Rental Income Tax in Malaysia (YA 2026)
A tax resident renting out a unit at RM5,000 a month (RM60,000 a year), with no other income and no expenses, pays RM 1,610 on the rent for YA 2026. A non-resident pays a flat 30%: RM 18,000. A small company (SME) pays 15%: RM 9,000. Only the net rent, after allowable expenses, is taxed. For a resident, rent is added to other income, so the tax on it rises with what else you earn.
Updated 26 Oct 2026 · Ann Ong, PropNex Realty
Am I a tax resident?
Residence is about days spent in Malaysia, not citizenship. A foreigner who lives here most of the year is a tax resident; a Malaysian working abroad for most of the year may not be. You are a tax resident for a year if you are:
- ●in Malaysia for at least 182 days in the calendar year, or
- ●in Malaysia for fewer than 182 days, but that stay is linked to a stretch of 182 or more consecutive days running into the previous or following year, or
- ●in Malaysia for 90 days or more in the year, and resident or present for 90 days or more in any 3 of the 4 previous years.
Resident vs non-resident: tax on rent
| Monthly rent | Resident | Non-resident |
|---|---|---|
| RM 2,000 | RM 0 | RM 7,200 |
| RM 3,000 | RM 0 | RM 10,800 |
| RM 5,000 | RM 1,610 | RM 18,000 |
| RM 8,000 | RM 6,930 | RM 28,800 |
| RM 10,000 | RM 12,150 | RM 36,000 |
| RM 15,000 | RM 27,150 | RM 54,000 |
Yearly tax, rented 12 months, no other income or expenses. Residents get the RM9,000 self relief.
Resident tax rates (YA 2026)
| Chargeable income | Rate on this slice |
|---|---|
| RM0 – RM5,000 | 0% |
| RM5,001 – RM20,000 | 1% |
| RM20,001 – RM35,000 | 3% |
| RM35,001 – RM50,000 | 6% |
| RM50,001 – RM70,000 | 11% |
| RM70,001 – RM100,000 | 19% |
| RM100,001 – RM400,000 | 25% |
| RM400,001 – RM600,000 | 26% |
| RM600,001 – RM2,000,000 | 28% |
| Above RM2,000,000 | 30% |
| Non-resident (whole amount) | 30% |
Budget 2027 proposes lower rates from YA 2027; they are not law yet.
Deductible rental expenses
- ●What is taxed: the net rent, which is the gross rent received in the year minus the expenses wholly incurred to earn it.
- ●Deductible: assessment (cukai taksiran) and quit rent (cukai tanah), interest on the loan used to buy the property, fire insurance, repairs and maintenance, service charges and sinking fund, and the agent's fee or legal cost of renewing a tenancy.
- ●Not deductible: the cost of finding the first tenant for a property (agent commission, advertising, the first tenancy agreement), renovations and improvements, and loan principal.
- ●Losses: a rental loss cannot be set against your salary or other income, but rent from all your properties is pooled, so a loss on one unit reduces the profit on another in the same year.
Forms and deadlines
- ●Residents with no business income: Form BE by 30 April.
- ●Residents with business income: Form B by 30 June.
- ●Non-residents: Form M by 30 April, or 30 June with business income.
- ●LHDN usually allows 15 extra days for e-Filing on MyTax.
Owning through a company (Sdn Bhd)
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- ●Rate: 24% of the company's chargeable income.
- ●SME rate: 15% on the first RM150,000, 17% on the next RM450,000, then 24%.
- ●SME means paid-up capital of RM2.5 million or less, gross business income of RM50 million or less, and no more than 20% owned by non-SMEs or foreigners.
- ●At RM5,000 a month: RM 9,000 as an SME, RM 14,400 at 24%.
- ●Taking money out: salary is taxed at personal rates, and dividends above RM100,000 a year pay 2%.
What you need
- ●A Sdn Bhd registered with SSM
- ●At least one director who lives in Malaysia
- ●A licensed company secretary
- ●A company bank account; the purchase, loan and tenancy are in the company's name
- ●Yearly accounts (usually audited) and a Form C tax return
These running costs mean a company usually pays off only when your personal income is already high.
Tip from Ann
Foreigners who want a property below the RM1 million minimum in Kuala Lumpur can buy through a Sdn Bhd where a Malaysian holds 51% and the foreigner 49%. Choose a partner you trust, and have a lawyer set it up.
Rental Income Tax FAQ
How much tax do I pay on rental income in Malaysia?
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Only the net rent is taxed. A tax resident's net rent is added to their other income and taxed at 0% to 30%. On RM5,000 a month with no other income, the tax is RM 1,610 a year; with RM100,000 of other income, the same rent adds RM 14,460. A non-resident pays a flat 30%, RM 18,000.
Is rental income taxed separately from my salary?
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No. For a tax resident, net rent and salary are added together and taxed as one amount, so the rent is taxed at your highest rates. The calculator above shows only the extra tax the rent adds.
Do foreigners pay tax on rental income in Malaysia?
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Yes. A non-resident owner pays a flat 30% on net rental income from Malaysian property, with no personal reliefs. A foreigner who is in Malaysia for 182 days or more in the year is a tax resident and pays the progressive rates instead.
How does a foreigner report rental income to LHDN?
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Register for a tax number on LHDN's MyTax portal (e-Daftar) with your passport, then activate e-Filing. Each year, declare the net rent on the form for your status: Form M if you are a non-resident, which covers most overseas owners, or Form BE (Form B with business income) if you were in Malaysia 182 days or more and are a tax resident. File by 30 April, or 30 June with business income, with 15 extra days for e-Filing, and pay any balance by the same date through MyTax or online banking. No tax is withheld from rent paid to a non-resident landlord, so the owner must file; many overseas owners appoint a licensed tax agent to handle it.
Which rental expenses can I deduct?
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Assessment and quit rent, interest on the loan used to buy the property, fire insurance, repairs and maintenance, service charges and sinking fund, and the agent's fee or legal cost of renewing a tenancy. The cost of finding the first tenant, renovations and loan principal are not deductible.
What if my rental makes a loss?
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A rental loss cannot be set against your salary or other income. Rent from all your properties is pooled, so a loss on one unit reduces the profit on another in the same year.
Which form do I use to report rental income, and when is it due?
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Residents with no business income file Form BE by 30 April of the following year. Residents who also have business income file Form B by 30 June. Non-residents file Form M by 30 April, or 30 June with business income. LHDN usually allows 15 extra days for e-Filing.
Does a Sdn Bhd pay less tax on rent than I would?
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Not always. A company pays 24%, or 15% to 17% on the first RM600,000 if it qualifies as an SME, but you pay again on the salary or dividends you take out (2% on dividends above RM100,000 a year), and the company has running costs. A resident whose total chargeable income stays under about RM100,000 usually pays less at personal rates.
How do I report rental income in Malaysia, step by step?
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1. Get a tax number: most Malaysians already have one; otherwise register on MyTax (e-Daftar) and activate e-Filing. 2. Keep records: the tenancy agreement, rent received, and receipts for assessment, quit rent, loan interest, insurance, repairs and service charges, which LHDN can ask for up to seven years later. 3. Work out the net rent: all rent received in the year minus the allowable expenses, pooled across your properties. 4. File: enter the net rent in the rental income section of Form BE (Form B if you also have business income) on MyTax by 30 April (30 June for Form B). 5. Pay any balance by the same deadline through MyTax or online banking; if too much was deducted during the year, LHDN refunds the difference to your bank account.