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> Rental Income Tax, Rental Income Tax

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cckyew
post Mar 16 2019, 07:02 PM

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QUOTE(MUM @ Mar 16 2019, 03:10 PM)
while waiting for responses,
you may want to read posts from previous page
i think there are some links provided by fellow forummers that maybe relevant.
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Thanks, roughly know what figure to put, but just need to find what is the interest for the loan installment.

Despite read the previous forum, just like to ask
if the rental income is less than expenses, the bracket put RM0?

This post has been edited by cckyew: Mar 16 2019, 07:04 PM
David83
post Mar 16 2019, 07:05 PM

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QUOTE(cckyew @ Mar 16 2019, 07:02 PM)
Thanks, roughly know what figure to put, but just need to find what is the interest for the loan installment.
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Go refer to your house loan annual statement.
It should tell how much of your monthly repayment amount goes to interest payment and principal deduction.
cckyew
post Mar 16 2019, 07:44 PM

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QUOTE(David83 @ Mar 16 2019, 07:05 PM)
Go refer to your house loan annual statement.
It should tell how much of your monthly repayment amount goes to interest payment and principal deduction.
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Found the interest payment statement! thanks bro smile.gif
okuribito
post Mar 18 2019, 06:12 PM

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QUOTE(David83 @ Mar 6 2019, 01:51 PM)
Read Page 18 onwards for Expense Relating to Income of Letting of Real Property

URL: http://lampiran1.hasil.gov.my/pdf/pdfam/PR_12_2018.pdf

Recurring expenses
(a) Assessment and quit rent
Annual assessment paid to the local authority and quit rent paid to the land office.
(b) Interest on loan
Interest paid on loan taken to finance the purchase of real property which is rented out.
© Fire insurance premium
Fire insurance premium paid in relation to fire insurance policy taken on the real property which is rented out.
(d) Expense on rent collection
Rent collection fee and legal expense incurred to enforce rent collection.
(e) Expense on rent renewal
Expense incurred to renew tenancy or to change tenant.
(f) Expense on repair
Expense on ordinary repair to maintain the real property in its existing state.

Initial expenses
Initial expense is not allowed a deduction from income of letting of real property assessed under paragraph 4(a) or paragraph 4(d) of the ITA since that expense is incurred to create a source of rental income and not incurred in the production of rental income. Examples of such expense are cost to obtain the first tenant such as advertising cost, legal cost to prepare rental agreement, stamp duty and commission for real property agent.

Expenses during a period the real property is not rented out
Expenses incurred in relation to a real property during a period it is not rented out are not allowable in calculating the adjusted income from the letting of the real property. However, if the period the real property is not rented out occurs after it has been let out and it is clear that it is ready to be let out, then expenses during that period are allowable subject to subsections 33(1) and 39(1) of the ITA.
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Did not see monthly maintenance fee in your list. For example for condominiums /apartment. Is it allowed expense/deduction?

How about sinking fund? Is it allowed expense/deduction?

TIA


David83
post Mar 18 2019, 06:23 PM

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QUOTE(okuribito @ Mar 18 2019, 06:12 PM)
Did not see monthly maintenance fee in your list. For example for condominiums /apartment. Is it allowed expense/deduction?

How about sinking fund? Is it allowed expense/deduction?

TIA
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Yes you can for both.

According to this website:
https://www.liew.my/usr/pagesub2.aspx?pgid=264
guy3288
post Mar 19 2019, 09:00 PM

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QUOTE(David83 @ Mar 6 2019, 01:51 PM)
Read Page 18 onwards for Expense Relating to Income of Letting of Real Property

URL: http://lampiran1.hasil.gov.my/pdf/pdfam/PR_12_2018.pdf

Recurring expenses
(a) Assessment and quit rent
Annual assessment paid to the local authority and quit rent paid to the land office.
(b) Interest on loan
Interest paid on loan taken to finance the purchase of real property which is rented out.
© Fire insurance premium
Fire insurance premium paid in relation to fire insurance policy taken on the real property which is rented out.
(d) Expense on rent collection
Rent collection fee and legal expense incurred to enforce rent collection.
(e) Expense on rent renewal
Expense incurred to renew tenancy or to change tenant.
(f) Expense on repair
Expense on ordinary repair to maintain the real property in its existing state.

Initial expenses
Initial expense is not allowed a deduction from income of letting of real property assessed under paragraph 4(a) or paragraph 4(d) of the ITA since that expense is incurred to create a source of rental income and not incurred in the production of rental income. Examples of such expense are cost to obtain the first tenant such as advertising cost, legal cost to prepare rental agreement, stamp duty and commission for real property agent.

Expenses during a period the real property is not rented out
Expenses incurred in relation to a real property during a period it is not rented out are not allowable in calculating the adjusted income from the letting of the real property. However, if the period the real property is not rented out occurs after it has been let out and it is clear that it is ready to be let out, then expenses during that period are allowable subject to subsections 33(1) and 39(1) of the ITA.
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Thanks for the above info, what about stamping fees we paid? can claim also?

Previously i never had the tenancy agreement stamped.but now to entitle for 50% rentals declaration, stamping is a must

From 2018 i got all agreement stamped, the fees range from RM30-60 and penalties for late stamping RM25 each.

besides the RM400 per year paid to agents( for sourcing new tenants, getting tenancy agreement signed contractors to do repairs, collect rentals etc),
Can i claim as expenses, the stamping fees and late stamping penalties paid by me?

PS:

I was told, in order to be able to claim tenancy agreement expenses,
it must be a renewal agreement, ie new tenant, first agreement expenses cant claim.
Any confirmation?



This post has been edited by guy3288: Mar 19 2019, 09:19 PM
David83
post Mar 19 2019, 10:10 PM

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QUOTE(guy3288 @ Mar 19 2019, 09:00 PM)
Thanks for the above info, what about stamping fees we paid? can claim also?

Previously i never had the tenancy agreement stamped.but now to entitle for 50% rentals declaration, stamping is a must

From 2018 i  got all agreement stamped, the fees  range from RM30-60 and penalties for late stamping RM25 each.

besides the RM400 per year  paid to agents( for sourcing new tenants, getting tenancy agreement signed  contractors to do repairs, collect rentals etc),
Can i claim as expenses, the stamping fees and late stamping penalties paid by me?

PS:

I was told, in order to be able to claim tenancy agreement expenses,
it must be a renewal agreement, ie new tenant, first agreement expenses cant claim.
Any confirmation?
*
Isn't what you mentioned falls under Initial Expenses?

QUOTE
Initial expenses
Initial expense is not allowed a deduction from income of letting of real property assessed under paragraph 4(a) or paragraph 4(d) of the ITA since that expense is incurred to create a source of rental income and not incurred in the production of rental income. Examples of such expense are cost to obtain the first tenant such as advertising cost, legal cost to prepare rental agreement, stamp duty and commission for real property agent.


This is also confirmed by a tax consultant in the other link shared

[attachmentid=10207464]
guy3288
post Mar 19 2019, 10:44 PM

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QUOTE(David83 @ Mar 19 2019, 10:10 PM)
Isn't what you mentioned falls under Initial Expenses?
This is also confirmed by a tax consultant in the other link shared

[attachmentid=10207464]
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Thanks to confirm for First new tenant, expenses on agreement and stamp duty all cant claim.

and every subsequent new Tenant for that same old house,
is it the same? the expenses on first agreement for every new tenant ,all cant claim?

SO if every year change new tenant, landlord lose out cant claim....



mine are all old tenants and the agreement there stated as renewal agreement,
must ask my agent to strike out that sourcing tenants...


Cant find any where above on stamping fees can claim or not.







David83
post Mar 19 2019, 10:46 PM

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QUOTE(guy3288 @ Mar 19 2019, 10:44 PM)
Thanks to confirm for  First new tenant, expenses on agreement and stamp duty all cant claim.

and every subsequent new Tenant for that same old house,
is it the same? the  expenses on first agreement for every new tenant ,all cant claim?

SO if every year change new tenant, landlord lose out cant claim....
mine are all old tenants and the agreement there stated as renewal agreement,
must ask my agent to strike out that sourcing tenants...
Cant find any where above on stamping fees  can claim or not.
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Stamping fee and stamp duty not the same?

If for new tenant, cannot claim
If for current tenant via tenancy renewal, can claim.

As simple and straight forward as I believe.
guy3288
post Mar 19 2019, 11:00 PM

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QUOTE(David83 @ Mar 19 2019, 10:46 PM)
Stamping fee and stamp duty not the same?

If for new tenant, cannot claim
If for current tenant via tenancy renewal, can claim.

As simple and straight forward as I believe.
*
yes you are right,
now i can confidently claim those expenses, thanks
gc68
post Apr 9 2019, 01:19 PM

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Hi, my brother and I share 2 properties @ 50%:50%

Both are apartments -
Property #1 - Has been vacant for many many years
Property #2 - it was cleaned up and rented out in Aug 2018, from Jan-Jul 2018, it was vacant.

For my rental income reporting :
1. Can I deduct the cost of management fees from Jan-Jul 2018 for Apartment #2 from the rental income when I calculate nett income?
(The tenancy agreement was singed by tenant, me and my brother)

2. I hired come cleaning ladies and plumber to do up the place before I rent it out. I have receipts for the service. Can I deduct these as expenses?

3. Tenant wanted an extra queen size bed. So I went out and got a brand new one for his family. Can I deduct that furnishing as expense?

4. Apartment #1 is empty and we still have to pay the management fees. Can we deduct the management from the income of Apartment #1 when we report income?

5. I will be reporting my 50% portion of the total income from the rental, is that correct?

Thanks for your advice.
David83
post Apr 9 2019, 01:48 PM

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QUOTE(gc68 @ Apr 9 2019, 01:19 PM)
Hi, my brother and I share 2 properties @ 50%:50%

Both are apartments -
Property #1 - Has been vacant for many many years
Property #2 - it was cleaned up and rented out in Aug 2018, from Jan-Jul 2018, it was vacant.

For my rental income reporting :
1. Can I deduct the cost of management fees from Jan-Jul 2018 for  Apartment #2 from the rental income when I calculate nett income?
(The tenancy agreement was singed by tenant, me and my brother)

2. I hired come cleaning ladies and plumber to do up the place before I rent it out. I have receipts for the service. Can I deduct these as expenses?

3. Tenant wanted an extra queen size bed. So I went out and got a brand new one for his family. Can I deduct that furnishing as expense?

4. Apartment #1 is empty and we still have to pay the management fees. Can we deduct the management from the income of Apartment #1 when we report income?

5. I will be reporting my 50% portion of the total income from the rental, is that correct?

Thanks for your advice.
*
If you got time, spend some time to do some readings:
http://lampiran1.hasil.gov.my/pdf/pdfam/PR_12_2018.pdf

It also lists down type of expenses: Recurring expenses, Initial expenses and Expenses during a period the real property is not rented out

This post has been edited by David83: Apr 9 2019, 01:49 PM
gc68
post Apr 9 2019, 01:56 PM

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QUOTE(David83 @ Apr 9 2019, 01:48 PM)
If you got time, spend some time to do some readings:
http://lampiran1.hasil.gov.my/pdf/pdfam/PR_12_2018.pdf

It also lists down type of expenses: Recurring expenses, Initial expenses and Expenses during a period the real property is not rented out
*
Great! Thanks a lot!
guy3288
post Apr 9 2019, 08:40 PM

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checking if i get it right, answers in red.


QUOTE(gc68 @ Apr 9 2019, 01:19 PM)
Hi, my brother and I share 2 properties @ 50%:50%

Both are apartments -
Property #1 - Has been vacant for many many years
Property #2 - it was cleaned up and rented out in Aug 2018, from Jan-Jul 2018, it was vacant.

For my rental income reporting :
1. Can I deduct the cost of management fees from Jan-Jul 2018 for  Apartment #2 from the rental income when I calculate nett income?
(The tenancy agreement was singed by tenant, me and my brother)

NO you cant, that expenses did not help u bring in rental income.

2. I hired come cleaning ladies and plumber to do up the place before I rent it out. I have receipts for the service. Can I deduct these as expenses?

No, initial expenses not allowed

3. Tenant wanted an extra queen size bed. So I went out and got a brand new one for his family. Can I deduct that furnishing as expense?

Again No, initial expenses


4. Apartment #1 is empty and we still have to pay the management fees. Can we deduct the management from the income of Apartment #1 when we report income?

Again No, apartment 1 expenses did not help bring apt 2 rental.

5. I will be reporting my 50% portion of the total income from the rental, is that correct?

rental deduct  allowed expenses first, then only divide by 2.
Not rental  divide by 2 first, then deduct expenses


Thanks for your advice.
*
gc68
post Apr 10 2019, 09:23 AM

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QUOTE(guy3288 @ Apr 9 2019, 08:40 PM)
checking if i get it right, answers in red.
*
Thanks for the answers. So let me get this right :

1. If the expense for repairs and cleaning are incurred BEFORE tenant moves in, then it is considered INITIAL EXPENSE (Para 8.3 of IRB Public Ruling 12/2018), therefore cannot be deducted.

2. If the very same expenses are incurred DURING/WHEN it is being rented out, then it is an expense related to letting of property, and therefore CAN BE DEDUCTED from income.



guy3288
post Apr 15 2019, 09:59 AM

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QUOTE(gc68 @ Apr 10 2019, 09:23 AM)
Thanks for the answers. So let me get this right :

1. If the expense for repairs and cleaning are incurred BEFORE tenant moves in, then it is considered INITIAL EXPENSE (Para 8.3 of IRB Public Ruling 12/2018), therefore cannot be deducted.

2. If the very same expenses are incurred DURING/WHEN it is being rented out, then it is an expense related to letting of property, and therefore CAN BE DEDUCTED from income.
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not all can deduct, spray termites pest control can claim. install new floor tiles, put extra awning may not be able to claim, Taxman arguse you dont add that still can rent also


yklooi
post Apr 15 2019, 01:08 PM

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QUOTE(guy3288 @ Apr 15 2019, 09:59 AM)
not  all can deduct, spray termites pest control can claim. install new floor tiles, put extra awning may  not be able to claim, Taxman arguse you dont add that still can rent also
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thumbup.gif notworthy.gif notworthy.gif
thanks for the enlightenment....
i was chunking out thought about RENT out, then buy furnishing and electrical apparatus then seek tax reduction.....

doh.gif luckily saw this post.... simple sentence
jwlowyat P
post May 25 2019, 06:36 PM

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If the statutory rental income from 1 property is a loss, can I claim the 50% exemption for off set against another statutory rental income which is a gain?

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