Tax on property income in Malaysia
Effective Tax Rate on Rental Income |
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Monthly Income | US$1,500 | US$6,000 | US$12,000 |
Tax Rate | 30% | 30% | 30% |
Click here to see a worked example | |||
Source:
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INDIVIDUAL TAXATION
Nonresidents 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 overall tax liability. Personal reliefs (tax allowances) are not granted to nonresidents.
Income Tax
Nonresidents are taxed at a flat rate of 30% on their Malaysian-sourced income.
Rental Income

Rental income earned by nonresidents may be subject to 10% withholding tax. The withholding tax may be credited against the nonresident´s income tax liability.
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 - NON CITIZENS 2023 |
|
OWNERSHIP PERIOD | TAX RATE |
Up to 5 years | 30% |
Over 5 years | 10% |
Source: Global Property Guide |
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 MYR1 (US$0.25) is equal to 100 sen (cents). The quit rent liability is generally estimated to be less than MYR100 (US$25) per year.
CORPORATE TAXATION
Income Tax
Income and capital gains earned by nonresident companies are subject to corporate income tax at a flat rate of 24%. Income-generating expenses are deductible when calculating taxable income.
The applicable corporate income tax rate is 24% for 2023.
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 - COMPANIES 2023 |
|
OWNERSHIP PERIOD | TAX RATE |
Up to 3 years | 30% |
3 years - 4 years | 20% |
4 years - 5 years | 15% |
Over 5 years | 10% |
Source: Global Property Guide |