Guide to Property Taxes in Malaysia

Non-resident individuals are generally subject to Malaysian income tax on income accruing in or derived from Malaysia, including rental income from Malaysian real estate.

Non-resident individuals are generally not entitled to the personal reliefs and progressive tax rates available to Malaysian tax residents.

Income Tax

For 2026, a non-resident individual is generally subject to a flat 30% income tax rate on taxable Malaysian-source income.

Rental Income

Rental income derived by a non-resident individual from Malaysian real estate is generally subject to income tax at a flat rate of 30% on net taxable rental income.

Qualifying expenses incurred wholly and exclusively in generating the rental income may generally be deducted. These can include:

• interest on financing used to acquire the property;

• repairs and maintenance;

• local authority assessment tax;

• quit rent or land-related charges;

• property insurance; and

• qualifying letting or management expenses.

Capital expenditure is generally not immediately deductible. Ordinary depreciation of a residential or commercial building is also not generally deductible in calculating taxable rental income.

The 10% withholding tax applicable to certain payments to non-residents should not be treated as a general withholding tax on rent from Malaysian immovable property. The 10% withholding provisions cover specified categories such as rental of movable property and certain special classes of income.

Capital Gains Tax

Disposals of Malaysian real property are subject to real property gains tax (RPGT). RPGT is levied at progressive rates, depending on the property’s ownership period or holding period prior to its sale.

Real Property Gains Tax - Individuals 2026

Corporate Tax

A non-resident company carrying on taxable business activities in Malaysia is generally subject to Malaysian Corporate Income Tax at 24% on its taxable Malaysian-source business income.

Qualifying expenses incurred in producing taxable rental or business income are generally deductible in determining taxable corporate profits.

Accordingly, rental income earned through a foreign company should not generally be described as automatically subject to a 30% corporate rental-income tax rate. The standard corporate income tax rate applicable to a non-resident company is 24%, subject to the nature of the income, whether the company carries on business in Malaysia, permanent-establishment considerations and any applicable double taxation treaty.

Property Buying and Selling Taxes/Costs

Property Holding Tax

Malaysia does not impose a single nationwide annual property tax based directly on the market value of real estate. Instead, property owners are generally subject to Assessment Tax and Quit Rent, with rates varying according to the relevant state and local authority.

Assessment Tax

Assessment Tax (Cukai Taksiran/Cukai Pintu) is imposed by local authorities on properties within their jurisdiction. It is generally calculated by applying the relevant local authority's tax rate to the property's assessed annual rental value.

Rates vary considerably between municipalities and according to the type and use of the property. Assessment Tax is commonly billed twice a year, although the precise payment arrangements depend on the local authority.

Quit Rent

Quit Rent (Cukai Tanah) is an annual land tax imposed by the relevant state authority on landowners.

The amount payable varies according to factors such as the state, location, land area, land category and permitted use. Consequently, there is no single nationwide rate per square foot that can reliably be applied to Malaysian property.

For strata properties, traditional Quit Rent has in some jurisdictions been replaced by or converted into a separate Parcel Rent (Cukai Petak) charged to individual strata-title owners.

Both Assessment Tax and Quit Rent are generally relatively modest recurring property charges compared with taxes calculated directly as a percentage of a property's current market value.