You’ve just purchased a brand-new luxury condominium—congratulations. Whether it’s the lush, nature-adjacent serenity of Upper Thomson Road Condo Parcel A development or the sleek waterfront sophistication of Tanjong Rhu Road New Condo latest launch, your new asset isn’t just a home. It’s a future income generator. But before you list your condo on PropertyGuru and start fantasizing about passive rental checks, there’s a critical reality check: renting isn’t just rent minus mortgage. It’s a careful balance of costs, fees, and taxes that can significantly impact your returns.
Let’s break down the true financial landscape of renting out these two premium new launches.
Table of Contents
📍 The Properties: A Snapshot
- Upper Thomson Road New Condo (Parcel A)
Nestled amidst greenery and close to upcoming transport upgrades, this freehold development (subject to change based on actual grant) targets families and young professionals seeking tranquility with convenience. With projected rental demand from nearby schools and healthcare hubs, it’s poised as a long-term rental play.
- Tanjong Rhu Road New Condo
Coastal luxury meets city access. With panoramic views of Marina Bay and proximity to the city center, this leasehold property (typically 99-year) appeals to expatriates and high-income tenants. Waterfront living commands premium rents—but also premium expectations.
💰 The Obvious Costs: What’s Coming Out of Your Pocket
- Mortgage Servicing (if applicable)
Even with rental income, if you’re still paying off your mortgage, it’s your top cost. New launch mortgages often come with initial fixed rates or bank promotions—but remember, interest rates may rise. Factor in at least S$2,500–S$5,000/month depending on loan size.
- Service & Conservancy Charges (Sinking Fund Included)
As a newer development, both condos will have higher maintenance fees due to premium facilities (infinity pools, gyms, concierge, smart-home tech).
- Upper Thomson: ~S$350–S$500/month
- Tanjong Rhu: ~S$400–S$700/month (luxury expectations = higher costs)
- Home Insurance & Fire Insurance (Mandatory for HDB/Financer Rules)
Protect your investment. While banks often bundle this into mortgage packages, expect S$300–S$600/year for comprehensive coverage.
- Interior Wear & Tear Repairs
Even with good tenants, furniture scratches, HVAC servicing, and appliance replacements add up. Set aside 3–5% of annual rent for upkeep.
- Property Management Fees (Optional but Recommended)
Managing a condo remotely is tough. Hiring a property manager can cost 8–12% of monthly rent but saves time and rental void periods.
- Vacancy Costs
The biggest silent killer of returns. Even in strong markets, expect 1–2 months of vacancy per year. For a S$7,000/month rental, that’s S$14,000 lost annually.
🧾 The Hidden Tax: IRAS & CPF Recovery
Here’s where many landlords get tripped up.
1. Rental Income Tax
Yes, rental income is taxable in Singapore. IRAS treats it as part of your annual income, after deducting allowable expenses.
You can claim:
- A standard 15% deduction for repairs, maintenance, insurance, and other non-itemized costs, OR
- Actual allowable expenses (mortgage interest, agent fees, renovation for rent, utilities paid by landlord, property tax, etc.)
👉 Example:
You earn S$84,000/year in rent from your Tanjong Rhu unit.
You pay S$12,000 in mortgage interest, S$7,200 in service charges, and S$1,800 in insurance.
Total allowable expenses? S$21,000
Taxable rental income = S$63,000
This amount gets added to your other income and taxed at your marginal rate (up to 22% for incomes above S$320k).
⚠️ Important Note: You cannot offset rental losses against other income in Singapore. Rental deficits (when expenses exceed rent) can only be carried forward to offset future rental profits.
2. Additional Buyer’s Stamp Duty (ABSD) Recovery Surcharges (For Non-PRs)
If you’re a foreigner or company owner buying a new condo, you paid ABSD upfront. While not refundable, IRAS may disallow the ABSD amount from being claimed as an expense—meaning you can’t deduct it from rental income for tax purposes, wiping out a potential deduction.
3. CPF Usage & Repayment
If you used CPF to pay for your downpayment or monthly instalments, you must eventually repay your CPF OA with accrued interest when you sell the property—but also when you rent it out without occupying it.
Wait—what?
If you’re using CPF for mortgage payments and not living in the property, you must repay the CPF amount used (with 2.5% accrued interest) into your OA. This isn’t a cash outflow now, but it reduces your retirement funds or future borrowing power. Consider it an opportunity cost.