“Letting” and “leasing” are probably common terms you hear among expats and foreigners when discussing property rentals, and you may be wondering if they mean the same as renting.
For instance, you might overhear an expat talking about letting his home to a tenant, or mention that he needs to speak to his lawyer in order to draw up the terms of a new lease. Or you might sympathetically nod your head to a foreign tenant’s complaint about the high rent on the property he is currently leasing.
If you had trouble understanding what the above meant, any confusion is likely to have come from the terms “leasing” and “letting”. Do “leasing” and “letting” mean the same thing as “renting”, the term most commonly used by Singaporeans, or are there technical differences to be aware of?
What Is “Letting” Property?
What does it mean when someone says they are letting a property?
According to the Cambridge English Dictionary, letting is defined as “the activity of allowing your house or land to be lived in or used by someone else in exchange for a regular payment”.
If that sounds suspiciously like renting to you, you are right. When you rent out your house to somebody else, you are letting it.
However, there is a semantic difference between renting and letting. You can rent out your house to a tenant, who in turn rents your house. However, you can let your house to a tenant, but the tenant does not “let” the house from you. The term “let” is a verb that can be performed only by the landlord and not the tenant.
If that is making your head spin, rest assured that you will almost never hear a Singaporean talking about “letting” a property, as the term “renting out” is mostly commonly used in its stead.
The term “letting” tends to be more commonly used in the UK than in the US or Singapore. So, when speaking with British expats, do not be surprised if you hear the term “letting” — they are simply referring to the act of renting out property on the part of the landlord.
In the UK, there is sometimes a difference between the intended meaning behind the terms “leasing” and “letting”, with the former used to refer to renting and the latter used to refer to licensing, which we will talk about in the next section. While such usage is uncommon in Singapore, it is best to be aware just in case you encounter somebody who uses the term “letting” in this way.
Suggested read: An Expat Guide to Renting A Home in Singapore
“Leasing” and “Letting”: Are They the Same As “Renting”?
“Leasing” is another term that you might come across from time to time which can generate confusion. The Cambridge Dictionary meaning of lease is “to make a legal agreement by which money is paid in order to use land, a building, a vehicle, or a piece of equipment for an agreed period of time”.
A tenancy agreement or rental agreement fits this definition perfectly, as it provides for the use of the property for a specified period of time. In other words, if you are renting a property, you are also leasing it. The two terms are interchangeable.
In a legal context, the term “lease” is often used in place of “rental agreement” as it refers to the concept of giving a tenant proprietary interest in a property. In other words, a tenant leasing a property may take ownership of it for the duration of the lease. This means that he or she may occupy the property and also prevent others from trespassing on it.
In legalese, the term “lease” is frequently used in contrast with the term “licence”, which is another arrangement between a landlord and tenant. Licenses offer the tenant the right to use a property or part of a property for a temporary duration, but without conferring exclusive possession on the tenant.
A licence might, for instance, give you the right to use certain facilities in a coworking space during specified office hours, but it does not allow you to stop others from using the space.
In Singapore, people rarely use the word “leasing” when discussing residential property in everyday parlance, preferring instead to talk about “renting” or “renting out” a home. However, the term “leasing” is sometimes used in everyday speech when referring to commercial property rentals. So, if you are thinking of renting out retail space for your new business, the landlord might ask you how long of a lease you need.
You are also likely to encounter the term “lease” in a legal setting or when looking through tenancy agreements. For instance, if your lawyer is drafting or reviewing a rental agreement on your behalf, he or she is likely to mention the terms of the lease. You can rest easy knowing that the term “leasing” is generally interchangeable with “renting”.
Conversely, if you come across the term “licence”, be aware that it is not the same thing as a “lease” as it does not confer the right of possession.
Recommended article: Tips for foreigners buying or renting in Singapore
Conclusion
As a general rule of thumb, “renting” is the most widely understood term in Singapore when dealing with residential property, so you can use it in English or Singlish without fear of being misunderstood.
However, in a legal setting or when dealing with commercial property, the term “leasing” is often used interchangeably with “renting”, and acts as a contrast to the term “licensing”.
The term “letting” is rarely used in Singapore, but you might nonetheless encounter this term from time to time, particularly when used by British expats. In most cases, it refers to the act of renting out property by a landlord. To avoid confusion, it is best not to use this term when handling a property transaction in real life.
Looking for a property to lease or rent? Check out rental properties on PropertyGuru to find your next home.
Other FAQs Related to Letting:
1. What Is the Meaning of Letting?
According to the Cambridge English Dictionary, letting is defined as “the activity of allowing your house or land to be lived in or used by someone else in exchange for a regular payment”. In other words, you let your house as a landlord to a tenant.
2. What Is the Difference Between Letting and Renting?
The difference between letting and renting is semantics; they both mean the act of renting the property from a landlord. But whilst renting is the common term in Singapore, letting is more common among British expats.
3. Do You Pay Tax for Letting Your Property?
Yes. You need to pay rental income tax if you’re renting out your property. The formula for calculating rental income tax is: taxable net rental income = [gross rent] minus [allowable expenses (mortgage interest + deemed expenses)]
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