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By Jason Lim, REN 84424 · IQI Realty · Checked on 13 November 2026
This guide is for landlords who are Malaysian tax residents and let out a house, condo or apartment in Johor Bahru or elsewhere in Malaysia. The short answer: rent is taxable income. You deduct the expenses LHDN allows, add the net rent to your salary or other income, and pay tax at the normal resident scale rates, from 0% up to 30%. For most people letting one or two homes, the rent goes into Form BE, due on 30 April with e-Filing open to 15 May.
Quick answer
- Rent is taxed with your other income: net rent is added to your chargeable income and taxed at resident scale rates (0% to 30% for YA2025, LHDN).
- Deductible: assessment, quit rent, loan interest, fire insurance, rent collection costs, costs of renewing a tenancy or changing tenants, and ordinary repairs (Public Ruling 12/2018).
- Not deductible: costs of getting your first tenant (advertising, legal fees, stamp duty, agent’s commission) and spending outside the permitted list, such as improvements.
- Losses: a loss from ordinary (non-business) letting cannot be set against your salary and cannot be carried forward (ruling Examples 16 and 17).
- No 50% exemption now: the residential rent exemption order gazetted in 2019 had effect for YA2018. I found no exemption in force for YA2024 to YA2026.
- Deadlines: Form BE 30 April (e-Filing to 15 May); Form B 30 June (to 15 July). Keep records for seven years.
General information, not tax, legal or financial advice. Confirm your own position with LHDN or a licensed tax agent before you file.
Who counts as a resident landlord
Malaysian tax residence depends on days in the country, not on citizenship. Under section 7(1)(a) of the Income Tax Act 1967, an individual physically present in Malaysia for 182 days or more in a calendar year is generally resident for that year, and LHDN’s guide on residents and non-residents sets out further tests that link neighbouring years.
- Resident: rent is added to your other income and taxed at scale rates, with personal reliefs. This guide covers you.
- Non-resident: taxed at a flat 30% with no reliefs, according to LHDN. A Malaysian working abroad can fall here. See my rental income tax guide for non-residents.
- Singapore residents letting a JB home: see Singapore tax on JB rental income.
How rent is taxed: business or not
LHDN’s Public Ruling No. 12/2018, Income from Letting of Real Property (19 December 2018), is still the ruling LHDN lists on this topic in November 2026. It sorts letting into two types:
| Type | When it applies | What follows |
|---|---|---|
| Non-business letting (section 4(d) rental income) | You let the home and the management body, not you, looks after the common areas. This is the usual case for a condo or house let by an individual. | Only the ruling’s listed expenses are deductible; no capital allowances on furniture; losses cannot be used against other income. |
| Letting as a business (section 4(a)) | You actively provide comprehensive maintenance or support services for the property, yourself or through people you hire (paragraph 4). | Wider business deductions and capital allowances; filed as business income, usually on Form B. |
Most landlords letting one to three homes are non-business. Running several units as short stays with cleaning and guest services can look different; see Airbnb and short-stay rules in JB and ask your tax agent.
The resident tax rates
Your net rent is added to employment, business and other income. After reliefs, the total is taxed in bands. LHDN’s published table for YA2025 (income earned in 2025, filed in 2026):
| Chargeable income (RM) | Rate | Tax on income up to the start of the band (RM) |
|---|---|---|
| 0 to 5,000 | 0% | 0 |
| 5,001 to 20,000 | 1% | 0 |
| 20,001 to 35,000 | 3% | 150 |
| 35,001 to 50,000 | 6% | 600 |
| 50,001 to 70,000 | 11% | 1,500 |
| 70,001 to 100,000 | 19% | 3,700 |
| 100,001 to 400,000 | 25% | 9,400 |
| 400,001 to 600,000 | 26% | 84,400 |
| 600,001 to 2,000,000 | 28% | 136,400 |
| Above 2,000,000 | 30% | 528,400 |
Budget 2027, tabled on 9 October 2026, proposed a lower 18% rate for RM70,001 to RM100,000, a new 24% band for RM100,001 to RM150,000 and a higher individual relief of RM12,000, from YA2027 (Bernama and The Star, 9 October 2026). Those are proposals until the Finance Bill passes, and they do not change your YA2025 or YA2026 returns.
Expenses you can deduct
For non-business letting, the ruling allows only direct expenses incurred wholly and exclusively to produce the rent (paragraph 8.2):
| Allowed | Notes |
|---|---|
| Assessment (cukai taksiran) and quit rent (cukai tanah) | Use the bills for the year. See quit rent and assessment. |
| Interest on the loan used to buy the property | Interest only, not the principal part of your instalment. |
| Fire insurance premium | On the property itself. |
| Rent collection and costs of enforcing payment | Including legal costs to recover unpaid rent. See when a tenant stops paying. |
| Costs of renewing a tenancy or changing tenants | This is where an agent’s fee on a renewal or a later tenant fits. |
| Ordinary repairs that keep the property in its existing state | Repainting, fixing leaks, replacing a broken part like for like. |
| Replacing furniture and fittings in a furnished let | Paragraph 12, for example a worn-out air-conditioner or bed. |
What you cannot deduct
- Getting your first tenant. Advertising, legal fees for the first tenancy agreement, its stamp duty and the agent’s commission for the first tenant are not allowed (paragraph 8.3).
- Improvements and capital spending. Renovations, extensions, a new kitchen or first-time furnishing are not ordinary repairs and are not on the list.
- Costs before the first letting, or while the home sits empty and is not ready to let (paragraph 8.4.1).
- Private use. If you live in the home for part of the year, only the let period counts.
Vacant periods between tenancies are treated more kindly: expenses stay deductible while the home is kept ready to let, including gaps of up to two years without tenants, renovation or repair, and situations beyond your control (paragraph 8.4.2). Furnished or unfurnished also changes what you can claim later.
Want to know a building’s running costs before you let?
Tell me the project. I’ll share the typical maintenance, quit rent and assessment levels I see there, so you and your tax agent can estimate the net rent.
WhatsApp JasonAn illustration
Invented figures, not a real unit or a rent forecast. A resident landlord has RM60,000 of chargeable income from salary after reliefs, and lets a JB condo at RM2,200 a month for the whole year:
| Item | RM a year |
|---|---|
| Rent received (RM2,200 x 12) | 26,400 |
| Less assessment and quit rent | (900) |
| Less loan interest (from the bank’s yearly statement) | (14,000) |
| Less fire insurance | (250) |
| Less ordinary repairs | (800) |
| Less agent’s fee on renewing the tenancy | (1,100) |
| Net rental income | 9,350 |
| Total chargeable income (60,000 + 9,350) | 69,350 |
| Tax: RM1,500 on the first 50,000, plus 11% of 19,350 | 3,628.50 |
| Tax without the rent: RM1,500 plus 11% of 10,000 | 2,600.00 |
| Extra tax caused by the rent | 1,028.50 |
Notice the loan interest: in the early years of a loan it is often the largest deduction. To see how much of an instalment is interest, use my home loan calculator.
Joint owners, losses and records
Joint owners
Each co-owner reports their own share of the net rent in their own return. The ruling does not set out how to split it; the usual starting point is each owner’s share on the title, so a 50:50 title means half the rent and half the allowable expenses each. Agree the split in writing and keep it consistent. See joint names and tenancy in common.
Losses
If allowable expenses exceed the rent, you have a loss. For non-business letting, the ruling’s Examples 16 and 17 show that loss cannot be set against your business income or your aggregate income, and cannot be carried forward. Losses from letting run as a business follow the business rules instead (paragraph 9.4).
Records to keep
- Stamped tenancy agreements and renewal letters. See my landlord guide to tenancy agreements.
- A rent ledger: date and amount received each month, and any deposit forfeited for unpaid rent.
- Assessment and quit rent bills and receipts, the yearly loan interest statement and fire insurance schedules.
- Repair invoices with photos, and agent invoices showing whether the fee was for a first letting or a renewal.
LHDN asks individuals to keep records for seven years, according to its 2026 Navigasi HASiL guide.
Filing: forms and deadlines
| Your situation | Form | Due for YA2025 (filed in 2026) |
|---|---|---|
| Resident with salary and/or non-business rent, no business income | e-BE | 30 April 2026; e-Filing grace to 15 May 2026 |
| Resident with business income, including letting run as a business | e-B | 30 June 2026; e-Filing grace to 15 July 2026 |
In Form BE, rent from Malaysian property goes in the rental item of the income computation (item B3 in LHDN’s 2025 explanatory notes). The same deadlines apply each year; for YA2026 income, check LHDN’s 2027 filing programme when it is published.
What happened to the 50% rent exemption?
Budget 2018 announced a 50% exemption on rental income for Malaysian resident landlords letting homes at up to RM2,000 a month. The Income Tax (Exemption) (No. 2) Order 2019, P.U.(A) 55/2019, gazetted on 27 February 2019, gave effect to it for YA2018, for a stamped tenancy agreement and a citizen who owns the home.
I checked LHDN’s 2025 return-form notes, the Budget 2026 summaries and the Budget 2027 statements and found no residential rent exemption in force for YA2024, YA2025 or YA2026. Treat all your rent as taxable unless your tax agent shows you a current exemption order.
Other situations
- Letting to a company: see corporate tenancies and company leases.
- Letting rooms: see renting out rooms in JB.
- Selling later: a gain is taxed under RPGT, not income tax. See my RPGT guide.
- Unpaid deposits and arrears: see rental deposit refunds.
Where to buy if this matters to you
Net rent depends on running costs as much as on rent. These area guides show the types of homes and buildings in each part of JB:
- JB Sentral and Bukit Chagar: near the CIQ and the RTS Link station.
- Mount Austin: an established family area.
- Iskandar Puteri: Medini, EduCity and the Second Link.
- Tebrau, Setia Indah and Molek: landed homes and condos near the malls.
- Skudai, Tampoi and Kempas: near universities and industrial areas.
Compare them on my JB property map.
More Johor living guides: Landlord tenancy agreements · Tenant screening and inventory · Maintenance fees and sinking fund · Managing a JB property from overseas
Frequently asked questions
Do I have to pay tax on rental income in Malaysia?
Yes. Rent from a Malaysian property is taxable. A resident landlord deducts allowable expenses, adds the net rent to other income and pays tax at the resident scale rates, which ran from 0% to 30% for YA2025.
What expenses can I deduct from rental income?
Under LHDN Public Ruling 12/2018: assessment, quit rent, loan interest, fire insurance, rent collection costs, costs of renewing a tenancy or changing tenants, ordinary repairs, and replacing furniture in a furnished let.
Can I deduct the agent’s fee for finding a tenant?
Not for the first tenant. The ruling disallows the costs of getting the first tenant, including advertising, legal fees, stamp duty and agent’s commission. Fees for renewing a tenancy or replacing a tenant are deductible.
Is there still a 50% tax exemption on residential rental income?
Not that I could find. The exemption order P.U.(A) 55/2019 had effect for YA2018. I found no residential rent exemption in force for YA2024 to YA2026, so treat all rent as taxable unless your tax agent shows otherwise.
Which form do I use to declare rental income?
Most resident landlords without a business use Form BE, due 30 April with e-Filing open to 15 May. If you let property as a business, or have other business income, use Form B, due 30 June with e-Filing to 15 July.
Can a rental loss reduce the tax on my salary?
No, not for ordinary non-business letting. LHDN’s ruling shows that such a loss cannot be set against other income and cannot be carried forward. Business letting follows different rules.
How do joint owners declare rent?
Each owner declares their own share of the net rent in their own return, usually in line with their share on the title. Agree the split in writing and confirm it with your tax agent.
Letting a home in JB?
Tell me the project and unit size. I will share the typical maintenance, quit rent and assessment levels I see in that building, in general terms, so you can estimate your net rent with your tax agent. I can also help you find and screen tenants and keep the paperwork tidy. You can book an appointment or ask for a Zoom consultation.
Sources: LHDN, Public Ruling No. 12/2018, Income from Letting of Real Property, 19 December 2018; LHDN, list of public rulings (PR 12/2018 still listed), checked November 2026; LHDN, Navigasi HASiL 2026 (YA2025 resident rates, filing dates, record keeping), 2026; LHDN, Tax Treatment, Residents and Non-Residents (182-day test), checked November 2026; LHDN, who is taxable (non-residents 30%, no reliefs), checked November 2026; LHDN, Program Memfail Borang Nyata bagi Tahun 2026, checked November 2026; LHDN, Nota Penerangan Borang BE Tahun Taksiran 2025, checked November 2026; Chartered Tax Institute of Malaysia, technical note on the Income Tax (Exemption) (No. 2) Order 2019, P.U.(A) 55/2019, 6 March 2019; Bernama, Budget 2027 individual tax measures, 9 October 2026; The Star, “Budget 2027: Lower income tax for RM70,000 to RM150,000 range”, 9 October 2026
Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 13 November 2026, not tax, legal or financial advice. Tax rates, rulings and deadlines change, and your residence status and other income matter; confirm with LHDN or a licensed tax agent before you file.