarding the accuracy, completeness, or timeliness of the information presented.
Under no circumstances shall we be liable for any reliance you place on the information contained herein, or for any errors or mistakes contained in the text. It is your sole responsibility to verify any information before acting upon it. We strongly recommend that you perform your own due diligence and consult with relevant professionals before entering into any transaction or agreement.
