GST payable on residential lease???

KindClare · Post by **KindClare** » Sat, 10 Apr 2010 5:26 am

Hello. I am a little bit stuck here. My agent is telling me that 7% GST is payable (by tenant) on rent paid for a condo. (Company paid, 2 year lease, unfurnished). I found this to be odd so I went to the IRAS website and read that Residential property is NOT subject to GST. So either the IRAS website has out of date information or my agent is lying to me or there is some loophole I am missing.

Anyone have any insight?

Saint · Post by **Saint** » Sat, 10 Apr 2010 11:10 am

You are correct, no GST is payable by tenants on the rental amount. GST is only liable on commercial rental properties.

Basically the Agent is trying to con you. I'm guessing you have this in writting, if so threaten to report him/her.

aster · Post by **aster** » Sat, 10 Apr 2010 12:57 pm

Saint wrote:GST is only liable on commercial rental properties.

Basically the Agent is trying to con you. I'm guessing you have this in writting, if so threaten to report him/her.

Yes, either the landlord is running things from a company standpoint or is trying to extort extra $ from you.

What shows up on the receipts/invoices and who is the other side in the contract? Is it a person or a company?

ksl · Post by **ksl** » Sat, 10 Apr 2010 1:10 pm

If the Realtor is GST registered, GST maybe payable on certain things like the rental of movable furniture. Though agents are normally freelance and do not pay GST....If the agent is employed with the registered GST realtor Company, GST will be applicable for service only.

Movable furniture maybe GST payable if rented, though this must be inclusive in the contract, stating clearly the furniture is separate to the property rental if its all inclusive in the property rental that is tough luck. Landlords cannot charge GST on furiture. Only registered Companies that supply this service of furniture rental. Do not pay any agent GST after the deal is done. As it is likely a con and needs close investigation by the proper authorities.

http://www.iras.gov.sg/irasHome/page04.aspx?id=2010

It appears that the agent is actually trying to con the tenant. The tenant is not liable to GST, when a Company has rented the condo. Tenants do not specifically pay GST on unfurnished property.

KindClare · Post by **KindClare** » Sat, 10 Apr 2010 2:41 pm

Just heard from my agent who said that if the landlord is a Corporate landlord, then GST is payable. Private landlords are exempt.

Saint · Post by **Saint** » Sat, 10 Apr 2010 4:17 pm

KindClare wrote:Just heard from my agent who said that if the landlord is a Corporate landlord, then GST is payable. Private landlords are exempt.

Just tell the agent that the agreed rental amount includes GST. Any possible GST liability has to be specifically notified at the beginning, not at the end.

I still think the Agent is trying to con you. There are hundreds of Corporate landlords and these shouldn't be classed as commercial properties but residential.

aster · Post by **aster** » Sat, 10 Apr 2010 7:26 pm

If a company rents apartments that it owns and is GST registered then I do believe they have to charge this tax.

Post by **Strong Eagle** » Sat, 10 Apr 2010 11:20 pm

aster wrote:If a company rents apartments that it owns and is GST registered then I do believe they have to charge this tax.

Yes, but with the exception of restaurants, and a few other businesses, the price quoted must always include GST.

Go on down to Lucky Plaza or Sim Lim... make a deal... then watch the guy try to add GST... then pull out your mobile... tell him you are calling IRAS for GST violation... get original price.

http://www.iras.gov.sg/irasHome/page04.aspx?id=824

So... tell them to piss off... the price you were quoted must include GST or they are in violation of the law... and if they press it, report them.

KindClare · Post by **KindClare** » Sun, 11 Apr 2010 12:38 am

Thanks! That is excellent advice!

ksl · Post by **ksl** » Sun, 11 Apr 2010 11:50 am

KindClare wrote:Thanks! That is excellent advice!

In fact I would just contact IRAS to confirm then report him for the violation, he's probably done it before.....Then you can just say to him IRAS will be contacting him with regards to a violation of GST laws. Smile when you tell him!

yoongf · Post by **yoongf** » Mon, 12 Apr 2010 7:45 am

aster wrote:If a company rents apartments that it owns and is GST registered then I do believe they have to charge this tax.

http://www.iras.gov.sg/irasHome/uploade ... 010707.pdf

See para 5.8.6. Even the most ambiguous case of Serviced Apt leases, The resi lease of still GST exempt.

KindClare · Post by **KindClare** » Mon, 12 Apr 2010 7:55 am

I've emailed the IRAS to enquire. I will let you all know what I learn when/if they respond.

KindClare · Post by **KindClare** » Mon, 12 Apr 2010 8:12 pm

Let me add that I an very impressed with the speed of response from the IRAS!

Dear Clare,

Thank you for your email.

The sale and lease of an unfurnished residential property are exempt from GST and landlords cannot charge GST on the sale or lease of such properties if they are GST-registered
While the sales and lease of residential properties and fixtures such as built-in cabinets and wardrobes, kitchen and sanitary wares, wall-mounted air conditioners that are attached permanently to the property are exempt from GST, the rent or sale of any movable furniture and fittings of the property are subject to GST at the prevailing rate of 7%. In this case, if Far East Organisation, as the landlord rents out an unfurnished condo unit (i.e. residential property), no GST is required to be charged to the tenant on the rental.

Exemption from GST does not apply to any arranging, broking or advisory services relating to the sale or lease of residential properties. If a GST-registered person or company provides these services, the fees are still subject to GST.

To learn more about GST, please visit our website at www.iras.gov.sg.

Regards

LOW Wan Yeong, Mabel
Senior Tax Officer (GST-GEN)| Inland Revenue Authority of Singapore

Post by **Strong Eagle** » Mon, 12 Apr 2010 8:16 pm

I'd write one more qualifying email, namely, that any quotes given to you for the noted GST chargeable services must be GST inclusive.

pravnash · Post by **pravnash** » Sat, 01 May 2010 11:14 am

Hi

Your agent is supposed to know this !

Nice to know that IRAS replies promptly !

Cheers

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GST payable on residential lease???

GST payable on residential lease???

Response from IRAS!!

Hmm..

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