Rental — rules, process, and who pays what
Who may rent out
| Whole unit | Rooms | |
|---|---|---|
| HDB — SC owner | Yes, after 5-yr MOP | Yes, after MOP; owner must continue living in the flat |
| HDB — PR owner | No | Yes |
| HDB Prime / Plus flats | No, even after the 10-yr MOP | Rooms only |
| Private / EC (post-MOP) | Yes | Yes |
Minimum lease terms
- HDB whole flat: 6 months per tenancy. No short-term/Airbnb-style rental.
- Private residential: 3 consecutive months (URA). Anything shorter is illegal short-term accommodation.
- HDB maximum per application: up to 3 years; typically 2 years where any tenant is a non-Malaysian non-citizen.
HDB Non-Citizen Quota (NCQ)
- 8% at neighbourhood level, 11% at block level.
- Applies where any tenant renting the whole flat is a non-Malaysian non-citizen. Malaysians are excluded from the count.
- Does not apply to room rentals.
- If the quota is full, the flat can only be let to Singaporeans and Malaysians. Check the HDB e-service before marketing — this kills deals late if missed.
Tenant eligibility (HDB, non-citizens)
Must hold a valid Employment Pass, S Pass, Work Permit, Student Pass, Dependant's Pass, or Long-Term Visit Pass, valid at least 6 months at date of application. Tourist/short-term visit pass holders cannot rent a whole flat. HDB approval required before the tenancy starts.
Occupancy caps
- Default: 6 unrelated persons for both HDB flats and private residential.
- Temporary relaxation to 8 unrelated persons for 4-room+ HDB flats and private homes ≥90 sqm, subject to registration (~$20 fee for private with URA). Extended in January 2026 to 31 December 2028 — verify current status with HDB/URA before advising, this has been extended more than once.
- Smaller HDB flats: 4 persons (1- and 2-room).
Penalties
Subletting without HDB approval: fines up to $5,000 and possible compulsory acquisition of the flat.
Market convention on deposits
- 1-year lease: 1 month security deposit + 1 month advance rent.
- 2-year lease: 2 months security deposit + 1 month advance rent.
- Diplomatic clause (typically after 12 months, 2 months' notice), minor repair clause (tenant bears first $150–$300 per item), and A/C servicing obligations are market conventions, not law — all negotiable.
Landlord's recurring costs (the honest slide)
- Property tax at non-owner-occupied rates (12–36%) — no 2026 rebate
- Income tax on net rental income — either actual deductible expenses or the 15% deemed expense option, plus mortgage interest
- Agent commission + GST at each new lease and renewal
- A/C servicing, repairs, replacement of white goods
- Fire/home insurance, MCST maintenance
- HDB subletting application fee (small admin fee — confirm current amount on the HDB portal)
- Vacancy between tenancies — model at 80–90% occupancy, not 100%
LANDLORD — cost of putting a unit on the rental market
| Cost | Detail |
|---|---|
| Agent commission | 1 month's rent for a 24-month lease, pro-rated by term, + GST |
| Property tax uplift | Non-owner-occupied 12–36% of AV. No 2026 rebate. |
| Income tax on net rental | Actual expenses, or 15% deemed expense + mortgage interest |
| HDB subletting application | HDB approval mandatory; small admin fee — verify current amount |
| A/C servicing | Typically quarterly; often landlord's obligation beyond a minor-repair threshold |
| Repairs & replacements | White goods, water heater, plumbing |
| Fire / landlord insurance | Recommended |
| MCST maintenance | Continues regardless of tenancy |
| Vacancy | Model at 80–90% occupancy, not 100% |
| Furnishing / refresh | Between tenancies |
TENANT — cash needed at signing
| Cost | Detail |
|---|---|
| Lease stamp duty | 0.4% of total rent — due within 14 days. $4,000 × 24 mths = $384 |
| Security deposit | 1 month (1-yr lease) / 2 months (2-yr lease) |
| Advance rent | 1 month |
| Agent commission | 1 month's rent for 24 months, pro-rated, + GST — paid to their own agent |
| Utilities & internet | Deposit + setup |
| A/C servicing | Usually tenant's obligation |
| Minor repair clause | Typically first $150–$300 per item per incident |
| Handover inventory | Photograph everything — deposit disputes turn on this |
Cash-at-signing worked example — $4,000/month, 24-month lease: 2 months deposit ($8,000) + 1 month advance ($4,000) + stamp duty ($384) + agent commission 1 month + GST ($4,360) = ~$16,744 upfront.
Property tax — the recurring cost buyers and landlords under-model
Tax = Annual Value (AV) × progressive rate. AV = IRAS's estimate of annual market rent, excluding furnishing and maintenance.
Owner-occupied (from 1 Jan 2025): 0% on the first $12,000 of AV, rising to 32% above $140,000.
Non-owner-occupied (from 1 Jan 2024, still current):
| AV band | Rate |
|---|---|
| First $30,000 | 12% |
| Next $15,000 | 20% |
| Next $15,000 | 28% |
| Above $60,000 | 36% |
2026 one-off rebate: 15% for owner-occupied HDB flats; 10% capped at $500 for owner-occupied private. Rebate does not apply to rented-out property.
Worked (Deck 4 slide): 2-bedroom OCR condo rented at $2,600/month → AV ≈ $31,200 → tax = 12% × $30,000 + 20% × $1,200 = $3,840/year. Owner-occupied, the same unit at AV $31,200 pays roughly $770 before rebate.
The point for landlords: switching a unit from own-stay to rented can add $3,000–$4,000+ a year in property tax alone, before income tax. A quoted 4% gross yield is often 2.5–3% net after tax.