Buying Guide · Stage 5: After you get the keys

Renovation in Malaysia: Budgeting, Financing and the Approvals You Need

A renovation loan in Malaysia is not a legal product category. What banks market under that name is really four structurally different arrangements: paying cash, bolting a renovation facility onto an existing home loan, unsecured personal financing, and building renovation into the home loan at purchase or refinancing to release equity. They differ in security, tenure, how interest is charged and when the money actually reaches you. This guide compares all four, states what the government-backed HCGS-MADANI scheme really covers, explains when a bank releases renovation money, sets out the strata and local-authority approvals, and separates the tax treatment during letting from the one that applies when you sell. Figures verified to 24 September 2026.

4 funding routes comparedPersonal financing capped at 10 yearsHCGS-MADANI 20% is a shared envelopeNot deductible against rentDeductible at RPGT, with receiptsVerified 2026-09-20

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Part ofBuying new property Buying subsale property Stage 5 · After you get the keys

By Louis Koh · 11 years in Malaysian propertyVerified: 2026-09-2018 min read📞 +60 10-906 6685

Short answer

Malaysia has no statutory renovation loan. Renovation money comes from four routes: cash, a renovation facility on an existing home loan, unsecured personal financing (tenure capped at 10 years, usually flat-rate), or building it into the home loan or refinancing. SJKP’s HCGS-MADANI guarantees up to 120% of the price, but the extra 20% is shared by MRTA, legal and valuation fees, renovation and furnishing, inside a RM360,000 limit. Renovation is not deductible against rent; it reduces the RPGT gain on sale.

Key numbers at a glance

Personal financing tenure cap	10 years (BNM personal financing policy document, 30 Sep 2025)
HCGS-MADANI financing limit	RM360,000; guarantee up to 120% of the purchase price
What that 20% covers	MRTA/MRTT, LTHOT, solicitor's and valuation fees, renovation, furnishing (shared)
Plain HCGS	RM500,000 limit; renovation and furnishing <b>not</b> listed
When renovation money is released	Maybank Home+Reno: over 12 months after full home-loan disbursement (that bank's terms)
Strata approval	Management's prior written approval (By-law 27, Third Schedule, 2015 Regulations)
Structural work	Local-authority approval; submitted by architect/engineer/draughtsman (SDBA 1974 s.70)
Tax treatment	Not deductible against rent (PR 12/2018); permitted expense at RPGT (Sch 2 para 5(1)(a))

Key points in 30 seconds

There is no statutory product called a renovation loan in Malaysia. The four routes differ in security, tenure, interest method and when the money is released, so find out which one you are actually being offered.
Personal financing is capped at 10 years (BNM policy document on personal financing, 30 Sep 2025) and is usually priced on a flat basis, so its real cost is higher than the headline rate suggests.
SJKP’s HCGS-MADANI guarantees up to 120% of the purchase price, but the extra 20% is a single envelope shared by MRTA/MRTT, LTHOT, solicitor’s fee, valuation fee, renovation and furnishing, inside a RM360,000 financing limit. Plain HCGS (RM500,000) does not list renovation at all.
When the bank releases renovation money is contractual. Maybank’s Home+Reno page states that the renovation portion is disbursed progressively over 12 months only on full disbursement of the home financing portion – that bank’s terms, not a market rule.
Strata work needs the management’s prior written approval and may need a deposit; structural work needs local-authority approval, submitted by a Professional Architect, Professional Engineer or registered building draughtsman under section 70 of the Street, Drainage and Building Act 1974.
Renovation is not a deductible repair against rental income under LHDN Public Ruling 12/2018, which allows only ordinary repair to maintain the property in its existing state. It is a permitted expense against the RPGT gain when you sell, if it is still reflected in the property and you kept the receipts.
No Malaysian authority publishes a residential renovation cost benchmark. Every per-square-foot figure in circulation is contractor or portal marketing, so budget from your own itemised quotations.

How do you pay for a renovation in Malaysia? Four routes compared

Start with a fact most guides skip: Malaysia has no statutory product called a renovation loan. Nothing in the Financial Services Act 2013 or in any Bank Negara Malaysia (BNM) policy document defines it as a product class. What the banks sell under that name is four different arrangements, and they differ in four ways: whether there is security, the tenure cap, how interest is charged, and whether the property must already be yours.

Four ways to fund a renovation, September 2026
Route	Tenure	Interest method	The binding constraint
Cash	n/a	n/a	No interest cost, but it eats the emergency buffer just as you take on a mortgage and a fit-out
Personal financing	Capped at 10 years (BNM policy document on personal financing, 30 Sep 2025)	Usually flat rate – interest on the original principal for the whole tenure	Unsecured and fast, but short tenure means high instalments and a materially higher real cost than a housing loan
A renovation facility on an existing home loan	Product-specific. Maybank MyDeco states up to 10 years / age 70, whichever is earlier	Priced like the bank’s housing products	You must already hold the home loan with that bank, and the property must already be yours
Renovation inside the home loan at purchase	Product-specific. Maybank Home+Reno states up to 35 years / age 70	Same pricing as the housing loan	That product is limited to landed property bought in the sub-sale market, and the renovation tranche follows the housing tranche
Refinancing / cash-out	A new housing-loan tenure	Repriced under the current reference-rate framework	It is a brand-new housing loan: 0.5% loan-agreement stamp duty, SRO 2023 legal fees, a fresh valuation – and your existing loan’s lock-in penalty may bite first

Why personal financing usually costs more than it looks

Two reasons. First, the tenure is capped at 10 years under BNM’s personal financing policy document, so the same sum carries a much higher monthly instalment than it would spread over a 20- or 30-year housing loan, and that instalment sits in your debt-service ratio. Second, personal financing is usually quoted on a flat rate: interest is calculated on the original principal for the full tenure, so it does not fall as you repay. A housing loan is on a reducing balance. The two percentages are not comparable – ask each bank for the monthly instalment and the total repayment over the full tenure, and compare those.

Refinancing to release equity: price in the switching costs

Refinancing to cash out equity looks cheapest, because it carries housing-loan pricing and housing-loan tenure. But it is a new housing loan and carries the whole apparatus: 0.5% stamp duty on the loan agreement (see stamp duty and legal fees), solicitors’ fees on the loan documents under the Solicitors’ Remuneration Order 2023, and a fresh valuation. Your existing loan may still be inside its lock-in period, so settling it early triggers the exit penalty (see flexi vs term loan and lock-in and refinancing and loan settlement). And if this is your third or later outstanding housing facility, BNM’s 70% loan-to-value limit applies to the refinanced loan (see the 70% margin rule).

One for non-residents: under BNM’s Foreign Exchange Policy, refinancing by a Non-Resident is limited to the outstanding balance. A non-resident owner cannot cash out equity to fund a renovation. Confirm it with the bank in writing before you plan around it.

Does any government scheme finance renovation? HCGS-MADANI and its shared 20%

SJKP’s HCGS-MADANI is the one government-linked scheme whose own published terms name renovation and furnishing. It is also the most misreported, so here it is exactly as SJKP states it.

HCGS vs HCGS-MADANI (SJKP's own pages, read 24 September 2026)
Item	HCGS	HCGS-MADANI
Financing limit	RM500,000	RM360,000
What it covers	Principal, MRTT/MRTA, LTHO, solicitor’s fee, valuation fee	Principal, MRTA/MRTT, LTHOT, solicitor’s fee, valuation fee, renovation costs and the purchase of home furnishing and fittings
Guarantee coverage	–	Up to 120% of the house purchase price: 100% for the property plus 20% of the price for the items above, shared
Tenure	–	Up to 35 years, or the loan tenure, whichever is earlier; two-generation financing allowed
Facility type	–	Fixed term loan / term financing only

The point that gets misreported: the 20% is not a renovation allowance. It is a single envelope that MRTA/MRTT, LTHOT, the solicitor’s fee, the valuation fee, renovation and furnishing all have to fit inside. On a RM300,000 house, 120% is RM360,000 and the envelope is RM60,000 – shared. What is left for renovation depends on your actual insurance premium and legal bill.

Two caps that fight each other

The guarantee runs to 120% of the price, but the financing limit is RM360,000, and both must hold. At a RM300,000 price, 120% is exactly RM360,000, so the envelope is a full RM60,000. At RM350,000, 120% would be RM420,000 but the RM360,000 limit bites first, leaving RM10,000 for everything above the price – not enough for a renovation once insurance and legal fees are in. The closer the price is to RM360,000, the thinner the envelope.

Plain HCGS does not list renovation or furnishing at all. SJKP’s scheme-features page reads: “Up to RM500,000.00 (including principal financing amount, MRTT/MRTA, LTHO, solicitor’s fee and valuation fee)”. If you are applying under the RM500,000 scheme, do not plan on financing the fit-out with it.

Who qualifies

Malaysian citizens aged 18 and above; joint financing is allowed.
Both fixed and non-fixed income earners and the self-employed – the scheme is aimed at gig workers, micro-entrepreneurs and people without payslips.
Purchase of a first new house, sub-sale house or auction house, to be owner-occupied; residential only.
Total repayments on all the applicant’s loans must not exceed 65% of gross monthly income. That is SJKP’s scheme condition, not a BNM figure – BNM prescribes no debt-service ratio.
CCRIS arrears of not more than 2 months within 12 months, and no other adverse credit record in the last 24 months.

Where the published record stops: SJKP’s eligibility page sets out the HCGS criteria and does not separately tabulate the MADANI variant, and the dedicated MADANI eligibility URL returned a 404 when checked. So I will not state a MADANI income band or price ceiling – ask SJKP or the participating bank. Rates are “as determined by the participating Financial Institutions”; there is no published scheme rate. Compare the schemes in affordable housing schemes and first-time buyer incentives.

The two mistakes that cost the most

First, starting before approval. In a strata building, work without prior written approval can be fined and ordered reinstated. For structural work without a section 70 permission, s.70(13) carries a fine up to RM50,000, up to 3 years’ imprisonment and a further RM1,000 for each day after conviction. Second, paying cash with no receipts. Renovation is not deductible against rent, so your only recovery is as a permitted expense against the RPGT gain – and expenditure you cannot evidence is expenditure you cannot deduct.

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Send me your letter of offer and the renovation quotations and I'll show you where the disbursement clause puts your money, and what the management in that building will ask for.

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Tell me the project and unit and I'll get the management's written renovation rules for you – approval process, deposit, working hours – and list the approvals your specific job needs, free.

When does a bank actually release renovation money?

This is where most renovation plans slip. People assume that once the letter of offer is signed, the contractor can be booked. In practice the release of the renovation tranche is a contractual event, and it usually sits after the housing loan.

Take Maybank’s Home+Reno product page, read on 24 September 2026, as the bank’s own published terms: “on full disbursement of the Home Financing portion, the Renovation Financing portion will be disbursed progressively over the next 12 months.” The same bank’s MyDeco facility, which attaches to an existing home loan, states that up to 30% is released upfront against quotations and the remaining 70% is paid direct to contractors and suppliers against work completed.

Those are one bank’s terms, not a market rule, and not a BNM requirement. I quote them because it is one of the few banks that publishes the sequence in black and white. What governs your money is your own letter of offer – ask before you sign, not after the contractor has quoted a start date.

Why the sequence works that way

Because the bank’s security is not fully in place until the housing loan is fully drawn. Look at the timeline:

A new (HDA) purchase: the final 17.5% falls due only at vacant possession, and for strata only with the strata title issued; a further 5% is held by the developer’s solicitor as stakeholder for 8 and 24 months after vacant possession. See the progressive payment schedule and CCC and vacant possession.
A sub-sale purchase: completion runs 3 months plus a 1-month extension, and the bank’s charge is only registered after the transfer. See sub-sale completion and caveats and perfection of transfer and charge.

So the practical rule to plan around is: a bank will not fund renovation on a property you do not yet hold vacant possession of. It is credit policy rather than regulation, but it is close to universal, and no amount of arguing changes a bank’s disbursement clause.

What a published renovation facility actually looks like

Maybank's two renovation-related products, as published on 24 September 2026 (this bank's terms only)
Item	MyDeco (on an existing home loan)	Home+Reno (at purchase)
Amount	Up to 30% additional margin, or a combined total of 120% of price / open market value, or a maximum of RM250,000 – whichever is lower	Combined up to 120% of price / open market value; renovation portion capped at RM500,000
Housing portion	The existing home loan	“Up to 90% + 5%” of price / open market value
Tenure	Up to 10 years / age 70, whichever is earlier	Up to 35 years / age 70, whichever is earlier
Property	Minimum value RM300,000 in KL/Selangor/Johor Bahru/Penang island, RM150,000 elsewhere; must already be a home financing customer	Landed, sub-sale only (not bought from a developer); same minimum values
Disbursement	Up to 30% upfront against quotations; the remaining 70% paid direct to contractors against completed works	Renovation portion released progressively over 12 months after full disbursement of the housing portion

Louis’s note: the “90% + 5%” in that table is a product term, not an entitlement from BNM. BNM publishes only two margin caps: 70% on a third and subsequent housing loan, and 60% for non-individual buyers of residential property. How to compare banks is in choosing a home loan, and how your existing commitments are read is in DSR, CCRIS and CTOS.

What approvals does a renovation need? Management consent and council approval

Once the money is settled, the approvals decide when you can start. There are two independent layers: the strata management, and the local authority. Clearing one does not excuse the other.

Layer one: prior written approval from the JMB or MC

By-law 27 of the Third Schedule to the Strata Management (Maintenance and Management) Regulations 2015 provides that a proprietor shall not carry out any renovation works to his parcel without first obtaining prior written approval from the management corporation, and from the appropriate authorities where necessary. The by-laws apply whether the building is still run by the developer, by a Joint Management Body (JMB) or by a Management Corporation (MC) under the Strata Management Act 2013 (Act 757).

By-law 28 covers works that need approval from both the management and the relevant authority: additional levels, relocating external doors or windows, removing safety features, altering plumbing or sewerage, and whole-system electrical upgrades.
Anything affecting the facade, balconies or common property – including antennas and air-conditioner condensers – needs approval.
Hacking, drilling and nailing are prohibited within 300 mm of concealed pipes and electrical conduits.
The management may require a renovation deposit to protect common property and structural integrity.
By-law 7 lets the management impose a fine determined by general meeting for a breach, and the proprietor bears the cost of rectifying any damage.
Copies of the local-authority approvals must be given to the management. If that approval turns out to be missing or improperly obtained, the management’s own renovation approval is treated as rescinded on discovery.

I will not give you a renovation deposit figure. The by-law permits a deposit but sets no national amount and no refund timetable – those are each JMB’s or MC’s own house rules. Ask the management office for their written renovation rules and get the amount, the refund conditions and the timeline in writing. How the management is constituted is in the Strata Management Act, JMB and MC; the house rules themselves are in strata by-laws.

One honest caveat on the numbering: the by-law numbers 27 and 28 come from two independent Malaysian legal sources that agree on the substance, but the gazetted Third Schedule text itself could not be opened when this was checked. Before you spend money on the strength of a by-law number, ask your solicitor or the management office to show you the provision they are relying on.

Layer two: the local authority and the submitting person

The operative provision is section 70 of the Street, Drainage and Building Act 1974 (Act 133):

s.70(1): “No person shall erect any building without the prior written permission of the local authority.” “Erect any building” is defined widely enough in Act 133 to catch structural alteration, and s.70(11) deals expressly with unauthorised alteration.
s.70(2): a person intending to erect a building must have a qualified person – a Professional Architect, Professional Engineer or registered building draughtsman – submit plans and specifications to the local authority under the applicable by-laws, and to other statutory authorities under other written laws. That is the same category of person who self-certifies the CCC on Form F (see CCC and vacant possession).
Penalties: s.70(11), unauthorised alteration – a fine up to RM25,000, and the court may order the work altered or demolished. s.70(13), commencing erection without permission or deviating from approved plans – a fine up to RM50,000, imprisonment up to 3 years, and a further RM1,000 per day after conviction. s.70(14) – an unauthorised start attracts a sum of not less than five times and not more than twenty times the prescribed fees, as set by the State Authority.

What triggers a submission

The trigger under section 70 is erection or structural alteration – not cost. In practice that means moving or enlarging structural openings, altering load-bearing walls, columns or beams, adding floor area or a storey, changing the facade, raising a car-porch roof, and works that alter drainage or sewerage.

Do not trust any threshold you read online. No Malaysian council publishes a “minor works exempt” list or a ringgit threshold below which approval is unnecessary, and none was retrievable when this was checked. The only reliable step is to take your drawings to your own local authority – in Johor that is MBJB, MBIP, MBPG or MPKu. The process is set out in renovation permit rules.

One more caveat. The technical by-laws a council applies to that submission are the Uniform Building By-Laws 1984, but the UBBL document on KPKT’s site could not be opened when this was checked (a TLS certificate failure), so no UBBL by-law number is quoted here. The verified statutory basis is section 70 above.

Is renovation tax deductible in Malaysia? Not against rent – but it counts at RPGT

These two get conflated, and it costs people twice: landlords claim what they cannot claim, and sellers forget what they could have claimed.

While you are letting: renovation is not a repair

LHDN Public Ruling No. 12/2018, “Income From Letting Of Real Property”, issued 19 December 2018, allows at para 8.2(f) an “ordinary repair to maintain the real property in its existing state“. That phrase – maintain in its existing state – is what excludes renovation, improvement, extension and addition. Replacing a tap, patching a leak, repainting the same wall: repair. Knocking through a kitchen, a new set of cabinetry, adding a room: capital.

The same ruling adds a second trap at para 8.3: initial expenses are not deductible, because they are “incurred to create a source of rental income and not incurred in the production of rental income” – with advertising, the legal cost of the tenancy, stamp duty and the agent’s commission for the first tenant given as the examples. The repair-versus-improvement line itself is dealt with in LHDN Public Ruling No. 6/2019, “Tax Treatment On Expenditure For Repairs And Renewals Of Assets” (26 November 2019), which works off sections 33(1) and 39(1)(b) of the Income Tax Act 1967.

An honest limit: the PR 6/2019 PDF was blocked by hasil.gov.my’s robots.txt when this was checked, so only its number, title and date are verified here and no paragraph of it is quoted. Have your tax agent read it before you file. The full list of what is and is not deductible against rent is in rental income tax and the tenancy agreement.

When you sell: renovation reduces the RPGT gain

The money is not lost, it just comes back later. Under Schedule 2, paragraph 5(1)(a) of the Real Property Gains Tax Act, you may deduct “expenditure incurred on the asset for the purpose of enhancing or preserving the value of the asset, being expenditure reflected at the time of disposal“. LHDN’s own RPGT page gives “additional works on buildings that have been acquired” as the example. So renovation is not an income-tax deduction; it is a permitted expense against the RPGT gain.

Two conditions have to hold: (1) the work is still there when you sell – a kitchen you installed and later ripped out is not reflected at disposal; and (2) you can prove it.

Contractor quotations, invoices and official receipts carrying a company name, SSM registration number and date;
Bank transfer records that reconcile to those receipts – cash paid with no paper trail is, for RPGT purposes, money you cannot prove you spent;
The management’s renovation approval letter and any local-authority approval, tying the work to that property and showing it was lawful;
Dated before-and-after photographs;
If the work was done in phases across different years, a single schedule by year, filed with the SPA.

Louis’s note: keep renovation receipts until after you have sold and filed the RPGT return, not until the warranty expires. RPGT rates and the 60-day filing are in selling and RPGT. Loose furniture and appliances you can carry out of the door are generally not expenditure “reflected” in the asset, so keep them separate from the building works in your schedule.

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How to budget a renovation: scope, quotations, contingency, staged payments

First, a fact you will not find on the quotation sites: no Malaysian government body, statutory board or professional institute publishes a residential renovation cost benchmark. Every per-square-foot figure in circulation comes from a contractor or a portal, with no stated method, no sample and no survey date. The nearest authoritative Malaysian construction cost data is the JUBM / Arcadis Construction Cost Handbook Malaysia, and that prices new-build construction by building type per square metre, not homeowner fit-out.

So do not budget from someone else’s average. The method below is my own advice to clients, not a published standard.

Write the scope before you talk about moneyRoom by room, list what is being done: demolition, wiring and plumbing relocation, tiling, carpentry, paint, air-conditioning, lighting, curtains, cleaning. Write it at the level of “master bedroom wardrobe, 8ft, three tiers, hardware included”. A vague scope makes quotations incomparable and variations impossible to refuse.
Get three quotations against the same scopeSend the identical scope sheet to three contractors and insist on an itemised quotation with unit rates and quantities, not one lump sum. What you are comparing is the spread on each line and, more importantly, what someone has left out – omissions come back later as variation orders.
Check the contractor, not just the portfolioAsk for the company name and SSM number, the addresses and owner contacts for three comparable recent jobs, and whether they have worked in your building before – a contractor who already knows the management’s rules saves days. For strata, confirm they will sign the management’s renovation rules and carry the deposit conditions.
Hold 10-15% back as contingencyThis is my advice, not a published standard. Old units almost always reveal something once they are opened up: corroded pipework, aged wiring, an uneven screed, a hidden leak. The contingency is for those, not for upgrading finishes halfway through.
Tie payments to completed work, not to datesPay against stages you have inspected and accepted: deposit, demolition and M&E complete, carpentry on site, carpentry complete, paint and cleaning complete, balance on final acceptance. Keep the final tranche large enough that snagging actually gets done. Maybank’s MyDeco model is a fair template: up to 30% against quotations, the rest paid against completed works.
Get the approvals before anyone swings a hammerWritten management approval, the deposit, working hours and lift protection, and – for anything structural – the local authority’s approval, all before day one. The s.70(13) penalty for starting without permission costs far more than the weeks you thought you were saving.
Keep every receiptQuotations, invoices, receipts, transfer records, approval letters and dated photographs, scanned into one folder. That folder is the only evidence that will support a permitted-expense claim against your RPGT gain years from now.

Louis’s note: people budget for price plus renovation and forget the month they collect keys: assessment (cukai taksiran), quit rent (cukai tanah), maintenance charges, utility deposits and insurance all land at once. The list is in the after-keys checklist and maintenance fees and sinking fund.

The traps that cost the most

Booking the contractor off the back of a letter of offer. The renovation tranche is released on the bank’s schedule, typically after the housing loan is fully disbursed. Read the clause, then set the start date.
Reading HCGS-MADANI’s 20% as a renovation allowance. It is shared with MRTA/MRTT, LTHOT, the solicitor’s fee and the valuation fee, inside a RM360,000 financing limit.
Comparing a flat rate with a reducing-balance rate. Different arithmetic entirely. Compare monthly instalments and total repayment.
Applying after starting. Strata work without written approval can be fined and ordered reinstated; structural work without a section 70 permission runs to five-figure fines and a possible demolition order.
No written renovation contract. It should carry itemised prices, a programme, payment stages, material brands and models, written confirmation for every variation order, and a defects warranty with a stated period.
Paying cash to save a few per cent. You pay it back with interest at RPGT, because expenditure you cannot evidence is expenditure you cannot deduct.
Claiming renovation as a repair against rental income. PR 12/2018 allows only ordinary repair to maintain the property in its existing state; a wrong claim is tax plus penalty later.
Trusting a per-square-foot figure from a portal. No Malaysian authority publishes one. Budget from your own three itemised quotations.

Louis’s note: if the unit is being renovated to let, specify for the tenant rather than for yourself. Tenants pay for storage, air-conditioning, hot water, internet and floors that are easy to keep clean – not for the feature wall you spent the most on. The letting process is in renting out your property and the return maths is in rental yield.

Frequently asked questions

What is the interest rate on a renovation loan in Malaysia?

There is no single renovation loan rate to quote, because it is not one product. Banks package renovation money three ways: personal financing (usually quoted flat, tenure capped at 10 years), a renovation facility attached to a home loan, and renovation built into a housing loan or refinance at housing pricing. The same headline percentage means very different money under a flat rate than under a reducing balance. Ask every bank for two figures instead: the monthly instalment and the total repayment over the full tenure.

Can I apply for a renovation loan before I get the keys?

In practice, no. Bank credit policy generally requires vacant possession and a fully disbursed home loan before renovation money is released. Maybank’s Home+Reno page states plainly that the renovation portion is disbursed progressively over 12 months only after the home financing portion is fully disbursed. The reason is structural: on a new-build the last 17.5% falls due at vacant possession, and on a sub-sale the bank’s charge is registered only after transfer. It is credit policy rather than regulation, but plan your timeline around it.

How much can HCGS-MADANI lend for renovation?

SJKP publishes no renovation sub-limit. HCGS-MADANI guarantees up to 120% of the house purchase price – 100% for the property plus 20% of the price shared between MRTA/MRTT, LTHOT, the solicitor’s fee, the valuation fee, renovation and furnishing – and the whole facility is capped at RM360,000. On a RM300,000 house the shared envelope is RM60,000 before insurance and legal fees come out of it. Plain HCGS, capped at RM500,000, does not list renovation at all.

Do I need management approval to renovate a condo in Malaysia, and how much is the deposit?

Yes. By-law 27 of the Third Schedule to the Strata Management (Maintenance and Management) Regulations 2015 requires the proprietor to obtain prior written approval from the management before carrying out any renovation works. The by-law permits the management to take a deposit to protect common property, but it sets no national amount and no refund timetable, so any figure quoted as standard has no legal basis. Ask the management office for their written renovation rules, including the deposit, the refund conditions and the timeline.

When do I need a renovation permit from the council in Malaysia?

The trigger is structural work, not cost. Section 70(1) of the Street, Drainage and Building Act 1974 prohibits erecting a building without the local authority’s prior written permission, and s.70(2) requires a Professional Architect, Professional Engineer or registered building draughtsman to submit the plans. Typical triggers: altering load-bearing walls, columns or beams, enlarging structural openings, adding floor area or a storey, changing the facade, and altering drainage or sewerage. No council publishes a ringgit exemption threshold, so take your drawings to your own local authority.

What is the penalty for renovating without approval in Malaysia?

Under Act 133: section 70(11) covers unauthorised alteration, with a fine up to RM25,000 and the court able to order the work altered or demolished; section 70(13) covers commencing erection without permission or deviating from approved plans, with a fine up to RM50,000, imprisonment up to 3 years and a further RM1,000 for each day after conviction; and section 70(14) provides for a sum of not less than five and not more than twenty times the prescribed fees. In a strata building there is also the management’s own fine under by-law 7, plus the cost of reinstatement.

Is renovation tax deductible against rental income in Malaysia?

No. LHDN Public Ruling 12/2018 allows only an “ordinary repair to maintain the real property in its existing state”, which is what excludes renovation, improvement and extension – those are capital. Where the money does come back is on sale: under Schedule 2 paragraph 5(1)(a) of the RPGT Act, expenditure incurred to enhance or preserve the value of the asset and still reflected at the time of disposal is a permitted expense against the gain, with LHDN’s own example being additional works on a building acquired. Keep the invoices, receipts and transfer records.

Sources & verification

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.

Stage 5

More in this stage

After Buying a House in Malaysia: Utilities, Assessment Tax, Quit Rent, Insurance & Management ChecklistAfter buying a house in Malaysia: TNB deposit of about 2 months' bills, water account transfer, 3-month council notice, 31 May quit rent deadline. JB and KL.Renovation Permit Malaysia: Council Permits, Condo Management Rules & Contractor TipsRenovation permit Malaysia: when landed homes need council approval, why condos need written management approval, MBJB fee example and how to check CIDB.Renting Out Property in Malaysia: Tenancy Stamp Duty, Rental Income Tax and the Letting ProcessRenting out property in Malaysia: the RM2,400 tenancy stamp duty exemption ended 1 Jan 2025, self-assessment started 2026. Rates, examples, penalty waiver.Selling Property in Malaysia: RPGT Rates 2026, Seller Costs and Step-by-Step ProcessSelling property in Malaysia in 2026: RPGT is 0% for citizens after year 5, buyers retain 3% or 7%, file within 60 days. Full RM600k example and seller costs.Wills and Property Inheritance in Malaysia: Joint Ownership and What Happens Without a WillProperty inheritance in Malaysia: with no will, the Distribution Act gives spouse 1/4, children 1/2, parents 1/4. Wills, probate and joint owners explained.Rental Yield in Malaysia: Gross vs Net, and What Landlords Actually KeepRental yield Malaysia, done properly: gross is rent over price, but after maintenance, assessment, commission, vacancy and tax a 5.28% JB condo nets 3.18%.

← PreviousWhen a Foreign Owner Dies: Malaysian Wills, Probate, Resealing and Consent for Heirs Next →Renting Out Your Property in Malaysia: Rent, Tenants, Tenancy Agreement and Handover

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.

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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.