Disclaimer (Block 1): This article is for educational purposes only and is intended to assist CEA-registered property agents in understanding regulatory frameworks. It does not constitute financial, tax, or legal advice. LEVR's calculations are indicative only. Always verify rates and eligibility with your bank, HDB, CPF Board, or a licensed financial advisor before advising clients.
The Three Categories of Furnished Property
Singapore rental listings use three broadly understood categories, though there is no statutory definition of each. Agents and landlords should define the category clearly in the tenancy agreement to avoid disputes at end of tenancy.
Fully Furnished
A fully furnished unit is move-in ready without the tenant needing to purchase any major items. Typical inclusions:
- All bedroom furniture: bed frames, mattresses, wardrobes, bedside tables.
- Living room furniture: sofa, coffee table, dining table and chairs.
- Kitchen appliances: refrigerator, washing machine (or dryer), microwave, built-in hob and hood.
- Air-conditioning units in all bedrooms and living areas.
- Water heaters in all bathrooms.
- Basic fixtures: curtains or blinds, light fittings, television (sometimes).
Fully furnished units command the highest rental premium and are most popular with expatriates on corporate relocation packages, short-term assignees, and tenants who are not intending to stay long-term.
Partially Furnished
A partially furnished unit typically includes built-in fixtures and appliances but not all moveable furniture. Common in this category:
- Air-conditioning units.
- Built-in kitchen (hob, hood, oven if developer-installed).
- Refrigerator and washing machine.
- Water heaters.
- Curtain tracks or blinds (but not necessarily curtains).
- Light fittings.
Moveable furniture — beds, wardrobes, sofas, dining sets — is typically not included. Partially furnished is common for longer-term tenants who prefer to bring their own furniture or purchase to their own taste.
Unfurnished
An unfurnished unit contains only the bare structure and any fixtures integral to the unit. This typically means:
- Air-conditioning units (if built-in by developer).
- Built-in kitchen (developer-installed cabinetry and hob/hood if included in developer handover).
- Water heaters.
- Light fittings.
No appliances or furniture are included. The tenant furnishes the unit themselves. Unfurnished listings are rare in Singapore’s private rental market but are more common for long-term corporate tenants or tenants renting from individual owners who have removed furniture for personal use.
Rent Differential: Furnished Premium
Fully furnished units typically command a rental premium of 10–20% over comparable unfurnished units in the same development, though this varies significantly by:
- Quality of furnishing — budget furniture adds minimal premium. High-quality branded appliances and designer furniture can support a larger premium.
- Target tenant profile — expat tenants on corporate packages are more willing to pay a furnishing premium. Local tenants and long-term tenants typically prefer to furnish at their own taste and may resist paying for furnishing they did not choose.
- Market conditions — in a tight rental market, furnished units move faster. In a tenant’s market, furnishing preference varies more.
Landlords should consider the cost of maintaining furnished items (appliance servicing, furniture replacement) against the rental premium. An older sofa or malfunctioning appliance that is included in the listing creates a maintenance obligation, not a premium.
The Inventory List: Essential for All Furnished Tenancies
For any tenancy that includes furniture or appliances, an inventory list is essential. The inventory list:
- Documents every item included in the tenancy at commencement, with a description of condition (e.g., “3-seater sofa — fair condition, minor fabric wear on right armrest”).
- Is signed by both landlord and tenant at the commencement walk-through.
- Forms the baseline against which condition is assessed at end of tenancy.
- Should include photographs, ideally date-stamped, attached as an exhibit.
Without an inventory list, it is very difficult for a landlord to make a valid deduction from the security deposit for damaged or missing items at end of tenancy. Tenants can credibly dispute any claim that the damage was pre-existing. Agents acting for landlords should make preparation of the inventory list a standard part of the pre-tenancy checklist.
Wear and Tear vs Damage
Singapore tenancy agreements and SCT decisions consistently distinguish between fair wear and tear (not chargeable to tenant) and damage beyond normal use (chargeable). The distinction matters for deposit deductions:
- Fair wear and tear: Minor scuffs on walls from furniture, light surface marks on flooring consistent with 2 years of use, fading of curtains from sunlight.
- Chargeable damage: Large holes in walls, broken hinges, cracked tiles, missing furniture items, burns on countertops, torn upholstery from misuse.
Agents should explain this distinction clearly to both landlords and tenants at the start of the tenancy to prevent end-of-tenancy conflicts. Landlords who attempt to charge tenants for fair wear and tear are likely to lose at SCT if the tenant disputes.
Tenancy Agreement Clauses for Furnished Tenancies
The tenancy agreement for a furnished unit should include:
- Inventory schedule — typically annexed as a schedule to the TA, listing all furnished items, quantities, and condition at commencement.
- Repair and maintenance obligations — who is responsible for: air-conditioning servicing (typically tenant responsibility on a quarterly schedule), appliance repairs (typically landlord for appliances provided, tenant for items under $150–200 per repair), structural repairs (landlord).
- Replacement obligation — if a provided appliance fails beyond repair, is the landlord obligated to replace it? If so, at what standard? This should be specified rather than left to negotiation at crisis point.
- Reinstatement at end of tenancy — whether the tenant must return the unit in the same furnished condition (all inventory items present and in similar condition accounting for fair wear and tear) or whether some changes are permitted.
Furnished Tenancies and GST
Residential rental — whether furnished or unfurnished — is exempt from GST. Landlords who are GST-registered for other business activities do not charge GST on residential rental income. However, if a rental arrangement includes significant non-residential services (e.g., hotel-style cleaning, concierge services), the arrangement may be recharacterised as a service supply subject to GST. Standard residential furnished tenancies are unaffected by this.
Furnished Tenancies and IRAS Income Tax
Rental income — regardless of whether the unit is furnished — is assessable income for IRAS. Landlords can deduct allowable expenses against rental income, including:
- Mortgage interest (for the period the property is rented).
- Property tax paid during the rental period.
- Maintenance and conservancy charges.
- Agent’s commission.
- Fire insurance premium.
- Repair and maintenance costs for the rental property.
IRAS does not allow a capital allowance deduction for furniture and appliances in residential rental. The cost of purchasing or replacing furniture is not directly deductible as a capital expense — only the cost of repairs to existing assets is deductible as maintenance. Landlords who ask agents about the tax treatment of furniture purchases should be directed to a tax adviser.
Frequently Asked Questions
Q: The landlord wants to include old furniture at no discount to the asking rent. How should I advise them?
A: Old or poor-quality furniture adds no real value to a furnished tenancy and may deter quality tenants. Agents should advise landlords to either refresh the furniture (especially mattresses and sofas), remove it and relist as partially furnished at an adjusted rent, or price the premium carefully. A unit marketed as 'fully furnished' with a 15-year-old sofa and a broken appliance will struggle against comparable listings with newer fittings.
Q: Who pays for air-conditioning servicing — landlord or tenant?
A: By convention in Singapore and in most standard tenancy agreements, the tenant is responsible for air-conditioning servicing costs on a quarterly basis during the tenancy. The landlord is typically responsible for capital repairs — e.g., replacing a compressor or a complete unit. Agents should ensure the TA clearly states the quarterly servicing obligation (with a requirement to produce service records) to avoid disputes at end of tenancy when the landlord claims the aircon was not serviced.
Q: Can a landlord deduct furniture replacement cost from the security deposit?
A: Yes, if the item was damaged beyond fair wear and tear during the tenancy and the damage is documented. The deduction should reflect the depreciated value of the item, not the cost of a new replacement. An item that was 5 years old when the tenancy started cannot be replaced at the cost of a new equivalent — the tenant is only liable for the residual value at the time of damage. Agents should advise landlords to keep purchase receipts and apply reasonable depreciation in any deposit deduction claim.
Q: Should I include a clause requiring the tenant to replace missing inventory items at end of tenancy?
A: Yes. The tenancy agreement should state that at end of tenancy, all inventory items listed in the schedule must be returned in the same condition (fair wear and tear excepted). If an item is missing, the landlord is entitled to charge the replacement cost of a comparable item at current market prices. This must be anchored to the inventory list — without a signed inventory, there is no evidentiary basis for the claim.
Q: Does a furnished tenancy affect the stamp duty payable?
A: No. Stamp duty on a residential tenancy agreement is based on the monthly rent and the lease term, regardless of whether the unit is furnished. The stamp duty rate is 0.4% of the total rent for leases up to 1 year, and scales for longer terms. The furnishing status does not affect the stamp duty calculation.
Disclaimer (Block 3): LEVR's calculator outputs are estimates based on inputs provided and current regulatory parameters as known at time of publication. They are not a guarantee of borrowing capacity, stamp duty liability, or CPF eligibility. Regulatory thresholds and rates may change. Always verify with IRAS, your bank, or a licensed financial advisor before making financial decisions.