How to Calculate Your Property’s Return on Investment in Singapore (2026)

To calculate a property’s return on investment, add up every dollar you put in (downpayment, stamp duties, fees), every dollar the property pays or costs you each year (rent less expenses, interest, principal and tax), and what you walk away with when you sell. The single number that ties those together is the internal rate of return (IRR). In Singapore in 2026, the answer depends less on the rent and more on two things: whether you pay Additional Buyer’s Stamp Duty, and how long you hold.

At a glance

• Gross yield and net yield describe the property. Cash-on-cash return and IRR describe your deal, after the loan.
• In our worked example, a S$1.2m condo has a 3.8% gross yield and a 2.5% net yield, but the monthly cash flow after the mortgage is negative.
• With no ABSD and 2% a year price growth, the five-year IRR is about 5%. The same deal with 20% ABSD gives about −5%.
• Homes bought from 4 Jul 2025 pay Seller’s Stamp Duty if you sell within four years, so plan for a hold of at least that long.
• “Net yield minus interest” is not your return. Neither is a five-year total profit divided by your cash.

The five return numbers, and what each tells you

Agents, banks and investors use “return” to mean different things. Ask which one you are being quoted.

Measure	Formula	What it tells you	What it ignores
Gross yield	Annual rent ÷ price	Quick screen between similar units	All costs, vacancy, financing
Net yield (cap rate)	(Rent − operating costs) ÷ price	How well the property earns, unlevered	Your loan, tax, stamp duties, the exit
Cash-on-cash return	Yearly cash flow after loan payments ÷ cash invested	Whether the deal pays you or drains you each year	Price growth, loan paydown
Total return (simple ROI)	Total profit ÷ cash invested	Headline profit	Time — five years and fifteen years look the same
IRR	The yearly rate that makes all cash in and out net to zero	Annualised return on your own money, with timing	Risk; it assumes your projections are right

The first two describe the property, so you can compare it with other properties. The last three describe the deal, so they change with your loan, your stamp duties and your tax bracket. Our rental yield guide covers the first two in detail. This guide builds up to IRR.

Step 1: count every dollar you put in

Start with the cash and CPF that leave your accounts on day one. For a hypothetical S$1.2m resale condo bought by a Singapore Citizen with no outstanding home loan:

Item	Buyer A (first property)	Buyer B (second property)
Downpayment, 25% (at least 5% in cash)	S$300,000	S$300,000
Buyer’s Stamp Duty	S$32,600	S$32,600
Additional Buyer’s Stamp Duty	S$0	S$240,000 (20%)
Legal and valuation (assumed)	S$3,000	S$3,000
Light furnishing (assumed)	S$10,000	S$10,000
Cash invested	S$345,600	S$585,600

BSD on S$1.2m is 1% of the first S$180,000, 2% of the next S$180,000, 3% of the next S$640,000 and 4% of the last S$200,000: S$1,800 + S$3,600 + S$19,200 + S$8,000 = S$32,600.

Two traps here. First, the 75% loan assumes you have no other housing loan. If Buyer B still has a mortgage on their home, the loan-to-value limit drops to 45%, and the downpayment jumps to S$660,000. Second, CPF money counts as money invested. When you sell, you must refund the CPF you used plus accrued interest, the interest that money would have earned in your CPF account. Treat it like cash in your sums.

Step 2: work out the yearly cash flow

Assume the unit rents for S$3,800 a month (S$45,600 a year).

Yearly item	Amount
Gross rent	S$45,600
Vacancy allowance (half a month a year)	−S$1,900
Agent fee (one month’s rent per two-year lease)	−S$1,900
Maintenance fees (S$350 a month)	−S$4,200
Property tax, non-owner-occupied (annual value S$43,200)	−S$6,240
Repairs and insurance	−S$1,500
Net operating income	S$29,860

Property tax uses the non-owner-occupied rates: 12% on the first S$30,000 of annual value (S$3,600) plus 20% on the next S$13,200 (S$2,640). Net yield is S$29,860 ÷ S$1.2m = 2.5%.

Now the loan. Borrow S$900,000 over 30 years. With 3-month compounded SORA near 1.23% on 1 Oct 2026, bank packages were around 1.5% to 1.8% for floating rates and 2.0% to 2.2% for fixed rates, after banks repriced following the US Federal Reserve’s September rate rise (The Business Times, 2 Oct 2026). We assume 2% on average over the hold. That gives a monthly instalment of S$3,327, or S$39,919 a year. In year 1, S$17,798 of that is interest and S$22,121 is principal.

Rental profit is taxed at your income tax rate. Interest, property tax, maintenance, repairs, insurance and agent fees are all deductible, so taxable rent in year 1 is about S$12,062. At a 15% marginal rate (chargeable income of S$120,000 to S$160,000), the tax is S$1,809.

Year-1 cash flow = S$29,860 − S$39,919 − S$1,809 = −S$11,868, or about S$990 a month out of your pocket.

That makes the cash-on-cash return −3.4% for Buyer A and −2.0% for Buyer B. Some investors leave out the principal, since it is forced saving rather than a cost. On that basis, the year-1 cash yield is S$10,253, or 3.0% for A and 1.8% for B. Either way, the rent does not carry this loan. Test your own loan size and rate with our mortgage calculator.

Step 3: the exit

Most of a leveraged property’s return arrives on the day you sell. Assume a sale after five years at 2% a year growth: S$1.2m × 1.02⁵ ≈ S$1,324,900.

• Selling costs (2% agent fee plus S$3,000 legal): about S$29,500
• Outstanding loan after five years: about S$784,800
• Cash back from the sale: about S$510,600

Why five years? Homes bought from 4 Jul 2025 pay Seller’s Stamp Duty of 16%, 12%, 8% or 4% if sold within the first, second, third or fourth year. Sell this unit in year 4 at about S$1.3m and SSD is about S$52,000, which takes away most of the gain. Before July 2025 the holding period was three years and the rates were four points lower.

Step 4: put it together with IRR

Line up the cash flows for Buyer A, year by year:

Year	0	1	2	3	4	5
Cash flow (S$)	−345,600	−11,868	−11,935	−12,004	−12,073	+498,416

Year 5 combines that year’s −S$12,144 with the S$510,560 from the sale. In Excel or Google Sheets, =IRR() across those six cells gives 5.1% a year.

Compare that with the “simple ROI”: a total profit of about S$104,900 on S$345,600, or 30%. That sounds better, but it is spread over five years and mostly arrives at the end. IRR accounts for timing, which makes it the fairest way to compare a property with a deposit, CPF or a REIT.

Here is how the IRR moves with price growth, ABSD and holding period (2% loan rate, 15% tax rate):

Annual price growth	0%	2%	3%	4%
Buyer A, 5-year hold	−1.0%	5.1%	7.9%	10.5%
Buyer B (20% ABSD), 5-year hold	−10.3%	−4.9%	−2.4%	−0.1%
Buyer A, 10-year hold	1.1%	5.9%	8.0%	9.9%
Buyer B (20% ABSD), 10-year hold	−3.5%	1.0%	2.9%	4.7%

Three lessons stand out:

1. ABSD is a hurdle that only time and growth can clear. At 20%, Buyer B needs about 4% a year growth over five years just to break even. Over ten years, the hurdle is lower, but the return is still thin.
2. Leverage works both ways. If Buyer A paid all cash, the five-year IRR at 2% growth would be only about 2.8%. With the loan, it is 5.1%. At 0% growth, the loan turns a small gain (0.9% unlevered) into a loss.
3. Rates matter more than rent. At a 1.5% average loan rate, Buyer A’s five-year IRR rises to 6.0%. At 3.5%, it falls to 2.4%. Compounded SORA peaked at about 3.7–3.8% in late 2023, so do not assume today’s rates will last for your whole hold.

For a stricter test, discount the cash flows at the return you need. At 6%, Buyer A’s net present value is about −S$14,600: the deal falls short of a 6% target. At 4%, it is about +S$20,600. Our guide to NPV and MIRR explains these tools in more detail.

Common mistakes that inflate returns

• “Net yield 3%, loan 1.5%, so I make 1.5%.” This ignores principal repayments, tax, and the fact that your equity, not the price, is what you invested.
• Using a future rent or a “projected” yield. Use today’s achievable rent for a comparable unit, not the developer’s estimate for a unit that is not yet built. A new launch also has no rent at all during construction, which pulls the IRR down.
• Forgetting the costs of buying and selling. BSD, ABSD, legal fees, agent fees and SSD can easily total 5–25% of the price.
• Quoting average returns. An average of yearly returns overstates the result when most of the profit comes at the end. Use IRR.
• Ignoring lease decay. On an older 99-year leasehold, price growth may slow or reverse as the lease runs down. See our guide to valuing leasehold property.
• Ignoring the opportunity cost of CPF. CPF Ordinary Account money earns 2.5% a year with no risk. Your property return should clear that by a clear margin.

Bottom line

Calculate return the way the cash actually moves: everything in on day one, the yearly gap between rent and the mortgage, and the net proceeds at the end. Then run the IRR at a few growth rates and loan rates, not just the hopeful one. In 2026, a first property bought sensibly can earn a reasonable leveraged return if prices grow modestly. A second property that pays 20% ABSD needs strong growth or a long hold to make sense as a pure investment. Your numbers will differ from ours, so use them as a template, not a forecast.

Sources

• Buyer’s Stamp Duty (BSD) — IRAS, rates effective 15 Feb 2023 (checked Oct 2026)
• Additional Buyer’s Stamp Duty (ABSD) — IRAS, rates effective 27 Apr 2023 (checked Oct 2026)
• Seller’s Stamp Duty (SSD) for residential property — IRAS, rates for purchases from 4 Jul 2025 (checked Oct 2026)
• Extension of the holding period of Seller’s Stamp Duty and higher SSD rates — MAS, 3 Jul 2025
• Property tax rates for residential property — IRAS (checked Oct 2026)
• Income from property rented out — IRAS, updated 10 Aug 2026
• Individual income tax rates — IRAS, updated 27 Apr 2026
• Loan tenure and loan-to-value limits — MAS, 27 Mar 2024
• CPF refund when selling or transferring property — CPF Board, updated 11 Jun 2026
• SORA rates — MAS data as reported by HousingLoanSG, 1 Oct 2026
• Home loan package rates after the September 2026 Fed rate rise — Business Times, 2 Oct 2026
• Domestic interest rates (SORA history) — MAS (checked Oct 2026)
• CPF interest rates — CPF Board (checked Oct 2026)