hi,

i need to know, which one is better...buy a property under company or individual? can buy cash??

only sdn bhd or bhd company can buy property

if u company is a sole proprieter, aka syarikat / enterprise, you can't

the advantage of buying property thru company is that the monthly interest can be deducted as expenses (bank charges)

however, bear in mind that this will affect your capital allowance


you can buy using cash if you have proof that you have earned that amount of money and has been paying taxes accordingly

but best if you don't. this will make things less complicated.


other sifu's, correct me if i'm wrong

This post has been edited by lucifah: Aug 8 2011, 03:14 PM

what if hte borrowing is under directors? can deduct bank interests as expense?

how is the capital allowance calculation?

what if the money come from oversea parent company, still need a proof and pay tax

Any money earned from OVERSEA is not taxable in Malaysia, but you need to proof that you bring in the money into our country in order to buy property in cash money.

However, if the property is resell within 5 years time frame, it will be tax under Real Property Gain Tax.

Sorry, silly question, How to separate the interest portion?

N how does it affect if capital allowance? Does this mean need to increase the paid up/ allowed capital?
Thanks...

your auditor will be the one best to advice you.

take the advices here with a pinch of salt.

To set a coy or not, it would largely depends on 3 things IMHO :

1. Your existing tax bracket
2. Are u a flipper or a yielder?
3. Are you planning to buy props in the long run?

1. Maximum?
2. Both
3. Yes

what's next?

the answer is obvious chief..........

aiyah. dunno how 2 proceed lor.
u never tunjuk ajar pun.
private session, teh tarik.
i belanja.
but you must answer question directly lah instead of all those nursery rhymes.

is it not true that when you put your properties under a company to be able to deduct capital depreciation against your tax payable one need to show that
the company also provide inhouse ancilliary services to manage all the properties ie providing security, maintenance, etc..i was told that it is not as straight forward as just parking a minimum of 4 properties under a company to qualify for capital depreciation deduction..

Any tax expert can clarify?

sole prop is not a company, it's merely a registered biz laa..

Reasons why people use co to buy properties:
1) estate planning. for the next generation
2) not enough capital, need more than 1 person to come up with down payments
3) company own used asset

but for flippers, they should always use individual name to purchase due to tax issues.

i'm not a tax expert..
but it's true that it's not that straight forward...
if you are renting out that property.. that goes into your income, as you have rental yield..
it doesnt count as an expense for your company...

not very sure... correct me if i'm wrong...

not sure abt parking min 4 properties for capital depreciation deduction...

just say i open a sdn bhd and want to buy a property under the company :

i am not encouraged to buy a property cash otherwise lhdn will come running ...

but....

if you apply loan under company , also wont get through, cause my company is new , and got no track record / profit / etc.

What am i missing here ? Can a company loan be based under the director's other source of income ? i.e Salary?

Yes

noted

much clearer now, thanks!

Can I revive this topic based on the latest tax bracket.
A lot of the question is still not being very cleared as to whether a company owing the property is good or by individual is good.

For individual, we already have existing income and if we add on the rental income to it (without able to add in those cost of maintenance) then our income bracket will sky rocket but in actual fact we're only getting an income of few hundred (say rental RM2000 - loan RM1800). But your income is calculating at RM2000 per month adding RM24000 income to your yearly income resulting in a highest tax bracket of 26% which is almost RM4k of taxes.

Please advice for any tax expert.

u may only consider buying using company if your prop value is high, i.e. above RM1mil.
Because company involves expensive cost, such as formation cost, yearly company seceretary fees, audit fees, accounting fees and etc.

From this court ruling, all property purchase only need to pay Akta Keuntungan Cukai Hartanah. No need to declare as income.

http://www.kehakiman.gov.my/directory/judg...a_vs_Promet.pdf

Stupid court ruling, but now everyone can follow, its the law already



This post has been edited by xgmi: May 22 2014, 06:44 PM