New stamp duty calculation w.e.f 22 Feb 2014. Stamp Duty needs to be paid on all lease documents. These include:
- Lease or Tenancy Agreement or Agreement for Lease to let or sublet the entire property or part of a property such as a room in a HDB flat
- Agreement to renew or extend the lease
- Agreement for Variation of Lease
- Acceptance to the Letter of Offer
- Any written agreement pertaining to any property leasing transaction
On this page:
- What is a Lease with fixed rent?
- How to calculate Stamp Duty?
- What are the Stamp Duty rates?
- Illustration of Stamp Duty calculation
- Do I need to pay Stamp Duty on a letter of intent or licence agreement?
- To stamp my document online
What is a Lease with fixed rent?
A Lease with fixed rent is one where the amount of rent is ascertained upfront and is a fixed amount payable throughout the lease period. This type of lease is common in the leasing of residential properties.
How to calculate Stamp Duty?
For documents executed on or after 22 Feb 2014, the stamp duty payable for leases with lease period of 4 years or less will be calculated based on the total contractual and other considerations or market rent, whichever is higher. For leases with lease period of more than 4 years, the stamp duty payable will be calculated based on 4 times the average annual rent (AAR).
AAR refers to the higher of the average annual contractual or annualised market rent and includes other considerations such as payments for :
• Service charge
• Maintenance charge
• Advertising and Promotion charge
• Furniture / Fittings charge
• Any other charges, but exclude GST charge
What are the Stamp Duty rates?
i) Before 22 February 2014
ii) On and After 22 February 2014
(a) For documents dated on and after 22 February 2014 where lease period is 4 years or less
(b) For documents dated on and after 22 February 2014 where lease period is more than 4 years
Do I need to pay Stamp Duty on a letter of intent or licence agreement?
A letter of intent is not liable to Stamp Duty because it does not amount to a lease agreement.
A licence agreement that does not tantamount to a lease is also not liable to Stamp Duty.
Characteristics of a lease
Typically, a lease gives a person, the “lessee”, the right to exclusive possession, allowing the person to occupy, use and otherwise enjoy the property to the exclusion of all others for a fixed or determinable period of time. This is an interest in the property out of which sub-interests may be carved and assigned (subject to the terms and conditions of the lease).
Characteristics of a licence
Whilst there are several variations, a licence entitles a person, the “licensee”, to enter and use the property for specific purposes authorised by the licence, but without conferring on the licensee either exclusive possession or any estate in the land. The entitlement is thus either gratuitous, or a personal right which is not generally transferable.
For example, a lodger in a hotel has a personal contractual right to occupy the room for a fixed period in exchange for a fee, but has neither exclusive possession nor a property interest in the room itself. He is thus a licensee.
New stamp duty calculation w.e.f 22 Feb 2014