Example 2: How to compute taxable rent if you sub-let a room
You are living in a 4 room flat with 3 bedrooms. You sublet 1 of the rooms to your tenant from 1 Jan to 31 Dec 2012. Your tenant pays you rent of $600 per month. In addition, the total amount of deductible expenses incurred is $3,000.
Your net rent is calculated as follows:
Gross Rent for the year 2012 : $600 x 12 = $7,200
Total claimable expenses incurred : $3,000
Total number of rooms in your property : 3 rooms
Total number of rooms rented out : 1 room
Proportion of claimable expenses allowed : $3,000/3 x 1 = $1,000
Net Rent = Gross Rent – Proportion of claimable expenses allowed
= $7,200 - $1,000
= $6,200
