‘Cheap rental properties in Singapore’ is probably the most searched topic on Google. Renting an apartment in the country can be an expensive affair. However, if you know where to look, you might come across a few affordable options.
Once you shortlist all the properties you are interested in, it is advisable to invest time in finding out the original rental prices for the selected area. The prices mentioned online are generally hiked to allow room for negotiation.
If you are interested in a private property, you can check the prices for apartments on Urban Development Authority (URA). This website will give you information on the rent, size of the flat, and the lease commencement date. A 700 square feet 2-bedroom flat in The Orient on Pasir Panjang Road, for example, will cost you around S$1,700 per month.
In case you are interested in an HDB flat, you can visit the HDB website to have a quick look at the prices, lease commencement month, and the total square feet of the flat. For instance, the lease for a 3-room flat on Lengkong Tiga, Bedok starts in July 2018 and a monthly rent of S$2,000 will be charged.
Before you decide on which apartment to stay in, there are a few things you should know about.
A Tenancy Agreement is a signed contract between the tenant and the landlord. This agreement gives certain rights to both of you in respect to the tenancy like your right to occupy the flat and the landlord’s right to take rent every month for letting you stay.
A Tenancy Agreement is a vital document as it clearly mentions the rules and regulations of leasing a property and the rights of each party. Hence, this agreement protects parties from consequences that may occur with early termination of the tenancy either by you or your landlord in case of a tenancy dispute.
Terms to Look for in Tenancy Agreements
A comprehensive rental agreement will have the following terms:
- Name of the property and term of occupancy.
- Payment of rent, security deposit, and utilities like water and electricity bills and any other charges, license or subscription fees.
- Use of premises.
- Immigration status of occupiers.
- Maintenance of property.
- Diplomatic Clause or Reimbursement Clause (only for expats).
- Tenants’ covenants: to pay rent on time, allow landlord to visit the premises, and not to sublet.
- Landlord’s covenants: provide a peaceful premise and fit for human habitation, and to not derogate from the grant.
- Termination of tenancy.
- Suspension/delay of rent.
- Anticipatory breach.
- Stamp Duty fees.
Everything You Need to Know About Stamp Duty
What is a Stamp Duty?
A Stamp Duty is a tax on your rental agreement, which is payable within 14 days from the date of signing the Tenancy Agreement in Singapore. This tax needs to be paid by you along with the monthly rent and the security deposit. If the agreement is signed overseas, then you need to pay the tax within 30 days from receiving the document. If you are unfamiliar with the process of paying the tax, you can request your agent (if applicable) to assist you.
How Much Am I Required to Pay?
The amount of Stamp Duty you need to pay is determined based on the rent per month and the tenure of your lease period. The higher the rent and longer the stay period, the higher the amount of tax payable.
The table below shows the total lease amount and the stamp duty rates:
|Average Annual Rate (AAR)*||Stamp Duty Rates|
|S$1,000 or less||Exempted|
|Lease tenure of 4 years or less||0.4% of the total rent for the tenure|
|Lease tenure for over 4 years||0.4% of 4 times the AAR for the entire duration|
*AAR includes payments like advertising charges, furniture or fittings charges, maintenance fees, and service charges.
To explain it better, let’s have a look at an example.
Suppose you rented a 2-room apartment and the rent is S$3,000 each month for a lease period of 24 months. Hence, the total amount of rent payable for 24 months is S$72,000 (S$3,000 x 24). So, the total Stamp Duty you need to pay is S$288 (0.4/100 x S$72,000).
Late Stamp Duty Payment Penalty
Failure to pay the Stamp Duty on time is considered an offense in Singapore. The authorities and your landlord have the right to take legal action against you if you choose to not pay the tax at all.
If you do not pay the Stamp Duty amount on time for 3 months, a penalty charge of S$10 or any amount equal to the duty payable will be imposed.
For delayed payments beyond 3 months, an amount of S$25 or 4 times of the duty payable will be charged.
How to Pay Stamp Duty?
You can pay your Stamp Duty through the following methods:
For non-registered users:
- Cheque or cashier’s order
For registered users:
- Cheque or cashier’s order
At any of the service bureaus:
- Cashier’s order
At e-terminals at IRAS Surf Centre
*If you want to pay through eNETS, you must have an internet banking account with UOB, Citi, OCBC, Standard Chartered, or DBS/POSB.
Procedure for Rental for Expats
Singapore, one of the popular destinations for expats to settle and work in, has about 1.34 million foreign workers. According to BBC, expatriates call Singapore a utopia due to the convenience of living and working in the country.
Despite all the benefits of working in the country, Singapore is comparatively expensive than other countries in the region. Most expats stay in Singapore for one or two years. So, it does not make sense to buy a property. Hence, they prefer renting a flat since it’s an economical option.
So, if you are a foreigner in Singapore and want to rent an apartment, you could follow these steps:
- Hire a realtor: A property agent will guide you and safeguard your interest throughout the process of house hunting. He/she will offer you the best possible rate and choose the best property. Also, the agent will arrange your documents and make sure that you are dealing with the correct owner.
- Hire only one agent: Avoid hiring more than one agent at a time. If you do so, there can be confusing and you might ending up seeing the same property over and over again. Having one agent will save your time and he/she will understand your needs better.
- Location and rent: Decide on the location that is convenient for you and your family. Preferably, look for an area that is close to your office or the MRT. Moreover, keep a budget ready. Figure out how much you can afford to spend on rent.
- Before taking over: Once the entire documentation process is done, your landlord will give you an inventory list with listed items like electrical appliances, air-conditioners, fittings and furniture, lightings, and water heaters. Check the list to see if all the items mentioned in the inventory are present in your flat.
- Commission: Each property agent will charge differently. Hence, check with your agent for his/her service fee. Make sure you receive an authentic invoice so that you can issue a cheque to the agency.
- Look for the Diplomatic Clause in the Tenancy Agreement: This clause is included in a Tenancy Agreement only for expats, reason being, if you get transferred or become unemployed and terminate the lease before the tenure, then your landlord will reimburse your security deposit.
What is a Diplomatic or Reimbursement Clause?
Once your landlord hands over the Tenancy Agreement, look for the Diplomatic Clause as it protects you from losing your security deposit in case you are unemployed, transferred to a different country or terminate the lease before completing the tenure. In such scenarios, the entire security deposit will be refunded. Most landlords include this clause only if the lease is for over one year.
A basic Tenancy Agreement will include Reimbursement Clause along with the Diplomatic Clause, which states that if you opt for the Diplomatic Clause, you will have to refund a portion of the commission paid to the property agent by the landlord. Landlords pay the full commission to their agent for a 2-year lease. But, if you do not stay for 2 years or more, then you have to refund the commission on pro-rata basis.
How to Find the Right Property for Renting
If you have never lived in this country before, you may not know where to look and how to go about the entire process of house hunting. If you follow these 6 steps, you can be less stressful and find a good apartment in Singapore:
- Plan a budget: Before setting out on the journey to find a flat in Singapore, make sure you know how much you are willing to shell out every month on rent. It is advisable to spend no more than 20% of your salary on housing costs.
- List out the amenities you want: Make a list of all the amenities and features you want in your new flat. Amenities such as a swimming pool, gym, clubhouse, and so on can increase the monthly rent.
- Neighbourhood research: The key to narrow down your options is to know which neighbourhood works the best for you. Speak to your friends and research to find out which areas in the country suit your needs.
- Consider your daily commute: If you depend on public transport and want to cut down on costs, then you can consider staying in an apartment closer to your workplace. Also, you can look for a place to stay which is close to MRT.
- Hire a property agent: A professional property agent can help you find the house of your dreams within your budget. He/she can advise you on the prevailing rent rates, which area you can consider, and assist you with the entire documentation process.
- Negotiate: Since Singapore has a competitive rental market, there is scope for negotiation. The real estate market has seen its highs and lows. Having said this, the decline in property value varies by area and property. Ask your agent to negotiate for the best rental price on your behalf.
Documents You'll Require Before Renting a House
When renting an apartment in Singapore, you will need to submit the following documents:
- Photo ID
- Proof of Income
- Address Proof
The documents the expats need to submit to rent a flat are:
- Employment pass/work permit
- A month’s rental for good faith booking deposit
Things You Should Know About the Letter of Intent
A Letter of Intent or Letter of Offer is just a letter stating your intentions to venture into an agreement with the landlord. This letter serves as an intermediary between the negotiation and signing of the agreement.
The Letter of Intent shows the landlord that you are serious about renting his/her property. It also secures the premises, which means the moment the letter is signed, your landlord will stop looking for any other tenants and close a deal with you.
The Letter of Intent is accompanied by the good faith deposit or the booking deposit, which is mandatory and acts as a token money to back your intentions. The booking deposit is a month’s rent for a lease for one year. This deposit increases when you rent for a longer time.
Once the rental agreement is signed by you and the landlord, this good faith deposit amount gets added to your security deposit or serve as a month’s rental fee.
Steps You Can Take to Avoid Tenant-Landlord Disputes
To avoid a landlord-tenant disputes, you can follow these steps below:
- Read the agreement thoroughly: Go through the Tenancy Agreement and suggest changes to any clauses you are not comfortable with. Make sure the agreement is not worded in a way that favours only the landlord. There should not be any vague terms in the agreement.
- Property hand-over: Go through the inventory list carefully, take pictures of the furniture and white goods, and point out defects to the landlord before taking over the apartment.
- While staying in the flat: If you come across any damage or defects in the building, notify your landlord immediately and highlight the issue. It maybe his/her responsibility to fix it.
- Giving the property back: Allow your landlord to inspect the premises, keep notes and photographs handy, get confirmation that the apartment is in a satisfactory state and there are no debts.
What Happens if My Landlord Withholds My Security Deposit?
According to the rental agreement, the landlord must refund the balance deposit within 14 days from the date of expiry or termination of the lease. The security deposit protects the landlord from any breach of the agreement. If the owner of the property refuses to return your security deposit, then he/she must justify the reason.
If the owner withholds your security without any reasons, then he/she will breach the terms mentioned in the rental agreement. In such a case, you can lodge a complaint with the Small Claims Tribunal. You do not require a lawyer to claim and it is more cost-effective for claims less than S$10,000.
However, to claim, you must meet the following criteria:
- The premises has to be a residential premise.
- The contract should not be for more than 2 years.
- The claim should be up to S$20,000.
- The claim arose less than a year ago.
You will have to pay a lodgement fee of up to 3% of the claim amount. Once the claim is filed, the Tribunals will address the issue within 14 days from the filing date before the Registrar. The Registrar will mediate the claim and try to resolve the dispute. If the Registrar fails to fix it, then the claim will be presented for hearing before the Referee within 10 days. The Referee will explore the possibilities of settlement before resolving the case.