Renting Out Property in Malaysia: Tenancy Stamp Duty, Rental Income Tax and the Letting Process

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.

How is tenancy stamp duty calculated, and what changed in 2025 and 2026?

There are two changes here, and most write-ups merge them into one. The rates: the Finance Act 2024 [Act 862] rewrote Item 49 of the Stamp Act’s First Schedule with effect from 1 January 2025, so the first RM2,400 of annual rent is no longer deducted and the rates for terms beyond one year went up. The procedure: from 1 January 2026 tenancies sit in Phase 1 of the Stamp Duty Self-Assessment System (STSDS), so the taxpayer declares and computes the duty instead of LHDN issuing an assessment. The practical consequence: a tenancy signed during 2025 is already on the rates below, so if you are stamping one late, using the old formula (deducting RM2,400 first) under-declares the duty.

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. Note the last row: an indefinite period – an informal month-to-month or auto-renewing arrangement with no stated end – falls into the RM7 band, so it pays to state the term.

The two 30-day clocks: file the return, then pay

1. 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.
2. File the BNDS return within 30 daysTenancies have been in Phase 1 of the Stamp Duty Self-Assessment System since 1 January 2026, so you declare and compute the duty yourself on LHDN’s e-Duti Setem. Section 47 of the Stamp Act is unchanged: the return is due within 30 days of execution, or within 30 days of the instrument first being received in Malaysia if it was executed abroad.
3. Pay within 30 days of filingPayment runs on a second clock: the duty is due within 30 days of the date the return was submitted. Filing on time but paying late still attracts the penalty – RM50 or 10% of the deficient duty, whichever is higher, if stamped within three months of the time for stamping, and RM100 or 20% after that. Those two tiers are section 47A as amended by the Finance Act 2024, in force since 1 January 2025 (the old section had three tiers at 5%, 10% and 20%).
4. 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.

• 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

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

• 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.

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.

Whether a management corporation can ban short-term letting is unsettled. The Federal Court in Innab Salil & Ors v Verve Suites Mont' Kiara Management Corporation [2020] 10 CLJ 285 held that the building's house rule validly prohibited it; but the Court of Appeal in Wawasan Raya (M) Sdn Bhd & Anor v Marc Service Residence Management Corporation [2025] 4 MLRA 1, decided 9 April 2025, reversed the High Court and dismissed the management corporation's suit with costs. The two point in opposite directions and this site prints both rather than picking one. The practical questions are not “what does management say” but: which general meeting passed this restriction, was it filed with the COB, and has a later resolution superseded it? Get your own building's by-laws in front of your own lawyer before you list. The full comparison of the two decisions is in short-term rental and Airbnb in Malaysia.

SST: the answer turns on which taxable group you are in, not on whether the property is residential. A long residential tenancy sits in Group K, rental or leasing services, of the First Schedule: taxable from 1 July 2025 at 8%, cut to 6% from 1 January 2026, and registrable only once rental turnover passes RM1 million in 12 months (it was gazetted at RM500,000 and raised by the Ministry of Finance revision announced on 28 June 2025). Customs’ rental guide excludes housing accommodation, and defines it broadly: terrace houses, semi-detached houses, flats, apartments, serviced apartments, condominiums, serviced suites, affordable housing and SOHO units in residential use. So an ordinary residential landlord on an annual tenancy charges no service tax. Commercial space – a SOFO used as an office, a shop lot – can be caught.

Running the unit as short-stay accommodation is a different group, and the Group K exclusion does not reach it. Accommodation is Group A, the provision of accommodation premises, and it has been taxable since SST began on 1 September 2018 – seven years before the 2025 expansion. The list in Customs’ accommodation guide is “hotels; inns; lodging house; service apartment; homestay; and any other similar establishment“. The Group K exclusion is an exclusion from Group K only: it takes long-term residential letting out of the rental and leasing group and says nothing at all about Group A, so it does not shelter a residential unit that is being run as short-stay accommodation. The Group A rate is 8% – the cut to 6% on 1 January 2026 applied to rental and leasing services only – and registration bites once accommodation turnover reaches RM500,000 in 12 months. The taxable person is the host, not the platform: Customs treats the operator who provides the accommodation as the one who accounts for the tax, whoever invoices the guest, and Airbnb’s own Malaysia tax guide says the same from the other side – the host charges, reports and remits it, and Airbnb does not collect Malaysian service tax on your behalf. What keeps a one- or two-unit host out of registration is that RM500,000 threshold, not a residential exemption.