Rental income in Malaysia is taxable as personal income, but numerous allowable deductions can significantly reduce the taxable amount. Proper documentation and claiming all deductions is essential for Malaysian property investors.
Rental Income: What Is Taxable?
Net rental income = Gross rent received - Allowable expenses. Allowable expenses include: loan interest, assessment tax (cukai taksiran), quit rent (cukai tanah), insurance premiums on rental property, repair and maintenance costs (not capital improvements), property management fees, and agent fees for finding tenants.
Sample Rental Income Tax Calculation
Annual rent: RM24,000. Allowable deductions: Loan interest RM9,600 + Assessment RM480 + Quit rent RM120 + Insurance RM600 + Repairs RM800 = RM11,600. Net rental income: RM24,000 - RM11,600 = RM12,400. Add to employment income and calculate tax at applicable rate.
Multiple Properties
All rental income from all properties is aggregated. A net rental loss from one property can be offset against rental income from another. Rental losses CANNOT be offset against employment income โ they can only be carried forward against future rental income.
Should I Hold Property in a Company?
Company tax rate: 24%. Personal rate: 0%โ30% depending on income. Holding property in a company provides no RPGT advantage (companies never get 0%) and incurs additional compliance costs. For most small landlords, personal ownership is simpler and often tax-equivalent or better.
Foreign-Sourced Rental Income (Post-2024)
Since January 2024, foreign-sourced income (including rental from overseas property) remitted to Malaysia is taxable. Seek advice from a tax consultant if you own overseas investment properties.
Calculate rental income tax with our ๐งพ Income Tax Calculator.