Real estate GST – all you need to know about what you are liable for

As different GST treatment applies to residential and non-residential property, you need to identify if your property is residential or non-residential.

Residential Properties

Residential properties refer to vacant residential land, and residential building, flat, or tenement (referred to as ‘building’).

Land
It is considered as residential land if it is a vacant land zoned ‘Residential’ in the Master Plan and the use of the land is approved for residential or condominium development.

Residential land includes vacant land or land with existing building (which is required by the Government or public authority to be demolished) which is supplied by the Government or public authority and approved exclusively for residential or condominium development.

Building
A building is a residential building if it is approved for use or approved to be used for residential purposes. Please refer to the approved use of the building that is granted by the relevant authorities during the relevant period in which the supply occur.

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Non-Residential Properties

Properties that do not fall within the definition of residential properties stated above are regarded as non-residential properties.

Common Examples

Sale of Completed Non-Residential Property

For the sale of completed non-residential property, you will normally receive an option fee, followed by a deposit when the option is exercised. The property is usually transferred to the buyer upon completion of the sale.

Booking Fee and Deposit

You must account for output tax on the option fee and deposit at the earlier of the following events:

1. When payment is received; or
2. When an invoice is issued.

Remaining Sum

For the remaining sum payable, you must account for GST at the earliest of the following events:

• When payment is received;
• When an invoice is issued;
• When property is made available to the buyer for occupation; or
• When title of property is transferred upon legal completion.

In the event that your lawyer remits the GST charged on the sale of property directly to IRAS, you are still required to report the property sale in your GST return. Specifically, you are required to report the sale value of the property (excluding GST) and the corresponding GST amount in Boxes 1 and 6 of your GST return respectively.

Sale of Non-Residential Properties Under Construction

As the property is still under construction, payments are collected progressively according to the schedule of payments specified in the agreement (e.g. based on the stage of completion of the development).

The property is usually made available to the buyer for occupation after the issuance of Temporary Occupation Permit (TOP).

Progress Payments Before TOP

You must account for output tax at the earlier of the following events:

1. When payment is received; or
2. When an invoice is issued.

Remaining Sum Once TOP is Issued

However, once Temporary Occupation Permit (TOP) is issued, you have to account for GST on the remaining sum payable at the earliest of the following events:

1. When payment is received;
2. When an invoice is issued; or
3. When property is made available (TOP is issued) to the buyer.

Lease of Non-Residential Properties

For the rental of non-residential properties, you must account for output tax at the earlier of the following events:

1. When payment is received; or
2. When an invoice is issued.

Single Invoice for Multiple Monthly Rentals

When you issue one tax invoice for monthly rentals covering a number of months in advance, you must state the due date for each rental and the corresponding GST chargeable in the tax invoice.

Accordingly, you will account for GST for each rental at the earlier of the following:

1. The due date of each rental payment; or
2. When you received the rental payment.