Also in: Bahasa Indonesia · Bahasa Melayu
If you plan to rent out your JB property, most people count the rent. Fewer count the tax. Before the rental income becomes part of your investment plan, check this side first.
Your situation is different? Ask me on WhatsApp. I reply myself, usually the same day.
Ask Jason on WhatsAppNon-residents pay a flat 30%
If you are not tax resident in Malaysia (broadly, you spend fewer than 182 days a year here), your Malaysian rental income is taxed at a flat 30%. You do not get the lower progressive rates a local landlord pays, and you do not get personal reliefs on top.
Nobody withholds it for you
This is the part that catches people out. There is usually no automatic withholding: your tenant simply pays you the full rent. That does not mean there is no tax. It means you are responsible for registering with LHDN (the Inland Revenue Board) and declaring the income yourself.
LHDN can cross-check property ownership against tax filings. If your name is on the title and you have never declared rental income, it tends to get noticed eventually, together with penalties.
The good news: it is 30% of net, not gross
Tax is charged on rental income after allowable expenses, such as:
- Interest on the housing loan (interest only, not the principal)
- Assessment tax and quit rent
- Maintenance charges and fire insurance
- Repairs to keep the unit rentable
| Illustration: one year | Amount |
|---|---|
| Rent received (RM2,500 × 12) | RM30,000 |
| Less loan interest | – RM14,000 |
| Less assessment, quit rent, maintenance, insurance, repairs | – RM6,000 |
| Net rental income | RM10,000 |
| Tax at 30% | RM3,000 |
Without the deductions, the same year would cost RM9,000 in tax. Keeping receipts matters.
What about tax at home?
That depends on where you are tax resident. For example, Singapore generally does not tax foreign-sourced income received by individuals, while other countries may tax it and give credit for Malaysian tax paid. Check your own country’s rules with a tax adviser.
If rental income is part of your plan, factor the 30% in from day one, not as a surprise at tax season. The other ongoing costs of owning are in 6 hidden costs nobody tells you about.
Want to know what a JB rental would really return after tax? Send me the unit you are considering and I will run the numbers with you.
General information, not tax advice. Tax rules and allowable deductions can change; confirm your position with LHDN or a tax agent. By Jason Lim (REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6).