Although many landlords fixate on rental yield, the bigger swing factor often sits in the tax file: a surprisingly wide range of expenses can be claimed against rental income, from mortgage interest and insurance to routine repairs and depreciation, while the biggest monthly outlay of all — loan principal — gets you nothing at tax time. After 15 years covering property, I’d say that misunderstanding is more common than most investors admit, especially among newer buyers who benchmark themselves against friends swapping condo stories over dinner.
The clearest deduction is loan interest. If the borrowing funded the purchase or improvement of a rental unit, that interest generally goes against rental income on Schedule E. The same logic can extend to a credit line or even a card balance, if you can trace the spending to the property. Points and loan fees usually don’t come off immediately; they’re amortized over the loan term. Principal, though, remains stubbornly non-deductible because tax authorities treat it as equity, not expense. You must also report each rental property separately on Schedule E, Part I, a filing requirement that many first-time landlords overlook.
Property taxes are another big one, and here’s the contrarian point: boring recurring charges often matter more than glamorous renovation spending. State and local real property taxes are generally deductible on rental accounts without the SALT cap that hits personal filings. But transfer taxes and recording fees at purchase usually go into basis instead. Insurance, too, is broader than many landlords expect. Owner policies, liability cover, flood insurance, mortgage insurance, even the rental share of an umbrella policy can count. In Singapore, the Annual Value of a property — which excludes furniture and maintenance fees — forms the basis on which property tax is assessed, meaning landlords should understand how this figure is determined to accurately account for their tax obligations.
Repairs and maintenance reward discipline. Painting, minor plumbing fixes, HVAC servicing, cleaning supplies, replacement bulbs, contractor labour — these are typically current deductions if they keep the place in working order. Major improvements are different; they’re capitalized. Depreciation also starts once the unit is available for rent, even if no tenant has moved in yet. That distinction matters just as much as location. I’m reminded of how buyers once obsessed over headline psf at launches near Lentor, while veteran landlords quietly focused on operating lines and after-tax cash flow instead.
