Cost of Owning Real Estate in Singapore

Mortgage Instalment, Maintenance & Sinking Fund / HDB S&CC, Property Tax, Fire Insurance, Mortgage Insurance, Income Tax (for rental properties)

1. Mortgage Instalment

You will begin paying mortgage instalment on monthly basis as soon as you collect keys to your property. HDB is known to be more lenient in the event of late payment, while banks or financial institutions do foreclose your property in the event of 3 months consecutive default in repayment.

2. Maintenance Fee & Sinking Fund / HDB’s Service & Conservancy Charges (S&CC)

Beside monthly mortgage instalment and utility bills, strata-titled property owners have to pay maintenance fees that form the management committee’s fund. It is intended to pay for the day-to-day short-term expenses to upkeep the common facilities and common area such as security guards, swimming pool maintenance, cleaners, gardeners, pest control, etc. Price varies based on strata development setup, shares value allocation, and it ranges from $100 up to even $1,500 per month. Usually after property reaches a certain age i.e. 10 years, property owners start paying for sinking fund to save money for future long-term expenses such as painting of buildings, replace the lift, or rejuvenate the gymnasium. Strata-titled property owners are usually billed on quarterly (3-monthly) basis.

HDB flat owners have to pay monthly Service & Conservancy Charges (S&CC) to their respective Town Councils managing the estate. The amount is much less than that of private strata-titled properties, and more often the government will give rebate on this e.g. 2-3 months rebate in a year. Price varies based on types of flats, and Town Councils, ranging from between ~ $25 – $90 per month.

3. Property Tax

Owning a property in Singapore comes with the responsibility of paying property tax, which goes towards nation building. It applies whether the property is occupied by the owner (owner-occupied), rented out or left vacant. To encourage home ownership, the tax rate is lower for owner-occupied residential properties. HDB flat owners also have to pay Property Tax.


Source: Inland Revenue Authority of Singapore (IRAS)


Click here to learn the latest Property Tax Rates

Property tax is calculated by multiplying the Annual Value of your property with the relevant Property Tax Rates that apply to you. Annual Value is the estimated gross annual rent of the property if it were to be rented out, excluding furniture, furnishings and maintenance fees. It is determined based on estimated market rentals of similar or comparable properties and not on the actual rental income received. Annual Value is assessed annually and may be revised upwards or downwards or kept at the same level depending on the market values at that time. Property Tax is different from Income Tax that will be explained below.

4. Fire Insurance

If you are financing your housing with banks or financial institutions, they made it compulsory that you have a fire insurance insuring your property against incidence of fire. The cost of fire insurance annually starts from $20. Premium is based on size of property, and coverage.

5. Mortgage Insurance

Mortgage insurance protects borrowers (who is also the homeowner) and his/her families against losing their homes in the event of his/her death or total permanent disability. You may have heard of Home Protection Scheme (HPS). It is of similar concept, except it is made compulsory by CPF to flat buyers servicing their monthly housing loan instalments on their HDB flat. HPS does not cover private residential properties or Executive Condominium. In the case of private bank loans, it is also not made compulsory by banks unlike the Fire Insurance, however it is advisable that borrowers purchase mortgage insurance. In the event of death or total permanent disability, the insurer will fully pay off the outstanding loan balance.

6. Income Tax (rental properties)

Income Tax is a tax on your earnings, and this include the rental income earned from renting out your property. Rental income refers to the full amount of rent and related payments property owners receive then they rent out their property. This includes rent of the premises, maintenance of the premises, furniture and fittings. There are deductible expenses such as your housing loan interest, property tax, fire insurance, repairs, maintenance, replacement of furniture and fittings. To simply claim for the deductible expenses, IRAS allow residential property owners to claim 15% deemed rental expenses. Commercial and industrial property owners do not have this simplified claim option. Click here for more info on IRAS website.

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