Are Reinstatement Costs Tax Deductible for Landlords in Singapore?

A reinstatement bill lands at the worst possible moment: the tenant has moved out, the unit is empty, and nothing is coming in. The one piece of good news is that a large part of that spend can legitimately reduce your taxable rental income, if the invoice is written so IRAS can see which part is a repair and which part is an upgrade. Here is how the 2026 rules actually work.

Are reinstatement costs tax deductible for landlords in Singapore?

This matches the legal shape of the job. Reinstatement is not renovation: it removes what the tenant added and returns the unit to the condition recorded at handover, minus fair wear and tear. Nothing is improved, so the spend is revenue in nature rather than capital, and revenue expenses incurred to produce rental income are deductible.

Two limits matter. First, the expense must have been incurred solely to produce the rental income. Second, "initial repairs", the work you do to a newly bought property to make it lettable in the first place, is specifically disallowed, no matter how much it resembles reinstatement.

Which reinstatement line items does IRAS allow, and which does it reject?

Based on the allowable and non-allowable expense table published by IRAS for income from property rented out. For furnishings, IRAS allows "replacements of furnishings to its original state" but not "new improvements/additions made to furnishings", and never allows depreciation.

The practical consequence is about paperwork, not tax law. If your contractor gives you one line reading "reinstatement works, S$6,800", you cannot show which part restores and which part improves. Ask for the quote to be itemised by task, and to keep any upgrade you have chosen to bundle in on separate lines. Our guide to comparing reinstatement quotations covers what a properly itemised scope looks like.

What happens if I keep the tenant's deposit to pay for reinstatement?

Worked example. Your tenant leaves damage, you forfeit S$3,600 of a S$10,000 deposit, and the make-good work costs S$4,200 including GST. You declare the S$3,600 as gross rent and claim the S$4,200 as an expense, leaving you S$600 better off on the tax line and S$600 worse off in cash. Landlords who forget the first half of that entry are the ones who get corrected later.

If the tenant disputes the deduction, keep the correspondence with the quote. The evidence that supports a deposit claim is the same evidence that supports the tax deduction, and the betterment rule that stops you charging a tenant for an upgrade is the same principle that stops you deducting one.

Can I claim reinstatement done while the unit is empty between tenants?

This closed a real gap. Before YA 2022, work squeezed into the empty weeks after one tenant left and before the next arrived sat awkwardly outside the rental period. It now qualifies, provided you can show the marketing effort: the agent's listing, the enquiries, the viewing log. Keep them, because "reasonable efforts" is the condition being tested, not the repair itself.

Costs of securing the tenant are separately allowable. From YA 2022, agent's commission, advertising, legal expenses and stamp duty to obtain, grant, renew or extend a lease are deductible for first and subsequent tenants, but not for a lease whose term exceeds 3 years. Our stamp duty guide covers how that duty is calculated.

Should I claim actual expenses or the 15% deemed rental expenses?

Here is the same landlord under both methods. Gross rent of S$5,000 a month for the full year, mortgage interest of S$12,000, and a lease that ended with a reinstatement.

Deemed expenses are 15% of gross rent, so S$60,000 x 15% = S$9,000, with mortgage interest still claimable on top. Actual expenses here total S$12,880, a difference of S$3,880 in taxable income.

Three restrictions decide whether the deemed route is even open to you. It applies only to tenanted residential property, so a shophouse or office is on actual expenses only. You must apply the same method across all of your tenanted residential properties in the same year, so you cannot claim actual on the unit you reinstated and deemed on the others. And it is unavailable if you incurred no deductible expense apart from mortgage interest, or if the rental income came through a partnership or a property held on trust.

Does the GST on my contractor's invoice change what I can claim?

Only contractors whose taxable turnover exceeds S$1 million must register for GST, so quotes from smaller firms may carry no GST at all. That is a genuine 9% price difference on the same scope, and it is worth knowing which you are comparing before you read the bottom line. It is one of the costs that surprises landlords late in the process.

What records do I need to keep, and for how long?

1. The itemised quote and final invoice, with restore-to-original work separated from any upgrade.
2. The move-in inventory and the handover photographs, which prove the original state you restored to.
3. The deposit settlement note showing how much was forfeited and against which items.
4. Proof of marketing effort if the work happened during a vacancy between leases.
5. Payment records, matched to the invoice, in the calendar year the expense was incurred.

Timing follows the year, not the tenancy. Reinstatement paid for in 2026 belongs to Year of Assessment 2027. For reference, YA 2026 filing ran from 1 March to 18 April 2026 on myTax Portal.

What happens if I claim something I should not have?

The realistic risk for a landlord is not evasion, it is classifying an upgrade as a repair because the invoice never separated them. If you spot an error, IRAS may waive the penalty where a voluntary disclosure is made within a grace period of one year from the statutory filing date. Fixing it yourself is far cheaper than being found.

One last point that catches people out: a rental loss cannot be set against your employment income or carried forward. As an administrative concession, you may use a loss on one property against taxable rental income from another in the same year, provided all the properties were let at market rates.