what happens if we dun declare rental income?
izit safe not to declare?

if i bought a property for 300k and rental get rm1200, installment to bank each month is rm800.
How much should i declare?
property owners kindly advice.

You still need to declare 1200 per month. If you dont afraid IRB check on you, then you can don declared 1. But if they caught, then sure kena fined.

so if i have 5 such properties, even though they give me nett income of rm500 , rm100 each, i still declare a probably income of rm7500
wouldn't i be taxed alot then?

Is there any tenancy agreement taking placce?

u duwan also can geh.....but if u got 5-6 properties and not declare anything, i think IRB sure will come knocking oredi woh..
once they check u and find out u neva declare.......the penalty itself might kill u...

btw, u can offset your loan interest and some other expenses if not mistaken. U can call them up to ask what can n cannot be done.

This post has been edited by mIssfROGY: Nov 6 2010, 06:33 PM

ermmm....i cannot remember exactly...but i think for the 1st few houses u r free from tax...but u must reconfirm wit them again

i am not a tax expert so please check for yourself... i am only sharing what i know (which you consider at your own risk)...

all rental income is taxable... if you have 5 condos and all 5 rented at rm1200, then you need to declare monthly income of 5 x rm1200 = rm6000.

but if you have existing loans for all of them, then you can deduct from the income... for example, if you have 5 loans for the 5 condos, and the interest portion of the monthly payment is a total of rm4000, then you declare a total monthly income of rm6000 - rm4000 = rm2000.

also, if you pay bills and fees, you can deduct from the income too... for example, if condos, you will have monthly maintenance fees, sinking fund fees, indah water, quit rent, assessment fees, etc. all are deductable... so not that bad la...

btw, if you really have 5 condos, then you can treat the rental as a business - which allows some benefits... but this one complicated.

By law u need to declara your rental income especially if you have a stamped tenancy agreement (since it is easy for IRB to trace). If tenancy agreement is not stamp then u can try not declaring, but if you r audited then u need to justify why the unit is left unletted.

You declare the rental minus deductions such as bank interest, maintainence fees, repairs, assessment fees, quit rent and fittings. You cannot deduct your loan installment.

If you own 4 properties for the purpose of earning rental, you can incorporate it as a business (sdn. bhd.)

Let's say we earn RM1k from rental, and we pay RM800 for installment. Isn't it ridiculous if that the rental is taxable, no matter u are still owing or not. and wher do u hear this from?

then appoint urself as a director and claim any expenses against the rental income... ur tax consultant can advise u on that.

The loan interest part is only deductable if the property is purchased after a certain date in the new tax exemption rules. Properties purchased before that, no.

This post has been edited by barista: Nov 8 2010, 10:14 AM

u need to declare the amount after minus out the interest/ins/quit rent/assessment/repair(if there is any)...

normally la... if ur tenant not a company & he/she not report to tax, then u may not need to declare la but if u r holding too many property for renting purpose is better for u to declare lo

I don't hear, I am praticing it. BTW I oso hire a professional tax consultant to file my wife's BE form (the property portfolio is under her company).

Put it another way, if u can deduct installment amt from your rental income then all property taikor do not have to pay income tax on rental yield. No matter how high rental u earn, you just adjust your loan tenure shorter so your installment is higher, once paid up, refinance. I oso wish the IRB implement such policy

Get hold of Helaian Kerja 4 (HK4) from IRB. you can work out your nett rental to be declared from there. Mond you, you don't need to submit HK4 with your income tax form. File it away in case you get a nice courtesy call from Mr. Tax Man.

Declare ALL income. Whether the amount involved is justifiable to be taxed is not for us to decide but the power-to-be in Jalan Duta.

The one highlighted in red is wrong. Your loans are not to be deducted from your income declaration. Because, what you are paying is the value of the home.

For example, you pay in cash RM500,000 for a house. Then you rent it out for RM2,000 a month = RM24,000 a year. You cannot offset part of your RM500,000 on your income declaration. For example, you earn RM24,000 but because you pay in full for the house, you minus RM24,000 for the next 21 years (RM500,000 divide by RM24,000? It doesn't work like that.

What you can deduct is the interest only. If your monthly repayment is RM2,000 and for the first few years, your interest is more than your principal ie. RM1,500 is interest, RM500 is principal, then you can deduct the interest paid for the year.

If you do not have the tenancy agreement stamped, i dont see why u need to declare it .. they wouldnt know anyway :pppp

They will know when they check your CCRIS on what are the loans that u r servicing. They oso know as u need to stamp your S&P, pay quit rent/ assesment ect. But just b'coz u own a property does not mean u rent it out for income

well, depends on how many rental property you have, and also who is your tenant, if you only have one rental income and individual tenant, nobody going to check you. if you rent to a company etc who going to declare the rental as part of tax reduction, then you have to declare although you have only one rental income.

exactly my point .. u can buy the house for own stay - that's not part of the income !!!
I stampted the tenancy agreement, but i've never declare it as part of my income ..

1) Yes, you need to declare rental income.
2) You can deduct your management fee, quit rent & assesment, brokerage commission, interest charges. Net amount is the rental income that you need to declare.

management fee can be deducted?

i only saw the Pelepasan cukai for Feadah Pinjaman Perumahan (mest memenuhi syarat-syarat kelayakan) only. show where to fill in for management fee, quit rent & assessment, & brokerage commission?

do ur own calculation & then put the net figure at "other/rental income"...
for my submission i did not know that mgmt fee can be deducted