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 izit a must to declare rental income to income tax

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rakyat
post Nov 8 2010, 09:22 AM

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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)... biggrin.gif

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.
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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.)
rakyat
post Nov 8 2010, 11:14 AM

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QUOTE(DannGun @ Nov 8 2010, 10:09 AM)
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?
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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 rclxms.gif
rakyat
post Nov 8 2010, 01:15 PM

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QUOTE(Adrian1981 @ Nov 8 2010, 12:35 PM)
If you do not have the tenancy agreement stamped, i dont see why u need to declare it .. they wouldnt know anyway :pppp
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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 brows.gif
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