Answer
Mortgage Interest Deduction — Tax Relief for Rental Property Singapore
If you rent out property in Singapore, you can deduct mortgage interest and other expenses from rental income before paying tax. This can cut your tax bill by thousands per year.
Answer: Yes, mortgage interest is tax-deductible against rental income in Singapore. For a $1.5M investment condo with a $1.125M loan at 3.5%, you can deduct approximately $24,500/yr in interest plus MCST, property tax, and repairs. On gross rent of $45,600/yr, total deductions of ~$38,660 bring taxable rental income down to just $6,940 — potentially saving $2,000–$5,000/yr in income tax depending on your marginal rate.
Deductible Expenses for Rental Property
All expenses must be incurred during the rental period
| Expense | Typical Amount | Note |
|---|---|---|
| Mortgage interest (not principal) | $15,000–$30,000/yr | Biggest deduction for leveraged investors |
| Property tax (investor rate) | $2,000–$6,000/yr | Non-owner-occupied rates: 12–36% of AV |
| MCST / maintenance fees | $4,000–$9,000/yr | Include sinking fund contributions |
| Fire insurance | $100–$300/yr | Only common property insurance (not contents) |
| Repairs and maintenance | $1,000–$3,000/yr | Repairs yes, improvements (reno) no |
| Agent commission (tenant finding) | $1,500–$2,500/yr | 0.5 month rent, amortised over lease |
| Stamp duty on tenancy agreement | $80–$200/yr | Tenant usually pays, but deductible if landlord pays |
| Internet/utilities (if included in rent) | $0–$2,400/yr | Only if landlord pays and included in rent |
NOT Deductible
- xMortgage principal repayments
- xRenovation or improvement costs (capital expense)
- xABSD or BSD paid on purchase
- xAgent commission for buying/selling the property
- xPersonal expenses (furniture for own use)
- xPenalties and fines
Worked Example: $1.5M Condo, 75% LTV
Loan $1.125M at 3.5%, renting at $3,800/mo
| Item | Amount |
|---|---|
| Gross rental income ($3,800/mo x 12) | $45,600 |
| Less: Mortgage interest | -$24,500 |
| Less: Property tax (investor rate) | -$4,560 |
| Less: MCST + sinking fund | -$6,000 |
| Less: Fire insurance | -$200 |
| Less: Repairs | -$1,500 |
| Less: Agent commission (amortised) | -$1,900 |
| Total deductions | -$38,660 |
| Taxable rental income | $6,940 |
At a 15% marginal tax rate, tax on $6,940 = $1,041. Without deductions, tax on $45,600 would be $6,840 — you save $5,799/yr.
Singapore Income Tax Brackets (2026)
Rental income is added to your employment income and taxed at marginal rate
| Chargeable Income | Rate | Tax on Bracket |
|---|---|---|
| First $20,000 | 0% | $0 |
| $20,001–$30,000 | 2% | $200 |
| $30,001–$40,000 | 3.5% | $350 |
| $40,001–$80,000 | 7% | $2,800 |
| $80,001–$120,000 | 11.5% | $4,600 |
| $120,001–$160,000 | 15% | $6,000 |
| $160,001–$200,000 | 18% | $7,200 |
| $200,001–$240,000 | 19% | $7,600 |
| $240,001–$280,000 | 19.5% | $7,800 |
| $280,001–$320,000 | 20% | $8,000 |
| Above $320,000 | 22% | Varies |
Rental income pushes you into a higher bracket. If your salary is $100K and net rental is $7K, the $7K is taxed at 11.5%.
See your mortgage interest breakdown
Use the mortgage calculator to see how much of each payment goes to interest (deductible) vs principal (not deductible).
Mortgage CalculatorFAQ
Can I deduct mortgage interest from rental income in Singapore?
Yes. If your property is rented out, the mortgage interest paid (not principal repayment) is deductible against rental income for income tax purposes. This is one of the biggest tax deductions available to landlords. For a $750K loan at 3.5%, that is roughly $26,000 in deductible interest in year 1.
Can I deduct mortgage interest on my own home?
No. Mortgage interest deduction only applies to properties that generate rental income. If you live in the property yourself, no deduction is available. Singapore has no owner-occupier mortgage tax relief.
What if my deductible expenses exceed my rental income?
You cannot carry forward rental losses to offset other income (salary, business). However, the excess can be carried forward to offset future rental income from the same property. This is common in early years when mortgage interest is highest.
Is principal repayment tax-deductible?
No. Only the interest portion of your mortgage payment is deductible. The principal repayment is not a tax-deductible expense — it is a capital outflow (paying down your asset). On a $3,500/mo mortgage payment, roughly $2,100 may be interest and $1,400 principal in early years.
Do I need to declare rental income to IRAS?
Yes. All rental income must be declared in your annual tax return. IRAS cross-references tenancy stamp duty records with tax filings. Failure to declare rental income is a tax offence. File using Form B (self-employed) or IR8A supplementary section.
Related
Last updated Feb 2026. Tax rules from IRAS. This is not tax advice — consult a tax professional for your specific situation.