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Many people think property investment is simple: buy, rent it out, collect the rent every month, and sell for a profit five or ten years later. But the rent you collect is not your profit. In Malaysia there are taxes, local council charges, maintenance, utility bills and, eventually, tax when you sell. In the video I break down the six most important ones. Here they are in writing.
Your situation is different? Ask me on WhatsApp. I reply myself, usually the same day.
Ask Jason on WhatsApp1. Rental income tax
Some investors think, “I don’t work in Malaysia, I’m just collecting rent, so Malaysian income tax isn’t my concern.” That is not necessarily true. Rent from a Malaysian property can be taxable in Malaysia. Non-resident individuals are generally taxed at a flat 30% on Malaysian-sourced income, including rent, and cannot claim personal reliefs.
The good news: you are taxed on the net, not the gross. Expenses incurred to earn the rent can generally be deducted, such as assessment tax, quit rent, fire insurance, loan interest, rent-collection commissions and ordinary repairs. Initial renovations and improvements are treated differently. Keep every invoice and receipt, and speak to a tax professional about your own position.
2. RPGT when you sell
If your plan is to buy today and sell when prices go up, Real Property Gains Tax matters. Buy at RM1 million, sell at RM1.3 million, and it looks like RM300,000 profit. But the taxable gain is worked out after allowable acquisition and disposal costs, and the rate depends on how long you held the property and who you are:
| Sold within | Malaysian citizen / PR | Foreigner (non-citizen, non-PR) |
|---|---|---|
| Years 1–3 | 30% | 30% |
| Year 4 | 20% | 30% |
| Year 5 | 15% | 30% |
| Year 6 onwards | 0% | 10% |
Add the agent’s fee and legal fees on the sale, and every ringgit of appreciation does not end up in your pocket. Understand this before you buy, not when you are ready to sell.
3. Assessment tax (cukai taksiran)
Charged by the local council where the property sits. In Johor Bahru, which council bills you depends on the exact location. It looks small next to the price, so investors forget it, but you pay it every year whether or not you have a tenant.
4. Quit rent (cukai tanah) or parcel rent
Different from assessment tax: quit rent is a land charge paid to the state. For strata property you may see it as parcel rent (cukai petak). Again not huge on its own, but it adds up with everything else.
5. Utility bills
“But Jason, my tenant pays the utilities.” Usually, yes. But when a tenant moves out and you need a few weeks to clean, repair and find the next one, the electricity and water are on you. Know which accounts are in your name, what deposits are needed, and for some serviced apartment or commercial-title units, check the tariff before you buy. It is not always the same as a residential condo.
6. Maintenance fee and sinking fund
For condominiums and serviced residences, this is usually the biggest ongoing cost. Maintenance pays for security, cleaning, lifts, pool, gym, landscaping, common-area electricity and management. On top of that, owners contribute to a sinking fund for major long-term works such as lift replacement or repainting the building.
Plus: vacancy and repairs
Not a tax or a fixed fee, but every investor needs a buffer. Air-conditioners break, water heaters need replacing, tenants leave and the unit sits empty for a month or two. If your numbers only work with 12 months of occupancy and zero repairs, they are too optimistic.
Example: what does RM3,000 a month really give you?
RM3,000 a month is RM36,000 a year gross. Here is an illustration with example figures. Your actual numbers depend on the building, so always ask for them:
| Item (example figures) | Per year |
|---|---|
| Gross rent (RM3,000 × 12) | RM36,000 |
| Maintenance + sinking fund (RM500/month) | – RM6,000 |
| Assessment tax + quit/parcel rent | – RM950 |
| Insurance | – RM300 |
| Repairs and upkeep | – RM1,500 |
| One month vacancy | – RM3,000 |
| Agent fee to find a tenant (spread per year) | – RM1,500 |
| Before loan interest and income tax | about RM22,750 |
Suddenly RM36,000 does not look like RM36,000 anymore. Don’t only ask “how much can I rent this for?” Ask “how much do I actually keep?” A good investment isn’t necessarily the one with the highest rent. It is the one where the numbers still make sense after every cost is included.
Costs at the point of purchase are a separate topic: see legal fees when buying property and my guide to foreign buyer rules and stamp duty.
Want the real numbers for a unit you are looking at? Send me the project. I will work out the maintenance, taxes and a realistic net return with you.
Sources
- LHDN: RPGT rates
- PropertyGuru: rental income tax in Malaysia (deductible expenses, non-resident rate)
General information checked on 29 September 2026, not tax or financial advice. By Jason Lim (REN 84424, IQI Realty Sdn. Bhd.).