Nov 8 2010, 12:33 PM
QUOTE(hakon @ Nov 7 2010, 04:27 PM)
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.
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.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.
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.
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