Buying Property Under a Company (Sdn Bhd) in Malaysia: Tax, Financing and When It Makes Sense
Buying property under a company in Malaysia is not a tax shortcut: an Sdn Bhd still pays 10% RPGT from the sixth year where a Malaysian citizen pays 0%, gets none of the individual exemptions, cannot claim the first-home stamp duty exemption, and Bank Negara caps housing loans to non-individual borrowers at 60% of value. Here is every rule you can check as at September 2026, the numbers side by side, and my honest view on when the structure earns its cost.
Short answer
Buying property under a company in Malaysia is usually worse on tax, not better. A Malaysian-incorporated Sdn Bhd is taxed under Schedule 5 Part II of the RPGT Act: 30% in years one to three, 20% in year four, 15% in year five and 10% from the sixth year, where a Malaysian citizen pays 0%. A company gets none of the individual exemptions and no first-home stamp duty exemption, and Bank Negara has capped housing loans to non-individual borrowers at 60% of value since December 2011.
Key numbers at a glance
| Company RPGT (Schedule 5 Part II) | 30% years 1-3, 20% year 4, 15% year 5, 10% from year 6 |
|---|---|
| Citizen or PR individual, year 6+ | 0% – a company never reaches it |
| RPGT exemptions for a company | None (RM10,000/10% and private residence are individual only) |
| Margin of finance, non-individuals | 60% maximum (BNM, from December 2011) |
| Corporate tax YA2026 | SME 15% first RM150k, 17% next RM450k, 24% above RM600k |
| SME foreign-shareholding bar | Above 20% foreign plus non-citizen holding means a flat 24% |
| RPC shares sold by a company | Capital gains tax from 1 Jan 2024: 10% of net gain, or 2% of gross for pre-2024 |
| Audit exemption | SSM Practice Directive 10/2024, two of three criteria over three years |
Key points in 30 seconds
- A Malaysian company is taxed under Schedule 5 Part II: 30% in years 1-3, 20% in year 4, 15% in year 5 and 10% from year 6 — it never reaches the 0% a citizen gets.
- A company cannot claim the RM10,000-or-10% exemption or the once-in-a-lifetime private residence exemption. Both are individual exemptions.
- BNM has capped housing loans to non-individuals at 60% LTV since December 2011; on a RM900,000 home that turns a RM90,000 deposit into RM360,000.
- YA2026 SME rates are 15% on the first RM150,000, 17% on the next RM450,000 and 24% above RM600,000 — but foreign plus non-citizen shareholding above 20% means a flat 24%.
- Since 1 January 2024 a company disposing of RPC shares pays capital gains tax (10% of the net gain, or 2% of gross for pre-2024 assets), not RPGT, so selling the shares is not an escape route.
- No first-home stamp duty exemption for a company, and no stamp duty relief was found for moving a property you already own into your own Sdn Bhd.
What RPGT does a company pay when it sells?
This is the most expensive line in the whole comparison. A Malaysian-incorporated Sdn Bhd is taxed under Part II of Schedule 5, Real Property Gains Tax Act 1976, which applies where the disposer is “a company incorporated in Malaysia”.
| Year of disposal | Malaysian citizen or PR (individual) | Malaysian-incorporated company |
|---|---|---|
| Years 1-3 | 30% | 30% |
| Year 4 | 20% | 20% |
| Year 5 | 15% | 15% |
| Year 6 onwards | 0% | 10% |
For the first five years the two are identical. From the sixth year a citizen pays nothing and a company pays 10% — a rate that has applied with effect from 1 January 2019 (it was 5% from 2014 to 2018) and has not changed since. A company never reaches 0%. Its floor is the same floor a foreign owner has.
A company also gets none of the individual exemptions
- The RM10,000 or 10% of the chargeable gain, whichever is higher exemption (Schedule 4, para 2) is an individual exemption. A company cannot claim it.
- The once-in-a-lifetime private residence exemption (Schedule 3, para 9) is an individual exemption and additionally requires the individual to be a citizen or permanent resident. A company is not eligible at all.
What that costs in ringgit
Same property: bought for RM600,000, sold in year 6 for RM900,000. On purchase, MOT stamp duty RM12,000 plus legal fees of RM7,250 with 8% SST (RM7,830) — incidental costs of RM19,830. On sale, agent’s commission of 3% (RM27,000) with SST (RM29,160) plus the seller’s legal fee of RM10,250 with SST (RM11,070) — selling expenses of RM40,230.
| Year of disposal | Citizen individual | Sdn Bhd |
|---|---|---|
| Year 6 | RPGT RM0 (rate is 0%) | RPGT RM23,994 (10%, no exemption) |
| Year 4 | After the RM23,994 exemption, 20% = RM43,189.20 | 239,940 x 20% = RM47,988 |
Sell in year 4 and the gap is RM4,798.80 — survivable. Sell in year 6 and it is RM23,994 against nothing. The longer you hold and the more it appreciates, the worse the company looks. The full RPGT computation, retention and filing deadlines are in selling property in Malaysia and RPGT 2026.
The usual sequence is incorporating first and asking the bank second. On a RM900,000 home an individual at 90% needs RM90,000 down; a company at 60% needs RM360,000 — RM270,000 more cash, and people discover it at approval stage. The second cost lands on exit: on the same RM239,940 gain, a citizen selling in year six pays nothing and a company pays RM23,994. Both numbers can be worked out before anything is incorporated.
Ask Louis directly
Tell me your price range, how long you plan to hold and the likely rent, and I'll lay the individual and company routes side by side – cash needed in, tax on the way out.
Send me your price range and holding plan and I'll put together a free side-by-side: deposit, stamp duty and annual holding costs for personal versus company ownership, plus the RPGT difference on exit – with the tax computation left to your tax agent to finalise.
Margin of finance for a company is capped at 60%
Bank Negara Malaysia’s own record of its macroprudential measures lists a maximum loan-to-value ratio of 60% for housing loans by non-individuals, implemented in December 2011, to “mitigate excessive investment and speculative activity which was resulting in significant house price increases in certain locations”.
The background matters. BNM capped an individual’s third and subsequent housing loan at 70% LTV on 3 November 2010, then saw more housing loans being taken in non-individual names, and closed that gap the following year. The individual rule is covered in the 70% margin on second and third home loans.
| Individual | Sdn Bhd | |
|---|---|---|
| Maximum loan | RM810,000 (90%) | RM540,000 (60%) |
| Cash down payment | RM90,000 | RM360,000 |
| Difference | – | RM270,000 more cash |
Thirty percentage points. For most people buying one home to live in, the conversation can honestly end here, because the cash is not there. And a newly incorporated Sdn Bhd with no trading record will usually be asked for a personal guarantee from the shareholders, so the “limited liability” benefit does not survive first contact with the bank.
Before you compare, work out what you can borrow personally: see how much money you need to buy a house in Malaysia, or run a figure through the buying costs calculator.
SME corporate tax rates for YA2026 and the 20% foreign-shareholding bar
“Company tax is lower than personal tax” is the line that sells most of these structures. It comes with conditions, and a lot of buyers fail one of them.
| Company | Chargeable income | Rate |
|---|---|---|
| Qualifying SME | First RM150,000 | 15% |
| Qualifying SME | Next RM450,000 (RM150,001-600,000) | 17% |
| Qualifying SME | Above RM600,000 | 24% |
| Ordinary resident company / non-resident company | All | 24% |
Every one of these conditions must be met for the 15%/17% rates
- Paid-up ordinary share capital of RM2.5 million or less;
- Gross business income of not more than RM50 million;
- The company does not control, and is not controlled by, a company with paid-up capital above RM2.5 million;
- Foreign ownership plus non-Malaysian-citizen shareholding, combined, is no more than 20%.
That last condition ends the argument for a lot of structures. An Sdn Bhd that is more than 20% foreign-owned pays a flat 24% and gets no 15% or 17% band at all. The “set up a local company to save tax” plan fails at the first hurdle for most foreign buyers.
In numbers: on chargeable income of RM150,000, a qualifying SME pays RM22,500 and a disqualified company pays RM36,000 — RM13,500 more. On RM600,000 it is RM99,000 against RM144,000, a gap of RM45,000.
What can a company deduct, and what happens to losses?
This turns on LHDN Public Ruling No. 12/2018, Income from Letting of Real Property (19 December 2018). The decisive question is not whether you are a company or an individual — it is which source the rental income falls under.
| s.4(a) business source | s.4(d) non-business source | |
|---|---|---|
| When it applies | Maintenance and support services are provided comprehensively and actively (structural elements, fixtures, exterior areas; security alone is not enough), by the owner or a firm it hires | The default where those services are not provided |
| Capital allowances | Yes, on plant and machinery | No — but the cost of replacing furnishings (furniture, air-conditioners) is claimable |
| Losses | Can be set against aggregate income and carried forward | Cannot be set against aggregate income and cannot be carried forward |
The ruling also confirms that a company letting to a related party can still be on the business source, provided the services are comprehensive and active and the rent is at arm’s length.
Deductible either way (para 8.2)
- Assessment tax (cukai taksiran) and quit rent (cukai tanah)
- Interest on the loan taken to buy the property
- Fire insurance premiums
- Ordinary repairs that maintain the existing condition
Not deductible (para 8.3)
- Initial expenses of obtaining the first tenant — advertising, the legal cost of the first tenancy agreement
- Pre-letting expenses are apportioned (para 8.5)
Want to see what you can actually buy?
The rules are above; these are the actual homes. Each page lists the projects I am tracking, with published price ranges and the date each figure was checked. Tell me the area on WhatsApp and I will send the current list.
Stamp duty when a company buys
Ad valorem duty on the Memorandum of Transfer (MOT, Form 14A) runs on the higher of price or market value: 1% on the first RM100,000, 2% on RM100,001-500,000, 3% on RM500,001-1,000,000 and 4% above RM1 million. A company pays the same scale — but gets no first-home exemption.
A company cannot claim the first-home stamp duty exemption
The two exemption orders (P.U.(A) 53/2021 for the transfer and P.U.(A) 54/2021 for the loan agreement, as amended by P.U.(A) 448/2025 and 449/2025 extending the window to 31 December 2027) define the beneficiary as “a purchaser or co-purchaser of a residential property who is a Malaysian citizen“, supported by a statutory declaration. A body corporate sits outside that definition. The same logic shuts a company out of the love-and-affection relief on family transfers, which also requires a Malaysian-citizen recipient. Full conditions are in first-time homebuyer incentives 2026.
Does the 8% foreign-buyer rate catch a foreign-owned Malaysian company? Here is the honest position
From 1 January 2026, transfers of residential property to “foreign companies and non-citizens (excluding permanent residents of Malaysia)” carry a flat 8% — new Item 32(ab), First Schedule, Stamp Act 1949, inserted by the Finance Act 2025. The open question is whether a Malaysian-incorporated Sdn Bhd with foreign shareholders counts as a “foreign company” for that item.
- What is settled: under the National Land Code, a “foreign company” means a company incorporated outside Malaysia or a company incorporated under the Companies Act 2016 with 50% or more of its voting shares held by a non-citizen or a foreign company. That is the definition recorded in the Malaysian Bar’s December 2024 conveyancing circular, and it is what the land office applies for state consent.
- What is not settled: whether the Stamp Act adopts the same shareholding test. As at 23 September 2026 the LHDN consolidated Stamp Act PDF could not be opened, and neither the KPMG budget commentaries nor the CTIM material reproduce a statutory definition.
- What law firms advise: conveyancing practitioners state plainly that merely incorporating a company in Malaysia does not necessarily qualify the acquisition for the lower rate that applies to Malaysian purchasers.
So read it this way: a Malaysian company that is 50% or more foreign-owned is a foreign company for land-office consent purposes, and law firms advise that the 8% is charged on the same basis. Have your conveyancer obtain the adjudication or a written confirmation before you sign. I cannot point you to the statutory wording, and I am not going to pretend otherwise. The size of the question: on a RM900,000 home the citizen scale is RM21,000 and 8% is RM72,000 — a RM51,000 difference. Foreign-buyer costs in full are in the true cost for a foreign buyer.
Moving a property you already own into your own company
On the RPGT side this can be a no gain, no loss transfer: under subparagraph 3(1)(b)(ii), Schedule 2, the disposal price is deemed equal to the acquisition price where an asset is transferred to a company controlled by the transferor, the transferor’s spouse or a connected person, and the consideration is shares in that company (or at least 75% shares plus cash). With effect from 1 January 2018 the owner must be a Malaysian citizen.
On the stamp duty side, no relief covering that case was found. Sections 15 and 15A of the Stamp Act relieve company reconstructions and amalgamations, and transfers between associated companies (broadly a 90% test) — not an individual moving property into a company they own. Budget for full ad valorem duty on market value and get it adjudicated before you commit.
What an Sdn Bhd costs to run every year
- Company secretary: every Sdn Bhd must have a licensed company secretary at all times — s.235, Companies Act 2016.
- Annual return: lodged with SSM within 30 days of the anniversary of incorporation (s.68, Companies Act 2016). It is your company’s own date, not a national deadline.
- Financial statements: circulated to members within 6 months of the financial year end, and lodged with SSM within 30 days of being sent to members.
- Tax: CP204 estimate and Form C, normally handled by a tax agent.
- Penalties: s.591, Companies Act 2016 — fines of up to RM50,000 on the company and on responsible officers.
Audit: many small property companies are exempt
SSM Practice Directive No. 10/2024, issued 16 December 2024, exempts a private company from audit if it is dormant, or if it meets at least two of three criteria in the current year and in each of the two preceding years. The thresholds rise in phases:
| Phase | Financial period commencing | Lodgement from | Revenue up to | Total assets up to | Employees up to |
|---|---|---|---|---|---|
| 1 | 1 Jan 2025 – 31 Dec 2025 | 1 Jan 2026 | RM1,000,000 | RM1,000,000 | 10 |
| 2 | 1 Jan 2026 – 31 Dec 2026 | 1 Jan 2027 | RM2,000,000 | RM2,000,000 | 20 |
| 3 | 1 Jan 2027 onwards | 1 Jan 2028 | RM3,000,000 | RM3,000,000 | 30 |
A small SPV holding one or two units with no staff will usually fall inside the exemption, so “you will have to pay for an audit” is often wrong in 2026. Accounts, the annual return, the company secretary and tax filings remain compulsory either way, and the test is two of three criteria across three consecutive years, not a single good year.
What it actually costs
A 2026 corporate-services guide quotes: company secretary RM1,200-3,000 a year; bookkeeping RM1,200-6,000; tax agent RM800-2,500; audit where required RM1,200-5,000 — RM5,400-16,500 in total. That is a vendor’s own price list, not an official figure. Treat it as an order of magnitude: a few thousand ringgit a year, with RM5,000-15,000 the range commonly quoted. Get two or three real quotes before you commit.
When buying under a company is worth it, and when it is not
If the real question is whether to buy jointly with family instead, that is a different route – see joint property purchase and joint home loans. For moving property to family later, see transferring property to family.
Put every verified fact above side by side and the answer is less ambiguous than the marketing suggests.
When it is not worth it (most cases)
- Buying a home to live in. 60% financing, no first-home exemption, and 10% RPGT from year six where an individual pays nothing. Not one line favours the company.
- One or two investment units you intend to hold long term. A citizen pays zero RPGT after five years; the company pays 10%.
- Any structure more than 20% foreign-owned. No 15%/17% SME rates, a flat 24%, and at 50% or more foreign voting shares the land office treats it as a foreign company, with state consent required and the 8% stamp duty question live.
- Property already bought in your own name. Moving it in means full ad valorem stamp duty on market value; no relief was found for that case.
- Planning to “sell the shares” instead. The RPC rules close that, and since 2024 a company selling RPC shares pays CGT.
When it may be worth it
- Several properties with profits reinvested. Income stays in the company and is taxed at 15%/17% on the first RM600,000 (for an essentially Malaysian-owned SME) instead of at your personal marginal rate.
- Letting that genuinely is a s.4(a) business — comprehensive, active maintenance and support services — so losses carry forward and capital allowances are available.
- Liability isolation and administration across multiple units or partners: shareholdings are easier to adjust than undivided shares on a title. Remember the bank will still want personal guarantees.
A July 2026 law-firm commentary reaches the same conclusion from the other direction: company ownership suits liability isolation, profit retention and multiple properties, where personal marginal rates exceed the corporate rate and profits are reinvested rather than drawn.
- Ask two banks, in writing: actual margin for a company, whether personal guarantees are required, and how much higher the rate is
- Have a tax agent run both routes on your real rent and holding period: income tax plus RPGT or CGT on exit
- Check the shareholder register: is foreign plus non-citizen holding above 20% (tax rate), and does it reach 50% (land office and stamp duty)
- Get quotes for secretary, bookkeeping and tax work, and check whether your company falls inside the SSM audit exemption
- If you are moving an existing property in, get the stamp duty adjudicated first and decide on the written figure
Related questions
Company or personal name – which is cheaper for one house?
Personal, in almost every line. An individual can be financed to 90% where a company is capped at 60%, can claim the first-home stamp duty exemption on a first home up to RM500,000, and pays 0% RPGT from the sixth year where a company pays 10%. A company also carries secretarial, accounting and tax costs every year. The company case is about several properties with profits reinvested, not about one home.
Can a foreigner use a Malaysian company to get around the foreign-buyer rules?
Not as a workaround. Under the National Land Code a Malaysian company with 50% or more of its voting shares held by non-citizens or a foreign company is a foreign company, so state consent is still required. Foreign plus non-citizen shareholding above 20% also loses the 15%/17% SME tax rates, leaving a flat 24%, and law firms warn that incorporating locally does not by itself buy the lower stamp duty rate. See the true cost for a foreign buyer.
Can you live in a house owned by your own company?
The company is the registered owner, so occupation is a matter for the company’s own arrangements, but the tax side is unkind. If a shareholder occupies rent free there is no rental income to absorb the interest and outgoings, and a s.4(d) non-business loss can be neither set against aggregate income nor carried forward. Add the 60% financing cap, no first-home exemption and 10% RPGT from year six, and a company-owned home loses on every line. Get the arrangement confirmed in writing by a tax agent.
Is there stamp duty when I transfer my own property into my own Sdn Bhd?
Budget for full duty. RPGT can be no gain, no loss under subparagraph 3(1)(b)(ii), Schedule 2, where the consideration is shares in that company and (from 1 January 2018) the owner is a Malaysian citizen. But no stamp duty relief covering that case was found: sections 15 and 15A relieve company reconstructions and transfers between associated companies. On a RM1,000,000 house the transfer duty alone is RM24,000. Get it adjudicated before you decide.
Frequently asked questions
Is it worth buying property under a company in Malaysia?
Usually not. For a home to live in, or one or two investment units held long term, a company loses on almost every line: financing capped at 60%, no first-home stamp duty exemption, 10% RPGT from year six where a citizen pays 0%, plus annual secretarial, accounting and tax costs. It can make sense for several properties where profits are reinvested and the shareholders are essentially Malaysian. Have a licensed tax agent price your own case.
What RPGT does a company pay in Malaysia?
Under Schedule 5 Part II of the RPGT Act 1976, a Malaysian-incorporated company pays 30% on disposals within three years, 20% in year four, 15% in year five and 10% from year six onwards. The 10% has applied with effect from 1 January 2019. A company cannot claim the RM10,000-or-10% exemption or the private residence exemption, so the whole gain is taxable.
How much can a company borrow to buy a house in Malaysia?
Bank Negara’s macroprudential measures have capped housing loans to non-individual borrowers at a maximum 60% loan-to-value since December 2011. So where an individual might be offered 90% on the same property, a company is capped at 60%. That is a ceiling, not an entitlement: a new company with no trading record will normally be asked for personal guarantees from its shareholders.
Can a Sdn Bhd claim the first-home stamp duty exemption?
No. The exemption orders (P.U.(A) 53/2021 and 54/2021, amended by P.U.(A) 448/2025 and 449/2025 to run to 31 December 2027) define the beneficiary as a purchaser or co-purchaser who is a Malaysian citizen, supported by a statutory declaration. A body corporate falls outside that. The company pays the ordinary 1%/2%/3%/4% scale on the transfer.
Does the 8% foreign-buyer stamp duty apply to a Malaysian company with foreign shareholders?
As at September 2026 there is no verified answer from the statute. What is confirmed is that under the National Land Code a Malaysian company with 50% or more of its voting shares held by non-citizens or a foreign company is a foreign company, and the land office applies that for state consent. Law firms advise the 8% is charged on the same basis, but the Stamp Act’s own definition could not be confirmed. Have your conveyancer get the adjudication in writing before signing.
Can you avoid RPGT by selling the shares in the company instead of the property?
No. Shares in a real property company are deemed chargeable assets, and keep that character even after the company stops being an RPC. Since 1 January 2024 a company, LLP, trust body or co-operative disposing of RPC shares pays capital gains tax instead: 10% of the net gain, or 2% of the gross price for shares acquired before 2024, filed and paid within 60 days. Individuals stay under RPGT.
How much does it cost to keep a property-holding Sdn Bhd each year?
You must have a licensed company secretary (s.235, Companies Act 2016), lodge the annual return within 30 days of your incorporation anniversary (s.68), circulate financial statements within six months of year end and lodge them within 30 days, and file tax. An audit is often not required: SSM Practice Directive 10/2024 exempts small companies meeting two of three thresholds over three years. Vendors commonly quote RM5,000-15,000 a year in total, but that is their own price list, not an official figure.
Sources & verification
- LHDN – Real Property Gains Tax (RPGT) Rates (Schedule 5 Part II)
- LHDN – RPGT Exemption (individual-only exemptions)
- LHDN – Shares in Real Property Company (RPC)
- EY Malaysia – Malaysia's new capital gains tax regime (24 January 2024)
- Bank Negara Malaysia – macroprudential measures (60% LTV for non-individuals, December 2011)
- Bank Negara Malaysia – press release, 3 November 2010 (70% on third housing loan)
- PwC Worldwide Tax Summaries – Malaysia, Taxes on corporate income (YA2026)
- LHDN Public Ruling No. 12/2018 – Income from Letting of Real Property
- SSM – Practice Directive No. 10/2024 (audit exemption thresholds)
- Malaysian Bar – Conveyancing Circular No. 444/2024 (foreign company definition, state consent)
- KPMG Malaysia – Budget 2026: Stamp Duty
- LHDN – Disposal Price Deemed To Be Equal To Acquisition Price
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.
More in this stage
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.
Send me your price range and holding plan and I'll put together a free side-by-side: deposit, stamp duty and annual holding costs for personal versus company ownership, plus the RPGT difference on exit – with the tax computation left to your tax agent to finalise.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT