Renting Out Your Property in Malaysia: Rent, Tenants, Tenancy Agreement and Handover

How do you set the rent when Malaysia publishes no rental index?

Start with the fact that shapes everything else: Malaysia has no official residential rental index. The only rental indices NAPIC publishes are the Shopping Center Rental Index Report and the Purpose-Built Office Rental Index Report – both commercial. Its residential series (the Malaysian House Price Index, the Serviced Apartment Price Index, the Property Market Report) are price and transaction series, not rental series. Neither PropertyGuru nor iProperty publishes a Malaysian rental index either; their market reports track sale prices.

So when someone tells you “the official data says rents here are X”, ask for the publication. Here are the three references I actually use, each with its limits stated.

The method I use

1. Pull at least ten listings for the same block, same layout and size, noting floor, condition, furnishing level and car parks.
2. Separate fully furnished from bare unit completely. They are two different markets and averaging them produces a number that fits neither.
3. Ask the management office or an agent active in the block what has actually been signed in the last three months. There is usually a gap between asking and signed.
4. Sanity-check against GlobalPropertyGuide’s area gross yield: multiply your purchase price by the area’s gross yield and divide by twelve. If the result is far from your intended rent, one of the two assumptions is wrong.
5. Then decide your vacancy tolerance. Holding out for another RM100 and losing two months rarely pays. The maths is in rental yield.

Tenant screening in Malaysia: what the PDPA 2010 lets you collect and keep

Screening is where landlords most often step over a line without noticing. The Personal Data Protection Act 2010 (Act 709) governs personal data processed “in respect of commercial transactions”. Its seven principles include the General principle (consent), Notice and Choice (s.7 – written notice of what you collect, why, and to whom it may be disclosed), Disclosure, Security, Retention (s.10 – data must not be kept longer than necessary and obsolete data must be destroyed), Data Integrity, and Access. The penalty for breaching a principle was a fine up to RM300,000 or 2 years’ imprisonment; the Personal Data Protection (Amendment) Act 2024 raised it to RM1,000,000 and 3 years, commencing in stages on 1 January, 1 April and 1 June 2025, the last of which brought in mandatory data protection officers and mandatory breach notification.

What to collect

• Sight of the IC or passport for identity verification (for a foreign tenant, also check that the pass or visa covers the tenancy term);
• An employment letter or recent payslips, or for the self-employed the company registration and bank statements – for one purpose only: can they pay;
• The current or previous landlord’s contact, called only after the applicant agrees;
• A short written notice stating what you collect, why, how long you keep it and who you may disclose it to (the management office for tenant registration, your agent);
• Number of occupants, intended use, pets, and whether subletting or short-term letting is contemplated – all of which then go into the agreement.

What not to do

• Do not offer to “run a CTOS or CCRIS check” on a tenant. CCRIS is Bank Negara’s system and is not open to landlords. CTOS does sell a tenant-screening product launched in 2021, but it is consent-based, and tenancy is not among the permitted purposes CTOS itself lists. If you want a report, the tenant authorises it and produces it.
• Do not collect more than you need to judge identity and affordability. Bank balances, family details and social-media access are not yours to ask for.
• Do not keep or pass on an unsuccessful applicant’s documents. Under the retention principle, copies you did not need should be destroyed.
• Do not put a screening criterion in writing that you would not want quoted back to you. The legal position, stated accurately: Malaysia has no law prohibiting racial discrimination in the private rental market, and Article 8(2) of the Federal Constitution has been held to bind the State rather than private parties. That is a fact, not a recommendation; discrimination is one of the gaps the unpassed Residential Tenancy Act is meant to close.

How many months' deposit, and how much is tenancy stamp duty in 2026?

The deposit: 1 + 2 + 0.5 is convention, not law

The standard Malaysian package is 1 month advance rent + 2 months security deposit + 0.5 month utility deposit – about 3.5 months’ rent on the table before move-in, plus whatever the management charges for access cards and keys. Separately, an earnest deposit of one month typically holds the unit for around seven days and is then rolled into the first month’s rent or the security deposit.

On rent of RM2,500: advance rent RM2,500 + security RM5,000 + utility RM1,250 = RM8,750, plus card charges. That is a real barrier for a tenant, and it is also the only cushion you will ever have – so take it, and document it.

Tenancy stamp duty: the rates in force since 1 January 2025

The Finance Act 2024 [Act 862] amended Item 49 of the First Schedule to the Stamp Act 1949: from 1 January 2025 the RM2,400 annual-rent exemption is removed, and duty is charged per RM250 of annual rent (any part of RM250 counts as a full unit) at a rate that depends on the term. LHDN’s own First Schedule guideline (LHDN.AG.600-1/10/3, dated 30 June 2026) confirms the figures. What changed on 1 January 2026 is the procedure, not the rates – tenancies moved to self-assessment on that date.

Worked through. At RM2,500 a month, annual rent is RM30,000, which is 120 units of RM250:

• One-year term: 120 x RM1 = RM120
• Two-year term: 120 x RM3 = RM360
• At RM1,800 a month on a one-year term: RM21,600 / 250 = 86.4, rounded up to 87 units x RM1 = RM87

One more thing worth knowing: an unstamped tenancy is still valid. In Malayan Banking Bhd v Agencies Service Bureau Sdn Bhd the Federal Court held that failure to stamp “only affects the admissibility of the instrument in evidence, but it does not render that particular instrument to be invalid”. The practical consequence for a landlord is blunt: you cannot sue on an unstamped tenancy without stamping it first and paying whatever penalty then applies. The tax side of letting is in rental income tax and the tenancy agreement.

When the rent stops: what a landlord must not do, and the two lawful routes

This is the most important section on the page. Section 7(2) of the Specific Relief Act 1950 provides:

“Where a specific immovable property has been let under a tenancy, and that tenancy is determined or has come to an end, but the occupier continues to remain in occupation of the Property or part thereof, the person entitled to the possession of the Property shall not enforce his right to recover it against the occupier otherwise than by proceedings in the Court.”

In plain terms: once the tenancy has ended and the tenant stays, the only way to get the property back is through the court. That provision extinguishes a landlord’s right of self-help. Changing the locks, cutting water or electricity, and removing the tenant’s belongings are all forbidden, and a landlord who does it risks being sued under section 8 of the same Act.

The lawful sequence

1. Written reminderSend a written demand in the manner the tenancy specifies, stating the periods outstanding, the amount and a deadline. Keep proof of despatch and receipt.
2. Notice to quitTerminate the tenancy in accordance with its terms and demand the arrears. This is usually issued by a solicitor and becomes a key document in any later proceedings.
3. Choose your objective: the money, or the propertyArrears can be pursued through a warrant of distress under the Distress Act 1951. Getting the property back requires a civil suit for vacant possession and arrears. They can run in parallel, but a warrant of distress by itself will not make the tenant leave.
4. Judgment and writ of possessionOnce the court has ordered possession, eviction is executed by the court bailiff, with police in attendance. The landlord does not carry it out.
5. Double rental for holding overUnder section 28(4)(a) of the Civil Law Act 1956, a tenant who remains in occupation after the notice expires is liable for double rental.

What a warrant of distress actually does

• Under section 5(1) of the Distress Act 1951, a landlord may apply for a warrant to seize and sell the tenant’s movable property on the premises to satisfy arrears.
• The limit: only up to 12 months of arrears, being the 12 months immediately preceding the date of application. The longer you let it run, the more you simply cannot recover – the most practical argument there is against waiting.
• Court: the Magistrates Court where arrears are below RM100,000, the Sessions Court above that.
• Exempt from seizure: items actually in use at the time of seizure; the tenant’s and family’s necessary clothing and bedding; goods the tenant holds for ordinary business purposes; and an inn guest’s belongings.
• Process: seizure, inventory and valuation, then written notice giving the tenant 5 days to pay before any sale. Proceeds cover bailiff fees, the arrears and costs, with the surplus returned to the tenant.
• Distress is for arrears, not for possession. If you want the tenant out, you still need the step above.

Where the dispute goes – and why there is no tenancy tribunal

From the Judiciary’s own page on subordinate court jurisdiction: the Sessions Court hears civil cases including “disputes between the landlord and tenant” valued above RM100,000 but not exceeding RM1,000,000, and has “unlimited jurisdiction to try all actions and suits of a civil nature in respect of motor vehicle accidents, landlord and tenant and distress”. The Magistrates Court handles disputes of less than RM100,000.

And the point that ties this page together: to run any of this, your tenancy has to be stamped. An unstamped agreement is generally inadmissible in evidence, so it has to be stamped first, with whatever penalty then applies, at exactly the moment you are already out of pocket. The tax and filing side of letting is in rental income tax and the tenancy agreement, and the flat 30% that applies to non-resident owners, including most Singaporean landlords, is in rental income tax for non-residents.