Renting Out Property in Malaysia: 2026 Tenancy Stamp Duty, Rental Income Tax and the Letting Process
Renting out property in Malaysia changed in two ways in 2026: tenancy stamp duty lost its RM2,400 exemption and went up for leases longer than a year, and you now self-assess and pay it within 30 days of signing. Rental income is still taxed on the net amount (rent minus allowable expenses), at 0–30% for residents and a flat 30% for non-residents. Below are the rules as at September 2026, worked examples, and the checklist I give landlords.
Short answer
Renting out property in Malaysia costs more from 2026: the RM2,400 exemption is gone, and tenancy stamp duty is RM1 per RM250 of annual rent for a term of a year or less, RM3 for one to three years, RM5 to five and RM7 beyond, self-assessed and paid within 30 days. The rent itself is taxed on the net amount, 0-30% for residents and a flat 30% for non-residents.
Key numbers at a glance
| Tenancy stamp duty from 2026 | RM1 / RM3 / RM5 / RM7 per RM250 of annual rent, by term |
|---|---|
| RM2,400 exemption | Removed from 1 Jan 2026 (Finance Act 2025, Item 49) |
| Stamping deadline | Self-assess on e-Duti Setem and pay within 30 days |
| Late stamping penalty | RM50 or 10% within 3 months; RM100 or 20% after that |
| Worked example | RM2,000 a month on a 2-year term: RM288 (RM174 before) |
| Rental income tax | Taxed on net rent; residents 0-30%, non-residents flat 30% |
| Deductible | Assessment, quit rent, loan interest, fire insurance, repairs |
| SST on residential rent | None; residential lettings are excluded |
Key points in 30 seconds
- From 1 January 2026, tenancy stamp duty is RM1, RM3, RM5 or RM7 per RM250 of annual rent (or part of RM250), depending on the term, and the first RM2,400 is no longer exempt.
- Tenancies must be self-assessed and paid through LHDN’s e-Duti Setem within 30 days; late payment costs RM50 or 10% (within 3 months) and RM100 or 20% after that, whichever is higher.
- A 2-year tenancy at RM2,000 a month now attracts RM288 in stamp duty, against RM174 under the old rules.
- Rental income is taxed after deducting assessment, quit rent, loan interest, fire insurance, rent-collection costs and ordinary repairs. First-letting costs and renovations are not deductible.
- Residents pay 0–30% on total chargeable income and non-residents pay a flat 30%. As at September 2026 I found no extension of the 50% residential rent exemption to YA2026.
- Malaysia still has no Residential Tenancy Act, so recovering possession from a defaulting tenant requires a court order.
What to sort out before renting out property in Malaysia
Most owners ask one question after collecting keys: how much rent can I get? It pays to deal with a few basics before you list the unit, because each of them can stall a signed deal later.
- Insurance still valid once tenanted. Check that your fire or houseowner policy covers a let property, and consider householder or loss-of-rent cover. See MRTA vs MLTA and home insurance.
- Building by-laws. The JMB or MC may require tenant registration, limit access cards or ban short stays. See strata by-laws on pets and short-term rentals.
- No arrears. Clear assessment tax (cukai taksiran), quit rent (cukai tanah) and maintenance charges first. See the after-keys checklist and maintenance fees and sinking fund.
- Agent or DIY. Only a Registered Estate Agent (REA) firm may charge a fee; a REN works under an REA. Here is how to verify a REN or REA.
- Inventory and photos. Photograph the unit and list furniture and appliances in a signed schedule to the tenancy. It is your only evidence when deducting from the deposit.
What should a tenancy agreement include, and what deposit is normal?
Malaysia has no dedicated residential tenancy statute yet. The housing ministry (KPKT) has been drafting a Residential Tenancy Act; in February 2026 the minister hoped to pass it within the year, and in August 2026 the deputy minister said the bill was still being finalised. Until then, the tenancy agreement and general law (such as the Contracts Act 1950) govern the relationship, so the clearer your agreement, the better protected you are.
Typical deposit structure
| Item | Common amount | What it is |
|---|---|---|
| Security deposit | 2 months’ rent | Refunded at the end if there is no arrears or damage |
| Utility deposit | 0.5 month’s rent | Refunded once final utility bills are settled |
| Advance rental | 1 month’s rent | The first month’s rent; not refundable |
This is the familiar “2+1+0.5”, roughly 3.5 months’ rent before move-in. Some high-end or expatriate lettings negotiate 3 months’ security deposit instead.
Clauses worth getting right
- Term, rent, due date and late-payment interest
- Option to renew: how the new rent is set and the notice period
- Early termination: for example, after a minimum period with 2 months’ notice, and what happens to the deposit
- Repairs split: minor items for the tenant, structural issues, leaks and landlord-supplied appliances for the landlord, with a ringgit threshold
- No subletting and no short-term letting (especially if the by-laws prohibit it)
- Handover condition and a deadline for returning the deposit
- Who bears the stamp duty (see below)
Skipping the stamping is cheap only until it matters. Duty on a two-year lease at RM2,000 a month is RM288; more than three months late, you add RM100 or 20% of the duty, and the agreement is generally inadmissible in evidence just as you are trying to prove arrears. Recovering possession then needs a court order, because changing the locks or cutting utilities is not open to a landlord here.
Ask Louis directly
Send me the draft tenancy and the monthly rent and I'll work out the stamp duty for the term you're signing and flag the clauses I would change.
Give me the building and the unit layout and I'll send recent achieved rents for comparable units, plus the stamp duty for the term you have in mind.
How is tenancy agreement stamp duty calculated in 2026?
This is the biggest change for landlords this year. Item 49 of the Stamp Act’s First Schedule, as amended by the Finance Act 2025, applies from 1 January 2026: the first RM2,400 of annual rent is no longer exempt, and rates are higher for terms beyond one year.
| Term | From 2026 | Up to 2025 (after deducting RM2,400) |
|---|---|---|
| 1 year or less | RM1 | RM1 |
| More than 1 and up to 3 years | RM3 | RM2 |
| More than 3 and up to 5 years | RM5 | RM4 |
| More than 5 years | RM7 | RM4 |
The formula is annual rent ÷ 250, rounded up, multiplied by the rate for the term. For terms longer than a year, duty is based on the annual or average annual rent. Each duplicate copy carries a further RM10.
| Rent / term | Annual rent | Units | Duty from 2026 | Old rules |
|---|---|---|---|---|
| RM1,500 / 1 year | RM18,000 | 72 | RM72 | RM63 |
| RM2,000 / 1 year | RM24,000 | 96 | RM96 | RM87 |
| RM2,000 / 2 years | RM24,000 | 96 | RM288 | RM174 |
| RM3,500 / 2 years | RM42,000 | 168 | RM504 | — |
Self-assessment: stamp within 30 days
- Sign the agreementDuty is assessed on the initial fixed term. A renewal option is not charged upfront; if exercised, the renewed term is stamped separately.
- Self-assess on e-Duti SetemTenancies were in Phase 1 of the Stamp Duty Self-Assessment System from 1 January 2026, so you declare and compute the duty yourself on LHDN’s e-Duti Setem.
- Pay within 30 daysPay within 30 days of signing. Late by up to 3 months: RM50 or 10% of the unpaid duty, whichever is higher. Later than that: RM100 or 20%, whichever is higher.
- Keep the certificateAttach the stamp certificate to the agreement. An unstamped instrument is generally not admissible as evidence, which hurts if you ever need to sue for arrears.
Who pays? Under the Third Schedule of the Stamp Act, the lessee (tenant) is liable for the original and the lessor (landlord) for the copy. The parties can agree otherwise, and tenants usually bear it in practice. Either way, confirm the stamping yourself.
How is rental income taxed in Malaysia, and what can you deduct?
For an individual letting one or two homes, rent is non-business income under section 4(d) of the Income Tax Act 1967. LHDN’s Public Ruling No. 12/2018 allows only direct expenses incurred to produce that rent.
| Deductible | Not deductible |
|---|---|
| Assessment tax, quit rent or parcel rent | Loan principal (only interest counts) |
| Interest on the loan used to buy the property | Legal fees, stamp duty, advertising and agent fees for the first tenancy |
| Fire insurance premium | Renovations, extensions and other capital items |
| Rent-collection fees and legal costs to recover rent | Costs before the property is first let |
| Costs of renewing a tenancy or finding a new tenant | Costs relating to periods of personal use |
| Ordinary repairs that keep the property in its existing state | — |
- Vacant periods: once a property has been let, expenses while it sits empty but is clearly available for letting remain deductible. Expenses before the first letting are not.
- Several properties: can be grouped as one rental source.
- Losses: a section 4(d) rental loss cannot be set against salary and cannot be carried forward.
- Business letting: if you provide comprehensive, active maintenance and services, the income may be business income under section 4(a), which has different rules. Talk to a tax agent.
Resident and non-resident rates
| Chargeable income (RM) | Rate | Cumulative tax (RM) |
|---|---|---|
| 0 – 5,000 | 0% | 0 |
| 5,001 – 20,000 | 1% | 150 |
| 20,001 – 35,000 | 3% | 600 |
| 35,001 – 50,000 | 6% | 1,500 |
| 50,001 – 70,000 | 11% | 3,700 |
| 70,001 – 100,000 | 19% | 9,400 |
| 100,001 – 400,000 | 25% | 84,400 |
| 400,001 – 600,000 | 26% | 136,400 |
| 600,001 – 2,000,000 | 28% | 528,400 |
| Above 2,000,000 | 30% | — |
Non-residents, broadly people in Malaysia for fewer than 182 days in the year (which covers most Singapore-based owners), pay a flat 30% with no personal reliefs. More on owning as a foreigner: renting, tax and selling for foreign owners.
Worked example: a condo let at RM2,000 a month
| Item | RM |
|---|---|
| Gross rent | 24,000 |
| Less: assessment tax | (800) |
| Less: parcel rent | (100) |
| Less: loan interest | (12,000) |
| Less: maintenance charges | (3,600) |
| Less: ordinary repairs | (1,000) |
| Net rental income | 6,500 |
- Resident with RM80,000 of other chargeable income: tax rises from RM5,600 to RM6,835, so the rent costs RM1,235 in tax.
- Resident with RM40,000 of other chargeable income: tax rises from RM900 to RM1,290, an extra RM390.
- Non-resident: RM6,500 × 30% = RM1,950.
Most tax guides treat maintenance charges as deductible service charges. The sinking fund is closer to a reserve, so ask your tax agent how to treat it.
How to declare rental income to LHDN
- Keep recordsThe tenancy agreement, stamp certificate, rent receipts, assessment and quit rent receipts, loan interest statement and repair invoices. LHDN can ask for them.
- Work out net rentUse the method above for each year of assessment (January to December).
- File on e-FilingIndividuals without business income use Form BE; with business income, Form B. For YA2025, Form BE was due 30 April 2026 (e-Filing to 15 May) and Form B 30 June 2026 (e-Filing to 15 July).
- Joint ownersCo-owners generally declare their own share of the rent and expenses; confirm the split with your tax agent.
Can you do Airbnb, and does residential rent attract SST?
Short-term rentals remain a grey area. The national Short-Term Residential Accommodation (STRA) guidelines prepared by KPKT through PLANMalaysia were still not finalised or enforceable in early 2026. Selangor has floated a 180-night annual cap and registration, but these are proposals, not law.
For condo owners, the key authority is the Federal Court’s decision in Innab Salil & Ors v Verve Suites Mont Kiara Management Corporation [2020] 10 CLJ 285: a management corporation may ban short-term letting through house rules. Read your building’s rules before listing on a platform; fines and suspended access cards fall on the owner.
SST: rental and leasing services became subject to service tax from 1 July 2025 (6% from 1 January 2026, with registration only above RM1 million of annual rental), but residential lettings are excluded. An ordinary home landlord charges no SST; commercial lets such as shops and offices may be caught.
Checklist for renting out property in Malaysia
- Set the rent from recent achieved rents for the same building and layout, not asking prices.
- Screen the tenant: IC or passport, employment letter; for foreign tenants, a visa valid for the whole term.
- Sign a clear agreement covering deposit, repairs, renewal, early exit and a short-let ban.
- Stamp the agreement within 30 days at the 2026 rates.
- Collect deposits and advance rent against receipts.
- Hand over with photos and a signed inventory.
- Register the tenant with management and sort out access cards.
- Decide whether utility accounts stay in your name or move to the tenant.
- Declare the net rent in your BE or B form every year.
- Planning to sell one day? Keep repair and improvement receipts; see selling property and RPGT.
Still choosing a unit to buy and let? Rental demand and maintenance fee levels are covered in how to choose a property in Malaysia.
Related questions
Who pays the stamp duty on a tenancy agreement, the landlord or the tenant?
Under the Third Schedule of the Stamp Act, the lessee is liable for the duty on the original and the lessor for the duty on the copy. The parties can agree otherwise in the tenancy, and in practice the tenant usually carries it while the landlord pays the RM10 on each duplicate. What you cannot hand over is the risk: an unstamped agreement hurts the landlord too, so ask for the stamp certificate rather than assume it was done.
Is the 2+1+0.5 deposit set by law?
No. Malaysia has no statutory cap or minimum on residential deposits. The familiar 2+1+0.5, two months’ security deposit, one month’s advance rental and half a month for utilities, is market convention and comes to roughly 3.5 months’ rent before move-in. High-end and expatriate lettings sometimes negotiate three months’ security instead. Whatever you agree, write into the tenancy what the deposit covers and the deadline for returning it.
Can I still deduct expenses while the property sits empty between tenants?
Yes, once it has been let at least once. Under LHDN’s Public Ruling No. 12/2018, expenses during a gap between tenants remain deductible as long as the unit is genuinely available for letting, so assessment tax, quit rent, loan interest and fire insurance still count. What you cannot deduct is anything incurred before the first letting, including the legal fees, stamp duty, advertising and agent’s fee for that first tenancy. A section 4(d) rental loss cannot be set against salary.
Can I sue a tenant for arrears on an unstamped tenancy agreement?
An unstamped instrument is generally not admissible in evidence, so an agreement you never stamped is of little help when you need to prove the term, the rent or the deposit terms. You can stamp it late, but the penalty is RM50 or 10% of the duty within three months and RM100 or 20% after that, whichever is higher, exactly when you least want the cost. Stamp within 30 days and keep the certificate with the agreement.
Frequently asked questions
How do I calculate tenancy agreement stamp duty in Malaysia in 2026?
Divide the annual rent by RM250, round up, and multiply by the rate for the term: RM1 for up to 1 year, RM3 for more than 1 and up to 3 years, RM5 for more than 3 and up to 5 years, and RM7 beyond 5 years. The RM2,400 exemption was removed from 1 January 2026. A 2-year tenancy at RM2,000 a month costs 96 × RM3 = RM288, plus RM10 for each duplicate copy.
What is the penalty for late stamping of a tenancy agreement?
The agreement should be stamped within 30 days of signing. If you pay up to three months late, the penalty is RM50 or 10% of the unpaid duty, whichever is higher. Beyond three months it is RM100 or 20%, whichever is higher. An unstamped agreement is generally not admissible in court, which matters if you ever sue for arrears.
How much tax do I pay on rental income in Malaysia?
Tax is charged on net rent: gross rent minus direct expenses such as assessment tax, quit rent, loan interest, fire insurance and ordinary repairs. Residents add the net rent to their other income and pay progressive rates from 0% to 30%. Non-residents pay a flat 30% on the net rent with no personal reliefs.
Can I deduct renovation costs from rental income?
No. LHDN’s Public Ruling No. 12/2018 treats renovations and improvements as capital expenditure, which is not deductible against section 4(d) rental income. Legal fees, stamp duty, advertising and agent fees for the first tenancy are also excluded. Ordinary repairs that keep the property in its existing condition are deductible.
Is the 50% rental income tax exemption available for YA2026?
As at September 2026 I could not find any official announcement extending the 50% exemption on residential rent (up to RM2,000 a month) to YA2026, and current 2026 tax guides do not list it. Assume it does not apply unless LHDN publishes an extension, and confirm with a tax agent before filing.
Can a landlord in Malaysia evict a tenant without a court order?
No. Malaysia has no residential tenancy act yet, but section 7(2) of the Specific Relief Act 1950 requires a court order to recover possession of an occupied property. Changing locks or cutting utilities can lead to a trespass claim against the landlord. Unpaid rent can be pursued by a warrant of distress or a civil claim.
Do landlords charge SST on residential rent in Malaysia?
No. Rental and leasing services were brought into service tax from 1 July 2025, at 6% from 1 January 2026 with registration required only above RM1 million of annual rental, but residential lettings are specifically excluded. Letting commercial property such as shops or offices may attract SST.
Sources & verification
- LHDN — Public Ruling No. 12/2018: Income from Letting of Real Property
- PwC Worldwide Tax Summaries — Malaysia individual tax rates
- RinggitPlus — Malaysia Personal Income Tax Guide 2026 (YA 2025)
- PropertyGuru — 2026 tenancy agreement stamp duty guide
- StashAway — Tenancy agreement stamp duty Malaysia 2026
- RDS Partners — Key stamp duty changes from 1 January 2026
- Boardroom — Malaysia Stamp Duty FAQ (Apr 2026)
- KPMG — 6% service tax rate for rental or leasing services (2026)
- The Star — Residential Tenancy Bill being finalised (4 Aug 2026)
- Low & Partners — Protecting your rights as a landlord (Specific Relief Act s.7(2), Distress Act)
- iProperty — Short-term rental in Malaysia 2026: legal position
- BurgieLaw — Innab Salil v Verve Suites Mont Kiara MC [2020] 10 CLJ 285 (Federal Court)
- iBilik — Rental deposits in Malaysia explained
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
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Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
Stuck on this step? Ask me directly
Send me your situation — new or subsale, budget, state, and where you are in the process — and I will tell you what to do next and what to watch for.
Give me the building and the unit layout and I'll send recent achieved rents for comparable units, plus the stamp duty for the term you have in mind.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT