Renovation and refurbishment expenditure: what a Singapore business can deduct

Renovation money is spent once and recovered slowly, and the recovery rate is set by tax law rather than by the accounts. Singapore's answer is a specific deduction with a cap and a claim period, not a percentage.

Why searching for a depreciation rate returns nothing useful

Company accounts write renovation off over a useful life, often 3 years or 5 years, chosen under accounting standards — which is why so many people search for a renovation depreciation rate in Singapore. Tax ignores that figure. IRAS states the position in one line on its capital allowances page:

"Capital allowances are deductions claimable for the wear and tear of qualifying fixed assets. They are generally granted in place of depreciation, which is not deductible."

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— IRAS, Capital Allowances

Capital allowances do not rescue renovation either, because a shop's ceiling and flooring are not machinery. IRAS is explicit that renovation and refurbishment expenditure "does not qualify for capital allowances as it is not incurred for the provision of 'plant or machinery'" (IRAS, Tax Treatment of Business Expenses (M-R))). No depreciation rate for renovation exists in Singapore tax, and any blog quoting one is describing an accounting policy, not a tax rule.

What Section 14N gives, and over what period

The deduction that does exist sits in section 14N of the Income Tax Act 1947, and IRAS sets out its shape in an e-Tax Guide now in its eighth edition, published on 30 Jan 2026:

"S14N deduction is given over a period of three consecutive years, on a straight-line basis, starting from the YA for which the qualifying R&R expenditure were incurred. The claim for S14N deduction cannot be deferred."

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— IRAS e-Tax Guide, Tax Deduction for Expenses Incurred on Renovation or Refurbishment Works Done to Business Premises

From YA 2025 onwards, IRAS states that the option to claim qualifying expenditure in one year instead of over three years is permanently available, and that the option, once elected in the YA, is irrevocable (IRAS e-Tax Guide). Deferral is not on the menu in either direction: expenditure not claimed in the Year of Assessment relating to the basis period in which it was incurred does not qualify for deduction in subsequent YAs (IRAS)).

Two timing details catch businesses out. Expenditure incurred before a business commences is deemed by IRAS to be incurred on the first day of commencement, so a pre-opening fit-out is claimed in the YA relating to the basis period in which trading starts. And where the trade ceases permanently in any of the basis periods of the three YAs, IRAS states that the balance of the deduction yet to be claimed is not allowed as a tax deduction in the subsequent YAs — a shop that closes in year two of a three-year spread loses the third slice.

The expenditure cap, and the fixed three-year period from YA 2025

IRAS caps qualifying expenditure at $300,000 for every relevant three-year period (IRAS e-Tax Guide). From YA 2025 that period is fixed for all businesses rather than running from each business's first claim, with the first fixed period covering YA 2025 to YA 2027, then YA 2028 to YA 2030, then YA 2031 to YA 2033, and so on (IRAS)).

Transitional relief is generous and easy to miss. IRAS states that a taxpayer whose current relevant three-year period does not coincide with YA 2025 to YA 2027 is allowed a refreshed expenditure cap of $300,000 for that first fixed period, notwithstanding what was already claimed in the prior period (IRAS e-Tax Guide). IRAS also confirms there is no proration: a taxpayer that does not carry on a trade throughout the whole fixed period still gets the full cap.

For a partnership, IRAS applies the cap at partnership level, and for a sole proprietor the same cap applies regardless of the number of trades carried on. Older summaries online are unreliable for a simple reason: IRAS notes the cap was $150,000 for every relevant three-year period prior to YA 2013 (IRAS e-Tax Guide).

What qualifies

IRAS frames qualification by exclusion rather than by a closed list:

"All R&R expenditure, other than those relating to structural changes made to business premises and the costs described in paragraph 8.3, will qualify for S14N deduction, up to the expenditure cap."

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— IRAS e-Tax Guide

The operative test is regulatory, not aesthetic. As long as prior approval from the Commissioner of Building Control is not required for the works, IRAS treats the expenditure as qualifying (IRAS e-Tax Guide). The published examples cover most of a commercial fit-out: general electrical installation and wiring, general lighting, kitchen and sanitary fittings, doors, gates and roller shutters, fixed partitions, wall coverings, floorings, false ceilings and cornices, ornamental features that are not fine art, windows, fitting rooms in retail outlets, hacking work, hoarding works, and insurance for renovation works qualifying for the deduction (IRAS, Tax Treatment of Business Expenses (M-R))).

What is excluded

"Claim for S14N deduction on the following expenditure is not allowable: (a) any designer services or professional services, except designer services or professional services which do not affect the structure of the business premises from YA 2025; (b) any antique; (c) any type of fine art including painting, drawing, print, calligraphy, mosaic, sculpture, pottery or art installation; or (d) any works carried out to a place of residence provided to or to be provided to employees."

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— IRAS e-Tax Guide

The designer fee carve-out changed in the business's favour, and dates matter. IRAS states that with effect from YA 2025, designer fees or professional fees that do not relate to structural works where approval from the Commissioner of Building Control is required will be included as qualifying R&R expenditure (IRAS)) — before that, design fees sat outside the deduction entirely.

Structural work is the hard boundary. Expenditure on structural changes is outside section 14N by definition, and IRAS notes that renovation costs that affect the structure may instead qualify for Land Intensification Allowance if approved by the Singapore Economic Development Board or BCA (IRAS)). Entity type matters too: IRAS states that investment holding companies do not qualify for the deduction because they do not carry on a trade or business for tax purposes, while the e-Tax Guide confirms a business of making investments subject to section 10D may claim on renovation done to properties it rents out.

Where renovation stops and capital allowances start

Anything inside the fit-out that is genuinely plant or machinery follows a different section, and IRAS is clear that the same expenditure cannot be claimed twice. Capital allowances may be written off over 1 year, 3 years or the prescribed working life of the asset — and over 2 years for assets acquired in the basis periods for YAs 2021, 2022 and 2024 — with a 100% write-off available for computers, prescribed automation equipment and low-value assets, the last of which is capped at $30,000 per YA in total (IRAS, Capital Allowances). Under section 19, working life comes from the Sixth Schedule, which IRAS says has been streamlined to 6, 12 and 16 years — the closest thing in Singapore tax to a published useful life table, and it applies to assets, never to renovation.

Repairs, replacements and reinstatement follow other rules again

Work with no improvement element is not renovation for this purpose at all. IRAS states that where the works qualify as repairs or replacements with no improvement element, deduction can be claimed under section 14(1)(c) instead, and that section 14N cannot then be claimed on the same expenditure (IRAS e-Tax Guide).

Exit costs sit outside again. IRAS treats reinstatement costs — expenses incurred to reinstate premises to their original condition before vacating at the end of the tenancy agreement — as capital expenditure disallowed under section 15(1)(c), deductible only where the costs claimed do not relate to a provision made under FRS 16, are contractually provided for in the tenancy agreement, and the premises are not vacated due to any cessation of business (IRAS, Tax Treatment of Business Expenses (M-R))).

What your contractor has to give you

IRAS does not ask for documents at filing, but does ask a business to keep them. The e-Tax Guide lists an itemised list of the renovation or refurbishment works with the addresses of the premises and the related costs, confirmation that the works in that itemised list do not require the approval of the Commissioner of Building Control, and invoices and payment details (IRAS e-Tax Guide). Records must be retained for at least 5 years from the relevant Year of Assessment (IRAS, record keeping requirements).

Getting that confirmation at handover rather than at year end is worth the small friction, because the downside is specific. IRAS states that where the deduction was erroneously allowed on works that in fact required the Commissioner's approval, an amount equal to the total deductions erroneously allowed previously is deemed taxable income for the YA in which the Comptroller discovers the incorrect claim (IRAS e-Tax Guide). A lump-sum quotation with one line reading "renovation works" makes that confirmation impossible to give honestly.

Planning around the cap, without distorting the project

Phasing a large fit-out across two fixed three-year periods can keep more of it inside the cap, and the one-year write-off is worth electing when there is enough trade income in that YA to absorb it. TO FILL: commercial fit-out budget split between qualifying renovation works and plant or equipment makes that modelling possible; a single undifferentiated contract sum does not.

Chasing the deduction is a poor reason to change a design. A structural alteration the business genuinely needs is still worth doing even though it falls outside section 14N, and a cheaper non-structural solution deserves to win on its own merits rather than on the tax line.

General information, not tax advice

Everything above summarises guidance published by IRAS and current on iras.gov.sg at the time of writing. Tax positions turn on facts, entity type and financial year end, and the guidance is revised — the e-Tax Guide relied on here is the eighth edition, first published on 18 Jun 2008 and amended seven times since. Check the current IRAS pages, and take advice from a tax professional, before relying on any figure or period in a filing.