Malaysia: Taxes and Costs

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Rental income tax is high in Malaysia

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000
Tax Rate	22.4%	25.1%
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INDIVIDUAL TAXATION

Non-residents are liable to pay tax on Malaysian-sourced income. Married couples may file for joint assessment, but separate assessment is deemed to be more effective in lowering over-all tax liability. Personal reliefs (tax allowances) are not granted to non-residents.

INCOME TAX

Non-resident individuals earning rental income in the country are liable to pay tax at a rate of 28% on net income. Income-generating expenses are deductible from the gross rent such as interest expense, cost of repairs, assessment tax, quit rent, and agent’s commission. Depreciation does not qualify for tax deductions against income, and capital allowances are not available for residential and commercial buildings.

CAPITAL GAINS TAX

As of 01 April 2007, there is no capital gains tax.

Previously, non-resident individuals were charged Real Property Gains Tax (RPGT) at a flat rate of 30% on gains made on the disposal of real property within the first five years, and 5% thereafter.

PROPERTY TAX

Assessment Tax on Residential Property

The assessment tax is a local tax based on the annual rental value of the property, as assessed by the local authorities. It is generally levied at a flat rate of 6% for residential properties and payable in two installments.

Quit Rent

The quit rent is a local tax levied on all landed properties, payable annually at a rate of 1 sen (US$0.003) to 2 sen (US$0.006) per square foot, wherein RM1 is equal to 100 sen (cents). The quit rent liability is generally estimated to be less than RM100 (US$31) per year.

Malaysia - more data and information

• Guide to buying houses and registering property sales in Malaysia

Your Comments

posted by G.saravanan | 2008-03-25

private, India

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