Malaysia vs Indonesia
Malaysian property tax for Indonesian owners
An Indonesian who owns a home in Malaysia deals with two tax systems: Malaysia taxes the property where it stands, and Indonesia taxes its residents on worldwide income. This page compares the two as at October 2026 and explains how the 1991 Indonesia–Malaysia tax treaty and the PPh Pasal 24 credit stop the same income being taxed twice in full.
In short
Key points
- Indonesian citizens buy in Malaysia as foreigners: stamp duty on the transfer of a home is a flat 8% from 1 January 2026.
- Indonesia’s BPHTB, PBB-P2 and the 2.5% final tax on transfers apply to Indonesian property only, not to your Malaysian unit.
- Malaysia taxes the rent at 30% of net income if you are non-resident there; as an Indonesian tax resident you also declare it in your SPT and claim credit under PPh Pasal 24.
- On sale, Malaysian RPGT is 30% in the first five years and 10% from the sixth, and the buyer retains 7% of the price.
- The property itself goes on the asset list in your annual SPT at acquisition cost.
At a glance
Malaysia and Indonesia side by side
How each country taxes a home at each stage.
| Stage | Malaysia (you as a foreign owner) | Indonesia (home rules) |
|---|---|---|
| Buying | Stamp duty on transfer: flat 8% for foreigners on residential homes from 1 January 2026; 0.5% on a loan agreement | BPHTB up to 5% (set by each region, above a tax-free threshold of at least Rp60 million); VAT on new homes from developers |
| Owning | Quit rent to the state and assessment to the local council | PBB-P2 land and building tax, up to 0.5% a year, set by the region |
| Renting | Non-resident individuals: flat 30% of net rent | Final 10% tax on gross rent from Indonesian land and buildings |
| Selling | RPGT for non-citizens: 30% in years 1–5, 10% from year 6; buyer retains 7% | Final 2.5% tax on the transfer value of Indonesian land and buildings, paid by the seller |
| Foreign income | Malaysian-source rent and gains taxed in Malaysia | Residents taxed on worldwide income at 5%–35%, with PPh Pasal 24 credit for foreign tax |
Sources: LHDN RPGT rates; MOF Budget 2026 tax measures; DJP (UU PPh, UU HPP, P3B text); PP 34/2016; UU 1/2022 (HKPD) via Indonesian tax guides; seen October 2026.
Buying
Buying costs: what replaces BPHTB
In Malaysia there is no regional acquisition tax like BPHTB. The main tax on purchase is stamp duty.
Malaysian citizens pay stamp duty on a 1%–4% sliding scale. Foreign individuals (other than Malaysian permanent residents) and foreign companies pay a flat rate, which the Budget 2026 tax measures raised from 4% to 8% for residential homes transferred from 1 January 2026. A Malaysian loan agreement adds 0.5%.
States also set minimum prices for foreigners and require consent. Johor and Kuala Lumpur generally start at RM1 million, and Johor charges foreign buyers a consent levy of 3% of the price or RM30,000, whichever is higher, since 1 July 2025. Indonesia’s 2026 VAT relief on new homes (PMK 90/2025) is for homes in Indonesia and does not help with a Malaysian purchase.
For the full purchase route, see buying Malaysian property from Indonesia (in Indonesian: beli properti Malaysia dari Indonesia), and total the costs in the buying costs calculator.
Owning
Annual charges in place of PBB
Quit rent (cukai tanah)
Paid once a year to the state land office; strata units pay parcel rent (cukai petak). In Johor it is due from 1 January and in arrears from 1 June.
Assessment (cukai taksiran)
Paid to the local council, usually twice a year, based on the annual value the council sets. It plays the role PBB-P2 plays in Indonesia.
Indonesian reporting
While you are an Indonesian tax resident, list the Malaysian property on the asset list of your annual SPT at acquisition cost. Reporting it does not itself create tax if the funds came from income already reported.
Renting
Rent: taxed in Malaysia, declared in Indonesia
This is where the two systems overlap most.
- Malaysia first: if you spend fewer than 182 days a year in Malaysia you are normally non-resident there and pay a flat 30% on net rent, filed on Form M. Allowable expenses generally include assessment, quit rent, loan interest, fire insurance, repairs and rent-collection commission.
- Indonesia second: an individual who lives in Indonesia, or stays more than 183 days in 12 months, is a resident taxpayer on worldwide income. Malaysian rent is added to other income and taxed at the progressive rates of 5%, 15%, 25%, 30% and 35%.
- Not the 10% final tax: Indonesia’s final tax on rent applies to Indonesian land and buildings. Foreign rent goes into ordinary income in the SPT.
- Credit: Malaysian tax paid is credited under PPh Pasal 24, limited per country to the Indonesian tax on that income. Keep the LHDN assessment and payment proof.
Residential lettings fall outside Malaysia’s service tax on rental and leasing, which applies to commercial property. To check whether the rent covers costs after Malaysian tax, use the rental yield calculator.
The treaty
The Indonesia–Malaysia tax treaty
The agreement was signed in Kuala Lumpur on 12 September 1991; DJP publishes the text as modified by the MLI.
Article 6
Income from immovable property, including rent, may be taxed in the country where the property is, so Malaysia taxes rent from your Malaysian unit.
Article 13
Gains from transferring immovable property may be taxed where the property is situated.
Article 22
Indonesia gives a credit for the Malaysian tax, capped at the Indonesian tax on the same income.
“May be taxed” gives Malaysia the first right; it does not remove Indonesia’s right for its residents. Whether RPGT on a sale qualifies for credit, and how a foreign capital gain is computed in your SPT, should be confirmed with a konsultan pajak before you sell.
Selling and next steps
Selling, and a checklist
| Disposal | Foreign individual RPGT |
|---|---|
| Years 1–5 | 30% |
| Year 6 onwards | 10% |
Source: LHDN, RPGT rates (Part III of Schedule 5, from 1 January 2019), seen October 2026.
- The buyer retains 7% of the price and pays it to LHDN within 60 days; any excess over your final RPGT is refunded. See selling property in Johor.
- Keep the sale and purchase agreements, stamp duty and legal fee receipts, tenancy agreements, quit rent and assessment bills, Form M and RPGT filings, and bank records of funds sent from Indonesia.
- Choose the ownership structure before you sign; see ownership structures.
- Make a Malaysian will for the property; see will writing in Malaysia.
Straight answers
Frequently asked questions
Do Indonesians pay tax on property bought in Malaysia?
Yes. You pay Malaysian stamp duty when you buy (8% for a foreigner buying a home from 2026), quit rent and assessment every year, income tax on any rent, and RPGT when you sell. As an Indonesian resident you also declare the asset and income in your SPT.
Must I report Malaysian property in my SPT?
Yes. Indonesian resident taxpayers list all assets, including those abroad, in the SPT asset list at acquisition cost, and declare rent and sale gains as income.
How is Malaysian rent taxed for an Indonesian resident?
Malaysia taxes net rent at 30% if you are non-resident there. Indonesia then taxes the same rent at progressive rates and lets you credit the Malaysian tax under PPh Pasal 24, up to the Indonesian tax on that income.
What is the RPGT rate for Indonesians selling in Malaysia?
30% of the gain if sold within five years and 10% from the sixth year, for individuals who are not Malaysian citizens or permanent residents. The buyer withholds 7% of the price for LHDN.
Does Indonesia's 2.5% final tax apply when I sell my Malaysian unit?
That final tax is for transfers of land and buildings in Indonesia. A gain on Malaysian property is reported in your SPT under the ordinary rules; confirm the treatment with a tax consultant.
Compare
Property tax: Malaysia and other countries
Other guides
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