The short answer
As at October 2026, a home in Malaysia meets a tax or government charge at four points:
- Buying: stamp duty on the transfer, and 0.5% of your loan on the loan agreement. A foreign buyer of a home pays a flat 8% on the transfer.
- Owning: quit rent (or parcel rent for a strata unit) to the state land office once a year, and assessment tax to the local council twice a year.
- Renting out: income tax on the net rent, filed with LHDN, and stamp duty on the tenancy agreement, which the tenant normally pays.
- Selling: Real Property Gains Tax on the gain, with 3% or 7% of your price held back by the buyer and sent to LHDN.
The yearly charges are small next to stamp duty, but they are the ones people forget, and they come every year for as long as you own the unit. For homes where these costs have already been looked up, WhatsApp Shyan Yee at +60 17-279 8932. Want me to work it out for your own case? WhatsApp +60 17-279 8932.
The whole lifecycle on one page
| Stage | Tax or charge | Paid to | How often | Who pays |
|---|---|---|---|---|
| Buying | Stamp duty on the transfer (MOT or deed of assignment) | LHDN | Once | Buyer |
| Buying | Stamp duty on the loan agreement | LHDN | Once | Borrower |
| Owning | Quit rent (cukai tanah) or parcel rent (cukai petak) | State land office | Every year | Registered owner |
| Owning | Assessment tax (cukai taksiran / cukai pintu) | Local council | Twice a year | Owner |
| Renting out | Income tax on rental income | LHDN | Every year, in your return | Landlord |
| Renting out | Stamp duty on the tenancy agreement | LHDN | Each tenancy | Tenant (main copy); landlord (duplicate) |
| Selling | Real Property Gains Tax | LHDN | Once | Seller |
| Selling | Part of the price held back by the buyer | LHDN | Once, within 60 days | Buyer remits it, from the seller's price |
The maintenance fee and sinking fund are not taxes. They go to the building's management body; see maintenance fee and sinking fund.
1. Buying: stamp duty (summary)
Stamp duty is charged on documents, not on the deal itself. Two documents matter for a buyer.
| Document | Malaysian citizen or permanent resident | Not a citizen and not a permanent resident, or a foreign company |
|---|---|---|
| Transfer of the property | 1% on the first RM 100,000, 2% up to RM 500,000, 3% up to RM 1,000,000, 4% above | Flat 8% for residential property sold to them from 1 January 2026; flat 4% for other property |
| Loan agreement | 0.5% of your loan | 0.5% of your loan |
The duty on the transfer is worked out on the price or the market value, whichever is higher. Example: on a RM 1,000,000 home, a citizen pays RM 24,000 on the transfer (RM 1,000 + RM 8,000 + RM 15,000), while a foreign buyer pays RM 80,000.
For the 8% rate, "residential property" means a house, condominium, apartment, flat, serviced apartment or SOHO solely to be used as a dwelling (Finance Act 2025, section 26). A serviced apartment or SOHO not meant solely as a dwelling falls under the 4% rate.
A Malaysian citizen buying a first home with a market value of RM 500,000 or less can be exempt from both documents, for sale and purchase agreements signed up to 31 December 2027 (P.U.(A) 448/2025 and 449/2025), on the conditions in the stamp duty guide, which also has worked examples at several prices. LHDN's statutory declaration form for this exemption asks the buyer to confirm that the home is not a SOHO, SOFO, SOVO or serviced apartment.
What is new for 2027. LHDN is moving stamp duty to self-assessment in phases. Tenancy and lease documents, security documents such as loan agreements, and general stamping moved on 1 January 2026. Transfers of real property that do not involve a valuation by the government valuation department (JPPH) follow on 1 January 2027. In practice your lawyer still prepares and submits the transfer; the change is in how the duty is declared and paid.
2. Owning: quit rent (cukai tanah) or parcel rent
What it is. A yearly charge on land, set by the state and collected by the state land office. For a unit with its own strata title, the land office bills each parcel separately as parcel rent, or cukai petak. Selangor's e-Tanah payment page, for example, covers both quit rent and parcel rent.
Who pays. The Selangor land office points to sections 93 and 95 of the National Land Code: the registered owner must pay, even if no bill arrives. It also says a buyer becomes responsible after the sale and purchase agreement is signed.
When. The National Land Code sets the rule for the states of Peninsular Malaysia and the Federal Territories (Kuala Lumpur, Putrajaya and Labuan); Sabah and Sarawak have their own land laws. Under section 94, the rent for a calendar year "shall fall due in full on the first day of that year" and is treated as in arrears from 1 June. Selangor's land office puts it as payment between 1 January and 31 May, with a late charge after 31 May. Example: the 2027 bill falls due on 1 January 2027, and if it is still unpaid on 1 June 2027 it is in arrears.
How much. Quit rent depends on the state, the land category and the land area or parcel; your bill shows the amount. You can look up your own:
| Where the property is | Where to check and pay |
|---|---|
| Kuala Lumpur, Putrajaya, Labuan | PTG Wilayah Persekutuan e-Bayaran (search by account, title or strata number) |
| Selangor | Selangor e-Tanah, "Semakan dan Bayaran Cukai Tanah dan Cukai Petak" (14-digit account number) |
| Other states | That state's land office (Pejabat Tanah dan Galian) portal |
3. Owning: assessment tax (cukai taksiran)
What it is. A local council rate under the Local Government Act 1976. DBKL describes it as the charge on owners that pays for services, maintenance and development of the city.
How it is worked out. Every council uses the same formula:
Assessment tax a year = annual value × the council's rate for that type of property
The annual value is the council's estimate of the gross yearly rent the property could reasonably fetch if it were let. It applies even if you live in it yourself. The rate is set by each council by type of property. Two examples from official pages:
| Type of property | DBKL, inside the 36-sq-mile city area | DBKL, outside it | MBPJ (Petaling Jaya) |
|---|---|---|---|
| Residential building | 4% | 4% | 4% (residential); 3% (flat, apartment, condominium) |
| Serviced apartment | 7% | 5% | 3.5% |
| Low-cost flat | 2% | 2% | 2% (low-cost high-rise) |
| Commercial building | 10% | 8% | 5% |
When. MBPJ asks for the first half (January to June) before 28 February and the second half (July to December) before 31 August. DBKL also bills in halves; its own example shows a yearly RM 528 split into RM 264 every six months. Check your council's dates on the bill.
Things owners ask:
- An empty unit still pays. DBKL says vacancy is not an exemption, but you can apply to DBKL's Finance Department for a vacancy allowance.
- Why your bill differs from your neighbour's. DBKL lists floor area (including extensions), the position of the unit (such as a corner unit) and the use of the property.
- You can object. When the council sends a notice amending the valuation list, you can object in writing within the period stated, on the grounds in section 142 of the Act - for example that the proposed annual value is too high.
- Tell the council when you buy or sell. MBPJ asks owners to submit Form I within 3 months of a transfer, under section 160 of the Act, so the bill goes to the right person.
4. Renting out: income tax on the rent
Who is taxed, and at what rate, depends on residence, not nationality. Under section 7 of the Income Tax Act 1967, you are generally resident for a year if you are in Malaysia for 182 days or more in it, with further tests for shorter stays linked to earlier or later years.
| Your status for the year | How your rental income is taxed |
|---|---|
| Resident (Malaysian or foreign) | Added to your other income and taxed at the resident scale, from 0% up to 30% on income above RM 2,000,000 (YA 2023 to 2025 scale, the latest LHDN publishes), with personal reliefs |
| Non-resident (Malaysian or foreign) | Flat 30%, with no personal reliefs |
So a foreign professional who lives here most of the year is taxed like a Malaysian, and a Malaysian working overseas who lets out a home here can be taxed at the non-resident rate. Check your status each year.
The tax is on the net rent. LHDN's individual FAQ says the expenses can be deducted from the gross rent, as long as each one is an allowable expense. LHDN's Public Ruling 12/2018 on income from letting of real property gives the examples:
| Usually deductible against rent (ordinary letting) | Not deductible |
|---|---|
| Assessment tax and quit rent | Costs of getting the first tenant: advertising, legal cost of the first tenancy agreement, its stamp duty, agent's commission |
| Interest on the loan used to buy the let property | Loan principal |
| Fire insurance premium on the let property | |
| Rent collection fees, and legal costs to enforce collection | |
| Costs of renewing a tenancy or changing tenant | |
| Ordinary repairs that keep the property in its existing state |
Three rules from the same ruling that catch owners out:
- The rental source starts on the day the property is first let, not when you bought it or started advertising it.
- A loss from ordinary letting cannot be carried forward to later years, or set against your other income.
- Rent received in advance is taxed in the year you receive it.
The ruling also treats letting as a business only where the owner provides maintenance or support services comprehensively and actively. Most single-unit landlords are on the ordinary (non-business) basis.
A quick way to size it. For a non-resident, every RM 10,000 of net rental income carries RM 3,000 of tax at the flat 30%. For a resident, it depends on which band your total income reaches.
Filing. Residents with no business income file Form BE; non-residents file Form M. Deadlines are published each year in LHDN's return form programme.
5. Renting out: stamp duty on the tenancy
A tenancy agreement is stamped like any other instrument. LHDN's guideline (30 June 2026) sets the duty on the yearly rent:
| Tenancy term | Duty for every RM 250 of yearly rent, or part of it |
|---|---|
| Up to 1 year | RM 1 |
| Over 1 year to 3 years | RM 3 |
| Over 3 years to 5 years | RM 5 |
| Over 5 years | RM 7 |
On a one-year tenancy at RM 12,000 a year, that is 48 units of RM 250, so RM 48. The tenant pays the duty on the main agreement and the landlord pays on the duplicate. Since 1 January 2026 tenancies are stamped under self-assessment through MyTax.
6. Selling: RPGT (summary)
When you sell, Real Property Gains Tax is charged on the gain - the price after allowable costs, less what you paid including the costs of buying. The rate depends on who you are and how long you held the property.
| Year of sale | Citizen or permanent resident | Not a citizen and not a permanent resident |
|---|---|---|
| Within the first 3 years | 30% | 30% |
| 4th year | 20% | 30% |
| 5th year | 15% | 30% |
| 6th year onwards | 0% | 10% |
What reaches you on completion. The buyer must hold back part of the price and send it to LHDN within 60 days of the sale: 3% if you are a citizen or permanent resident, 7% if you are not. From the 2026 year of assessment the buyer may instead send the lower amount of tax you have worked out in your return, if you tell the buyer that figure before the money is sent. Either way, the amount sent is set against your RPGT. On a RM 1,000,000 sale, 7% is RM 70,000 held back from a foreign seller and 3% is RM 30,000 from a Malaysian seller.
The rates for companies, the exemptions and the filing steps are in the RPGT guide.
7. Service tax on professional fees
Legal fees, agent fees and valuation fees are not taxes, but service tax is added to a taxable professional service. The Royal Malaysian Customs Department's rate for most taxable services, legal services included, is 8% from 1 March 2024.
Example: on a RM 1,000,000 subsale, the scale fee for the sale agreement under the Solicitors' Remuneration Order 2023 is RM 11,250 (1.25% on the first RM 500,000 and 1% on the next RM 500,000). Service tax at 8% adds RM 900. The stamp duty your lawyer pays for you is a disbursement, passed on at cost; it is not part of the fee. The legal fees guide has the full scale. Ask every professional for a written quote that shows the fee, the service tax and the disbursements as separate lines.
8. Budget 2027: what is proposed (not yet law)
The Budget 2027 speech in October 2026 proposes a wider first-home stamp duty exemption for Malaysian citizens:
| First home price | Proposed relief |
|---|---|
| Up to RM 500,000 | Full exemption |
| RM 500,001 to RM 750,000 | Full exemption on the first RM 500,000, and 50% on the rest |
| Agreements covered | Sale and purchase agreements dated 1 January 2027 to 31 December 2030 |
Example: on a RM 700,000 first home, the transfer duty today is RM 15,000 (RM 1,000 + RM 8,000 + RM 6,000), because the current exemption stops at RM 500,000. Under the proposal, the RM 9,000 on the first RM 500,000 would be waived in full and half of the RM 6,000 on the rest, leaving RM 3,000.
This is a proposal. It applies only once Parliament passes the law and the exemption order is gazetted. The speech did not announce a change to the 8% rate for foreign buyers or to RPGT. The stamp duty guide shows how the proposal would work on a real price.
What is different for a foreign owner
| Item | Malaysian citizen or PR | Foreign owner (not a citizen, not a PR) |
|---|---|---|
| Stamp duty on the transfer | 1% to 4% by slice | Flat 8% on a home solely to be used as a dwelling (4% on other property) |
| First-home exemption | Available on conditions | Not available |
| Stamp duty on the loan | 0.5% of your loan | 0.5% of your loan |
| Quit rent and assessment tax | Rate set by the land and the property type | Same |
| Income tax on rent | Depends on residence: resident scale, or flat 30% if non-resident | Same rule; most overseas owners are non-resident, so flat 30% on the net rent |
| RPGT from the 6th year | 0% | 10% |
| Part of the price held back on sale | 3% | 7% |
A foreign buyer also needs approval from the state before the purchase, and in Kuala Lumpur that means consent from the land authority; see land authority consent for foreign buyers. States also set a minimum price for foreigners; see the foreign buyer guide.
A worked example: a RM 1,000,000 condominium in Kuala Lumpur
This shows what is known and what you must look up. It is not a quote for any particular unit.
| Stage | Malaysian citizen or PR | Foreign buyer | Where the figure comes from |
|---|---|---|---|
| Stamp duty on the transfer | RM 24,000 (1,000 + 8,000 + 15,000) | RM 80,000 (8%) | LHDN stamp duty guideline |
| Stamp duty on the loan | 0.5% of your loan | 0.5% of your loan | Stamp Act 1949 |
| Quit rent or parcel rent, each year | Amount on your bill, due 1 January | Same | Look up on PTG WP e-Bayaran |
| Assessment tax, each year | Annual value × 4% (residential) or × 7% (serviced apartment, inside the city area) | Same | DBKL rate table; annual value set by DBKL |
| Income tax on rent, each year, if let | Resident scale on the net rent (or 30% if non-resident) | 30% of the net rent if non-resident | LHDN |
| Held back on a sale at RM 1,000,000 | RM 30,000 (3%) | RM 70,000 (7%) | LHDN RPGT retention rules |
Why the title type matters for the yearly bill. In Kuala Lumpur many high-rise homes are sold as serviced apartments. DBKL's own example uses an annual value of RM 13,200. At the residential rate of 4% that is RM 528 a year. At the serviced-apartment rate inside the city area, 7%, the same annual value would be RM 924 a year; outside it, at 5%, RM 660. The annual value of your actual unit is set by DBKL, so treat these as an illustration of the rate gap, not as your bill.
How to budget for these
- Stamp duty is the big number; budget it first. For a foreign buyer of a RM 1,000,000 home it is RM 80,000, and it is easy to underestimate because it is not in the price.
- Check the title type before comparing two projects. A serviced apartment in Kuala Lumpur carries a higher DBKL rate than a residential building, so two units with the same rent can carry different assessment tax every year.
- Ask for the last bills on a subsale. Before you sign, ask the seller for the latest quit rent and assessment receipts, and let your lawyer confirm both are paid up to completion.
- If you will let the unit, keep receipts from day one - loan interest statements, insurance, repairs, quit rent and assessment. They decide how much of the rent is taxed, and later what counts as your cost for RPGT.
- Do not count on a proposal. The Budget 2027 first-home relief is worth tracking, but plan every purchase on the rules in force.
Common mistakes
- Treating quit rent and assessment tax as the same bill. They go to different bodies, on different dates.
- Not updating the owner's name with the council after buying. The bills keep going to the previous owner while your arrears grow.
- Assuming a foreign passport means 30% on rent. It is your days in Malaysia that decide; residents use the resident scale.
- Claiming the costs of finding the first tenant. Advertising, the first tenancy agreement and the first agent's commission are not deductible.
- Expecting the full sale price on completion. 3% or 7% goes to LHDN first.
Official sources
The figures above were checked on 22 October 2026 against:
- LHDN: Guideline on stamp duty for instruments under the First Schedule of the Stamp Act 1949 (30 June 2026; transfer rates, foreign 8%, tenancy rates, who pays)
- LHDN: Stamp Duty Self-Assessment System (last updated 28 August 2026)
- LHDN: Overview of Stamp Duty (last updated 3 August 2026)
- LHDN: RPGT rates (last updated 23 June 2026)
- LHDN: Retention and remittance by acquirer (last updated 25 May 2026)
- LHDN: Introduction to individual income tax (non-resident flat rate; last updated 8 August 2026)
- LHDN: Individual tax rates (last updated 26 June 2026)
- LHDN: Residence status, section 7 (last updated 10 August 2026)
- LHDN: Individual FAQ, rental expenses (last updated 26 June 2026)
- LHDN Public Ruling No. 12/2018: Income from Letting of Real Property
- DBKL: FAQ, Valuation and Property Management Department (assessment tax)
- MBPJ: General information on valuation and assessment tax (July 2025) and MBPJ FAQ
- Selangor Land and Mines Office: FAQ, Revenue Division (updated 25 July 2025) and Selangor e-Tanah payment
- Federal Territories Land and Mines Office: e-Bayaran
- National Land Code (Act 828), AGC.pdf) (section 94: when rent is due and in arrears)
- Finance Act 2025 (Act 874) (section 26: definition of residential property)
- Malaysian Bar Circular No 128/2026 (first-home exemption orders P.U.(A) 448/2025 and 449/2025, to 31 December 2027)
- Solicitors' Remuneration Order 2023, P.U.(A) 207/2023 and Royal Malaysian Customs: MySST (service tax 8% from 1 March 2024)
- Ministry of Finance: Budget 2027 speech (paragraph 56, checked 9 October 2026)
Rates and dates change with each Budget and each council's valuation list. To compare the yearly costs of the homes you are considering, WhatsApp Shyan Yee (REN 46305, IQI Realty) at +60 17-279 8932.
Frequently Asked Questions
What taxes do I pay every year on a property in Malaysia?
Two, whether you live in it, let it or leave it empty. Quit rent (cukai tanah), or parcel rent (cukai petak) for a strata unit, goes once a year to the state land office. Assessment tax (cukai taksiran, often called cukai pintu) goes to the local council in two halves a year. If you let the property, income tax on the net rent is added, filed with LHDN once a year.
What is the difference between quit rent and assessment tax?
Quit rent is a charge on the land, set by the state and collected by the land office under the National Land Code. Assessment tax is a local council rate under the Local Government Act 1976, worked out as a percentage of the property's annual value, which the council estimates from the rent the property could reasonably fetch in a year. Different bodies, different bills, different due dates.
When are quit rent and assessment tax due?
In Selangor the land office asks for quit rent and parcel rent between 1 January and 31 May each year, with a late charge after that. MBPJ asks for assessment tax before 28 February (January to June) and before 31 August (July to December). Under the National Land Code, which also applies in Kuala Lumpur, a year's quit rent falls due in full on 1 January and is in arrears if still unpaid on 1 June. Other councils print their own assessment dates on the bill.
How is assessment tax worked out in Kuala Lumpur?
DBKL multiplies the annual value of the property by a rate for its type. Inside the 36-square-mile city area it is 4% for residential buildings and 7% for serviced apartments; outside that area, 4% and 5%. DBKL's own example is an annual value of RM 13,200 at 4%, which is RM 528 a year, or RM 264 every six months.
Do I still pay assessment tax if my unit is empty?
Yes. DBKL says an empty or unoccupied property is not exempt, but the owner can apply for a vacancy allowance through DBKL's Finance Department. The bill is the owner's whether the unit is lived in, let or vacant.
How much tax does a foreigner pay on rent from a Malaysian property?
It depends on days in Malaysia, not passport. A person in Malaysia for fewer than 182 days in the year is generally a non-resident and pays a flat 30% on the net rental income, with no personal reliefs. A foreigner who meets the residence test is taxed at the resident scale like a Malaysian, and a Malaysian living abroad can be a non-resident.
What expenses can I deduct from rental income?
LHDN's Public Ruling 12/2018 gives examples of direct expenses for an ordinary letting - assessment and quit rent, interest on the loan used to buy the property, fire insurance, rent collection and legal costs to enforce it, costs of renewing a tenancy or changing tenant, and ordinary repairs that keep the property in its existing state. Costs to get the first tenant - advertising, the first tenancy agreement, its stamp duty and the agent's commission - are not deductible.
Who pays the stamp duty on a tenancy agreement?
Under the Stamp Act, the tenant pays the duty on the main agreement and the landlord pays on the copy. LHDN's 2026 guideline sets the duty at RM 1 for every RM 250 of yearly rent for a term up to 1 year, RM 3 for over 1 to 3 years, RM 5 for over 3 to 5 years and RM 7 above 5 years. Since 1 January 2026 tenancies are stamped under self-assessment on MyTax.
Do foreigners pay higher quit rent or assessment tax?
No. The published rates are set by the land and the type of property, not by who owns it. A foreign owner of a condominium pays the same council rate as a Malaysian neighbour with the same annual value. Where foreigners pay more is the stamp duty on the transfer, RPGT from the sixth year, and income tax on rent if they are non-resident.
Is the maintenance fee a tax?
No. DBKL draws the line itself - the maintenance fee pays for the common areas of your building, while assessment tax pays for city services such as roads, recreation and infrastructure. You pay both, to different bodies.
Will I receive the full price when I sell?
Not at once. The buyer must hold back part of the price and send it to LHDN within 60 days - 3% where the seller is a Malaysian citizen or permanent resident, 7% where the seller is not a citizen and not a permanent resident. That money is set against your RPGT, and you work out the actual tax in your own return.
Is the first-home stamp duty exemption being widened in 2027?
It has been proposed, not passed. The Budget 2027 speech proposes a full exemption up to RM 500,000 and a partial one up to RM 750,000 for first homes, for agreements dated 1 January 2027 to 31 December 2030. It only applies once the law is passed. It is for Malaysian citizens; foreign buyers are not covered.
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- Stamp Duty Malaysia 2026: How Much on a Property Purchase
- RPGT Malaysia 2026: Rates, Exemptions and How to File
- Maintenance Fee and Sinking Fund in Malaysia (2026 Guide)
- Legal Fees for Property in Malaysia: The SRO 2023 Scale
- The Ultimate Guide to Foreigner Property Ownership in Malaysia (2026)
- Land Authority Consent in KL for Foreign Buyers
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