Take a S$1,500,000 condo rented at S$4,500 a month, with S$9,000 a year in MCST maintenance fees, property tax, and insurance, and a 3 percent vacancy allowance. Gross annual rent is S$4,500 times 12, which is S$54,000. Divided by the S$1,500,000 price, that is a gross yield of 3.60 percent, in line with the modest gross yields typical of Singapore private homes.
The net yield tells the fuller story. Allowing for 3 percent vacancy leaves effective rent of S$52,380, and after the S$9,000 of annual costs the net income is S$43,380. Against the S$1,500,000 price that is a net yield of 2.89 percent. The roughly 0.7 percentage point gap between gross and net is the drag from costs and void periods, and it is why many Singapore investors accept low running yields in the expectation of capital growth.
Item
Amount
Gross annual rent
S$54,000
Less 3 percent vacancy
S$52,380
Less annual costs
S$43,380
Gross yield
3.60 percent
Net yield
2.89 percent
How it is calculated
Gross annual rent is the monthly rent times twelve, and the gross yield is that figure divided by the property price. For the net yield, the tool first reduces gross rent by the vacancy percentage to get effective rent, the income you actually collect across a year with some void periods. It then subtracts your annual running costs, here MCST maintenance, property tax, and insurance, to get net income, and divides that by the price for the net yield. The calculation is based on the purchase price, not on the equity you put in, so a geared investor’s return on cash can differ. It also excludes one-off entry costs such as Buyer’s Stamp Duty and any ABSD, agent commission on a new let, and income tax on the rent, all of which lower the true return further.
Frequently asked questions
What is a typical Singapore rental yield?
Gross rental yields on Singapore private homes are often a low 3-4%, with net yields a percentage point or so lower after maintenance fees, property tax, and agent commission. Many investors accept low yields expecting capital growth in a supply-constrained market.
How does IRAS tax rental income in Singapore?
Rental income is taxable in the hands of the property owner at personal income tax rates of 0-24% for residents (scale applying from 2024 onwards). IRAS allows deductions for mortgage interest, property tax paid, fire insurance premiums, maintenance and repair costs, and agent commission. Capital expenditure such as renovations is generally not deductible, though annual allowances may apply in some cases.
What property tax rate applies to a rented-out residential property in Singapore?
For non-owner-occupied residential properties, IRAS charges progressive property tax rates on the Annual Value. From 2025, the rates range from 12% on the first S$30,000 of AV up to 36% on AV above S$90,000. The Annual Value is the estimated annual rent the property could fetch if rented unfurnished, set by IRAS, not the actual rent collected. Owner-occupied properties attract a lower scale of 0-32%.
Do CPF funds affect the rental yield calculation?
CPF does not directly appear in a yield calculation because yield measures annual rental income against the purchase price. However, if you used CPF Ordinary Account savings to fund the purchase, IRAS and HDB rules require those CPF monies (with accrued interest at 2.5% per annum) to be refunded to your CPF account on sale, which affects your actual net cash proceeds. For HDB flats, subletting rules also require owners to occupy the flat for a minimum occupation period before the whole unit can be rented out.