Important Note: The issuance of notices of cash grant under the Rental Relief Framework has concluded.
The COVID-19 (Temporary Measures) (Amendment) Act (“Act”) that was passed in Parliament on 5 June 2020 provides a rental relief framework for Small and Medium Enterprises (SMEs) and specified non-profit organisations (NPOs). This rental relief framework under Part 2A of the Act and the COVID-19 (Temporary Measures) (Rental and Related Measures) Regulations 2020 (“Regulations”) came into force on 31 July 2020.
The rental relief framework provides for mandated equitable co-sharing of rental obligations between the Government, landlords and tenants. This aims to help affected SMEs that need more time and support to recover from the impact of the COVID-19 pandemic. In the long term, landlords stand to benefit from the recovery of SME tenants, as this will ensure the continued viability of the rental and property market. The framework will also cover eligible NPO tenants.
These measures are intended to establish a baseline position for the handling of tenants’ rental obligations. Landlords and tenants are encouraged to work out mutually agreeable arrangements that best address their specific circumstances.
Eligible SMEs and NPOs who are tenant-occupiers will benefit from the rental relief framework as summarised in the table below. Please refer to the next section for details of the eligibility criteria. The full categorisation of properties can be found here.
Footnotes1 2 3 4
The rental relief framework, comprising the Rental Relief and the Additional Rental Relief, applies to eligible tenant-occupiers in qualifying leases or licences that are in writing, or evidenced in writing, which are:
a) (i) Entered into before 25 March 2020; or (ii) entered into before 25 March 2020 but expired and renewed either automatically or in exercise of a right of renewal in the contract; and
b) In force at any time between 1 April and 31 July 2020 for qualifying commercial properties, and between 1 April and 31 May 2020 for other non-residential (e.g. industrial/office) properties.
Tenant-occupiers must fall within one of the following categories to be eligible for Rental Relief:
a) Small and Medium Enterprises (SMEs) with not more than S$100 million in annual revenue for the Financial Year 2018 or a later appropriate period where applicable, at the individual or entity level5; or
b) The following types of Non-Profit Organisations (NPOs) with not more than S$100 million in annual revenue for the Financial Year 2018 or a later appropriate period where applicable, at the entity level:
i. Registered or exempt charities (as provided in the Charities Act);
ii. Members of the National Council of Social Service;
iii. National sports associations;
iv. National disability sports associations;
v. Specified arts and culture societies; or
vi. Specified trade associations.
Additional Rental Relief
The Additional Rental Relief will apply to tenant-occupiers who qualify for Rental Relief, have carried on business before 25 March 2020 and meet the following additional criteria:
a) For SMEs
i. (Note: this additional criterion is not applicable if the tenant-occupier is a stand-alone company that is not part of any group of companies) Where 50% or more of the total voting shares or power in the tenant-occupier is held by a Singapore-incorporated entity (i.e. it is a subsidiary of another entity incorporated in Singapore) and the tenant-occupier is a member of a Singapore group of entities6 during the period 1 April to 31 May 2020, the group’s aggregate revenue is not more than S$100 million for the Financial Year 2018 or a later appropriate period where applicable7; and
ii. The tenant-occupier suffered at least a 35% drop in average monthly gross income at the outlet level for the period 1 April to 31 May 2020, compared to 1 April to 31 May 2019, or alternative periods if the tenant-occupier was not operational as of 1 Apr 20198.
b) For NPOs: The tenant-occupier suffered at least a 35% drop in average monthly gross income at the entity level for the period 1 April to 31 May 2020, compared to 1 April to 31 May 2019, or alternative periods if the tenant-occupier was not operational as of 1 Apr 20199.
Notice of cash grant
Since early August 2020, the Inland Revenue Authority of Singapore (IRAS) has been issuing notices of cash grant to qualifying property owners, i.e. owners of property with eligible tenant-occupiers10. All qualifying property owners would have received the notice, and no further notices will be issued. The notice informs property owners of the rental waivers they should provide to their tenants.
Property owners will be required to serve a copy of the IRAS notice on their tenants within four working days of receipt of the notice, so that tenants will have timely confirmation that they are eligible for the rental waivers. Service of the notice may be done in person or via registered post or email.
a) Where a property has been sublet, the lessor, i.e. an intermediary landlord, must also serve a copy of the notice on its tenant within four working days of receiving the notice from the property owner, and provide the necessary rental waivers.
b) Where possible, property owners should also serve a copy of the notice on the end-tenant-occupier directly.
Once the property owner receives the notice of cash grant, the applicable rent and any interest payable on the rent is waived under the Act. Tenants do not need to pay rent for the months covered by the rental relief framework, unless other factors apply. For example, in cases where landlords have earlier provided assistance to their tenants or reached an agreement to provide assistance to their tenants, in the form of monetary payments or reduction of payments due under the lease agreement, these can be offset from the landlords’ rental waiver obligations. Please refer to this for details of these factors.
Application of rental waiver
If rent had already been paid, the rental waivers should be applied to the next immediate month(s) of rent. In other words, the tenant will not need to pay rent for the next immediate month(s). If this is not possible, tenants may obtain a refund from their landlords.
Where a property (with an eligible end-tenant occupier) has been sublet, the lessor (i.e. intermediary landlord) will receive rental waivers as well, regardless of whether they themselves meet the eligibility criteria, and is in turn obliged to provide the necessary rental waivers to its tenant.
The rental relief framework is intended to establish a baseline position for the handling of tenants’ rental obligations. Landlords and tenants are strongly encouraged to work out mutually agreeable arrangements that best address their specific circumstances.
Support for landlords
We recognise that the COVID-19 pandemic has also impacted landlords, in particular individuals who rely on the income from their rental property for their livelihood. While there is Government assistance for the Rental Relief that landlords have to provide to tenants, some may find it difficult to provide the full Additional Rental Relief.
Landlords who meet all the following criteria may apply to a rental relief assessor to reduce the amount of Additional Rental Relief they have to provide:
a) The applicant landlord must be an individual or a sole proprietor, and the owner of the prescribed property;
b) The aggregate of the annual value of all investment properties (including the prescribed property) owned by the landlord (whether directly or through one or more investment holding companies) is not more than S$60,000 as at 13 April 2020; and
c) The rental income derived from all the properties that the landlord must provide Additional Rental Relief for in Year of Assessment 2019 or a later appropriate period11 constituted 75% or more of the landlord’s gross income in that period.
If the landlord meets the grounds of financial hardship above, the rental relief assessor may halve the amount of Additional Rental Relief to be borne by the landlord, i.e. one month’s rental waiver for qualifying commercial properties, or half a month’s rental waiver for other non-residential properties (e.g. industrial and office properties). The remaining rent payable will be borne by the tenant.
If a prescribed property has multiple co-owners, each of the co-owners that derive rental income from the prescribed property during the rental relief period must satisfy all the eligibility criteria on the grounds of financial hardship, and submit an application to the rental relief assessor as provided for in the Registrar’s directives.
If a landlord and tenant-occupier are unable to reach a compromise, the property owner and/or any intermediary landlord(s) may make an application for assessment, which must be accompanied by documents and information as specified in the Registrar’s directives, which will be uploaded on this website in due course. The application must be made within 10 working days after receiving (a copy of) the notice of cash grant, to have a rental relief assessor ascertain any of the following:
a) Whether the tenant-occupier is eligible for Rental Relief and/or Additional Rental Relief; and/or
b) Whether the applicant landlord qualifies to provide only half the Additional Rental Relief, on the basis of financial hardship.
c) The amount of maintenance and service charges12, especially where such charges are not explicitly listed in the lease or licence agreement
d) The amount that can be offset by assistance provided by the landlord earlier
e) Tenant(s) occupying the property for only a part of the relief period
f) Sub-division of the property, i.e. there are multiple sub-tenants, not all of whom may be eligible for the waivers
The rental relief assessors are only able to make determinations relating to the amount of rent to be waived under the framework for unresolved disputes. The assessors will not review existing arrangements that have been mutually agreed upon between landlords and tenants on the implementation of the rental waivers.
Please refer to https://go.gov.sg/rentalreliefassessment for further information on the application for assessment.
1. The rental waivers in the table are applicable in cases where the tenant-occupier occupies the property throughout the relief period. Please click here for details of the application of the rental waivers in cases where the tenant-occupier does not occupy the property throughout the relief period. Tenant occupiers may use the online rental relief calculator to estimate the rental waivers they are eligible for. ↩
2. This is referred to in the COVID-19 (Temporary Measures) (Rental and Related Measures) Regulations 2020 as “Type A Property”. The definition of a Type A property can be found in Part 2 of the First Schedule of the Regulations. ↩
3. This is referred to in the COVID-19 (Temporary Measures) (Rental and Related Measures) Regulations 2020 as “Type B Property”. The definition of a Type B property can be found in Part 3 of the First Schedule of the Regulations. ↩
4. Owners of the prescribed properties will receive Government assistance through: (a) the Property Tax Rebate for Year 2020 announced in the Unity and Resilience Budgets; and (b) the Government cash grant announced in the Fortitude Budget. For more details, please refer to IRAS’s website at https://go.gov.sg/governmentcashgrant. ↩
5. Please refer to Regulation 2 of the COVID-19 (Temporary Measures) (Rental and Related Measures) Regulations 2020 for the definition of “entity”. ↩
6. A Singapore group of entities means a group of entities that are incorporated or established in Singapore and which are related through ownership or control in such a way that the group is either required to prepare consolidated financial statements for financial reporting purposes under FRS 110 or an equivalent standard or would have been so required if equity interests in any of the entities were traded on any stock exchange in Singapore. ↩
7. Where none or only one member of the Singapore group of entities has carried on business for 12 months or longer as at the last day of the group’s financial year ending on a date in the year 2018, and more than one member of the same group has carried on business for 12 months or longer as at the last day of the group’s financial year ending on a date in the year 2019, the reference period will be FY2019 instead. If the foregoing is inapplicable, if more than one member of the Singapore group of entities has carried on business for 12 months or longer as at the last day of the group’s financial year ending in the year 2020 on a date that is on or before 31 March 2020, the reference period will be FY 2020. For any other case, the aggregate average monthly revenue of all members of the group will be extrapolated for comparison against the S$100 million revenue threshold. Please refer to Regulation 14 of the COVID-19 (Temporary Measures) (Rental and Related Measures) Regulations 2020 for further details. ↩
8. If the tenant-occupier commenced business after 1 April 2019, comparison will be against the period from the date of commencement of business to 24 March 2020 (both dates inclusive) to ascertain the decrease of 35% or more. ↩
9. Please refer to Footnote 8 for further information. ↩
10. The notices are available for qualifying property owners to view on IRAS’ myTax Portal, and will also be sent via hard copy to property owners with eligible tenants. ↩
11. If the lease commenced in 2018 or earlier, and the landlord was required to file an income tax return in YA2019, the period will be YA2019. If the lease commenced in 2019, and the landlord was required to file an income tax return in YA2020, the period will be YA2020. In any other case, the relevant period will be the rental relief period, i.e. 1 April to 31 July 2020 for qualifying commercial properties, or 1 April to 31 May 2020 for other non-residential properties. ↩
12. Maintenance and service charges are excluded from the rental waivers. ↩