It is no secret that we have a greying population here in Singapore and according to the Singapore Department of Statistics, around 88.9% of the resident population lives in owner-occupier households. Amongst them, around 78.3% live in HDB flats. HDB flat owners, aside from selling the flat, also have the option of monetising their flat by either renting out the entire unit or any of their spare bedrooms (s) to supplement their retirement needs.
Before a flat owner can rent out his flat, they must fulfill certain terms and conditions. These measures aid in maintaining a conducive and harmonious living environment in HDB estates for all as these HDB flats are where a majority of our population calls home.
Here are the conditions that potential landlords need to meet in order to rent out their HDB flats or bedrooms.
Eligibility Requirements To Rent An HDB Flat And Bedroom
There are a few conditions that flat owners need to know about before they can rent their HDB property.
First, the flat owner must fulfill their minimum occupation period (MOP) before they are allowed to rent out their entire HDB flat. This is five years for both new BTO flats and resale flats.
If the flat owner only wants to rent out the bedrooms, there is no MOP requirement.
Second, only Singapore Citizen (SC) flat owners can rent out the entire house, whereas Singapore Permanent Residents (SPRs) can only rent out their bedrooms.
Third, for the rental of bedrooms, a flat owner of a 3-room flat can only rent out one bedroom, and a flat owner of a 4-room or bigger is allowed to rent out up to two bedrooms. Therefore, flat owners are not allowed to rent out all the bedrooms individually in a flat.
Furthermore, a flat owner who wishes to rent out the bedrooms must stay with the tenants along with any authorised occupants. The flat owner cannot circumvent this rule by locking up a room and renting out the rest of the flat. The Housing Development Board (HDB) can revoke the approval for renting out bedrooms if the flat owner is found to have flouted this condition.
Flat owners of 1-room and 2-room HDB flats are only allowed to rent out their whole house; they cannot choose to only lease out their bedroom. These rental conditions are not applicable to those living in 1-room rental flats or 2-room Flexi flats, as they are not allowed to rent out the whole house or any of the rooms from the beginning.
| Flat Type | Maximum Number Of Bedrooms Allowed For Renting |
| 1-room and 2-room | Not allowed to rent out the bedroom |
| 3-room | 1 |
| 4-room or bigger | 2 |
Source: HDB
Another condition that flat owners should take note of is that they cannot rent out parts of their house, like the bomb shelter or a partitioned space in the living room. Only rental of bedrooms that were originally constructed by HDB is allowed.
Read Also: 6 Lesser-Known Facts About Minimum Occupation Period (MOP) For Singaporeans
Who Is Eligible To Rent An HDB Flat And Bedroom
Next, we look at who would be qualified to rent the HDB flat.
There are three groups of people who can rent HDB flats:
- Singapore Citizens,
- Singapore Permanent Residents, and
- non-citizens who are legally residing in Singapore and have Employment Passes, S Passes, Work Permits, Student Passes, Dependent Passes, or Long-Term Social Visit Passes. The passes must have a validity period of at least 6 months as of the date of application.
There are no restrictions on Malaysian work permit holders from renting the whole HDB flat or rooms. However, for all non-Malaysian work permit holders from the construction, manufacturing, and process sectors, they are only allowed to lease rooms and cannot rent out the whole flat.
Before a flat owner decides to advertise their flat for lease, they should check on the Non-citizen Quota to determine whether they can rent out to non-Malaysian non-citizens. The quota is set at 8% at the neighbourhood level and 11% at the block level. Once the quota is reached, the flat owner can only rent out to Singaporeans and Malaysians. However, this non-citizen quota limit does not apply, if only the bedrooms are rented out.
HDB has a minimum rent period of 6 months to 2 years. Therefore, flat owners are not allowed to rent out their HDB flats to tourists as their passes usually have a validity period of 30 days, which violates the HDB minimum rent period.
The maximum rent period can be extended to 3 years only if all the tenants are Singaporeans or Malaysians.
Only A Maximum Of 8 People Can Occupy An HDB Flat
From 22 January 2024 to 31 December 2026, the occupancy cap for 4-room and bigger HDB flats is temporarily revised higher to 8 people from 6 people. This occupancy limit applies to flat owners renting out their flats or bedrooms to unrelated persons.
This means that, for the rental of bedrooms, if the flat owner and the authorised occupiers consist of 7 people, then the spare bedroom can only be rented out to one more person.
For the 1-room and 2-room HDB flats, the occupancy is capped at 4 people, and for the 3-room flats, at 6 people.
Source: HDB – Occupancy Cap for HDB Flats and Bedrooms Being Rented Out
What To Know Before Advertising an HDB Flat
The next step, after finding out who is eligible to rent your HDB flat, is to determine the rental rate.
Fortunately, HDB provides the HDB rental rates of whole flats rented out by flat owners in the past year, which allows potential landlords to make informed decisions before entering into a rental contract. HDB’s Market Rental Rates, allow selection of up to 20 blocks based on location and flat type.
Unfortunately, HDB does not provide the past transacted HDB room rental rates, and landlords can only make inferences from the whole flat rental rates.
At this stage, the prospective landlord has to decide whether to engage the services of a professional real estate salesperson or to Do-It-Yourself (DIY).
If you are doing it yourself, you can advertise on popular property portals like PropertyGuru, 99.co or other marketplace platforms like Carousell.
Giving the flat a fresh coat of paint and fitting it with tasteful furniture and fittings when advertising the flat will boost its attractiveness to potential tenants, making it easier to market for higher rates and for a faster take-up.
Furthermore, when writing your advertisement description, it is good to provide any relevant information on the property and also on the group of tenants that qualify. One should avoid making any remarks that are discriminatory, offensive or stereotyped in nature against any particular race, religion or group in society.
Read Also: Selling, Buying or Renting Property? 5 Reasons Why You Need A Contract In Black & White With Your Property Agent
Pre-Qualify Prospective Tenants and Handle Viewings
This is probably the step that most DIY landlords would dread. Given the rise of unsolicited calls, it might be wise to have a separate phone line just to communicate with potential tenants.
It takes some level of experience to pre-qualify potential tenants from all the calls. However, once the potential tenants have been vetted, they will want to view the flat.
Once both the landlord and the prospective tenant have agreed principally on the rent, the tenant’s documents must be checked for validity.
For both Singaporean and non-Singaporean tenants, such as those on student pass or long-term social visit pass, their documents can be verified on ICA’s website.
For Work Permit, S Pass, or Employment Pass holders, their documents can be checked on MOM’s website. While, for those tenants who are on Student Pass or Long Term Social Visit Pass, their documents can be verified on the ICA website.
These checks must be performed on potential tenants even if the flat is rented to a company that intends to house its employees.
Landlords can use the checklist provided by the Council of Estate Agencies (CEA) for the rental of HDB flats prior to the tenancy agreement stage.
Receiving LOI, Registering With HDB And Signing Tenancy Agreement
Upon the verification, including the request by the tenant for the landlord to verify that he is the actual flat owner, this would be followed by a Letter of Intent (LOI). It is often the precursor to the tenancy agreement and is not a binding agreement, unlike the latter.
The LOI usually states the rental price, the lease duration and the parties involved and is usually accompanied by a good faith deposit. This amount will become the security deposit when the tenancy agreement is signed.
The security deposit is usually 1-month’s rent for a one-year lease and 2-month’s rent for a two-year lease.
Flat owners must obtain HDB’s approval before they can rent out their flat. They can submit the application through My HDBPage, which charges an administrative fee of $20 for the whole flat or $10 per bedroom, if only the rooms are rented out.
Landlords can use the widely adopted standard tenancy template provided by the Council of Estate Agencies (CEA). Both the landlord and tenant can make any amendments to the template that they have agreed upon.
Read Also: Four Truths About Tenancy Agreements That Every Home-Seeker Should Know
Prepare The Inventory List And Walk-Through With Tenant Before Handover For Fully-Furnished Units
If you are renting with fittings (sofa set, dining table, beds) and fixtures (aircon, water heater), then it would be good to prepare an inventory list by each (bed/living/bath) room and attach it to the tenancy agreement, with a copy given to the tenant. This ensures that there will be no confusion about the ownership of the items at the end of the lease.
Furthermore, having photos of each item will also aid in any dispute over the condition of the items that were received and returned by the tenant.
Read Also: 6 Unexpected Cost Areas Singaporeans Should Look Out For When Buying A House (Whether It Is A HDB, Condo Or Landed Property)
Flat Owners Must Comply with the Terms And Conditions
Lastly, flat owners who have rented out their HDB flats or bedrooms must ensure they stay in compliance with HDB’s terms and conditions. Any unauthorised rental could result in a financial penalty or the compulsory acquisition of the flat by HDB.
Therefore, flat owners must ensure they obtain the necessary approval to rent out their flat, which includes future lease extensions. And, they should stay vigilant by conducting regular checks to ensure all the rules and regulations are being met.
Now You Are A Landlord, You Are Required To Pay Taxes
Congratulations, you are now a landlord. However, before you start counting the dollars, know that you will now be required to pay tax on your rental income earned from renting out the flat or bedrooms.
If the property is under sole ownership, then the sole owner of the HDB flat will be taxed at 100% of the rental income. Whereas, if the property is under joint tenancy, then the rental income is taxed on all the joint owners based on their legal share in the HDB flat.
On the upside, property owners who lease their residential flats will enjoy the convenience of pre-filled rental expenses of 15% of the gross rent in their online tax form and they can also claim mortgage interest on the loan taken to finance the property.
With that, you now have an overview of the requirements for renting your HDB flat.
Read Also: Complete Guide To Property Tax For Homeowners In Singapore
Cover image by Moo Kar Ming, DollarsAndSense
This article was originally published on 15 March 2022 and updated with new information.
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