How many of you actually declare your rental income when you file your taxes (resident and non-resident)?

In addition, I have the following questions:

1. When we file rental income tax, can we deduct the amount for maintenance fees, sinking fund, insurance and quit rent?

2. My sister work and live overseas. She is not a Malaysian tax resident and only comes back 2 weeks in a year. She has recently purchased a property in Bolehland and will rent it out to a close friend and her friend will deposit the monthly rent into her bank account in Bolehland. No lease agreement signed, just based on verbal agreement. Should she file her Malaysian tax return for the rental income as a non-resident??

This post has been edited by StevenTeh1980: Sep 24 2013, 10:42 AM

1. Yes

2. Have to declare income under non resident, flat 25% tax, no personal deductibles

Gark, did you declare before? If you do, mind to share the following:

1) When declare through e-Filling, do we list down individual allowable expenditure or just sum everything less out with the gross rental for a year?

2) Interest on loan can be served as expenditure for deduction. How can we find out what is the interest on loan for the respective year?

3) If those expenditure without receipt, can we still use to deduct?

Anyway, my colleague found that it is 26% instead.

This post has been edited by almeizer: Sep 24 2013, 05:26 PM

1. Sum the nett

2. Bank statement

3. Alternatively show invoice and proof of payment

Thanks Eddy, but the Bank Statement need to request from bank? My instalment paid through Auto-Debit every month.

Loan statement normally is bi yearly via mailmail. I receive mine in August and February usually. My other loans give statement every month via downloading. So depend on banks and type of loan

1. Declare net income (gross rental-allowable expenses).

2. You will get your total interest expense from your loan statement (delivered to you from the bank)

3. No receipt/No proof/no voucher = no deduction

4. Non resident have to declare under Form M, yes it is 26%

This post has been edited by gark: Sep 24 2013, 08:20 PM

No agreement signed & stamped, no need declare la.
No black & white, declare for what?

If reali so unlucky kena tangkap (which is super highly unlikely), just say your sister let her fren stay for free lo.

We just advice what is according to law. Not all will want circumvent the law. Some people are honest and some are not.

If an individual decides to break the law, it is their decision and if get caught will be their own consequences.

This post has been edited by gark: Sep 24 2013, 09:02 PM

maybe you don't know what is transfer pricing arrangement. if you say free then IRB will help you determine the market rate to assess the taxable income

as you have said, the chance of getting caught is actually very slim which is true too

Good luck if you are evading tax. Once you are in their blacklist, every 2 years you will be audited. When they want to be nasty, they will tax every penny out of you. They will look at all your expenses and disallow every receipt which is not claimable. And they will look at your spending and ask you to justify how you can afford. It is a real pain in the arxx

Penny wise, pound foolish some folks prefer to be?
Dont mess with the Gov - they are more organized than organized crime. They are... THE GOV

This post has been edited by wongmunkeong: Sep 24 2013, 10:19 PM

That's why we must implement the GST. Too many people are evading income taxes.

For those who support the current Govt here in M'sia, please don't declare. If you are supporting for a change because you believe we need a cleaner Govt, then please do your duty and pay your taxes. What's the point of fighting for a change when the people themselves choose to falsely declare their income?

I vote for opposition yet i pay every single sen of tax, as long as i do my duty as a citizen. The government is just a political party, the country is what i pay to. If they misuse my money so be it, i can use the ballot box to voice my dissatisfaction.

This post has been edited by gark: Sep 24 2013, 11:04 PM

That is what I consider patriotic. Patriotic is not about flying flags. That is shallow thinking by some politicians

For someone like me who are being taxed peanuts so far, I'll take my chances with the taxman
The last time I get audited few years back, I was further refunded by them... hehehe...

Call me foolish, but I reali wanna c how efficient the taxman is in catching up with all those small fries for cases like tenancy w/o agreement (even those with agreements for that matters but never file for tax returns) or small enterprises with revenues below rm1 mil.
Coz so far from what I see around me (I only have small fries around me... hahaha), the taxman can definitely do wayyyyyyy better.

This post has been edited by haicaramba: Sep 25 2013, 09:22 AM

There may not be a tenancy agreement but what if LHDN check your bank account and see a consistent monthly amount that is being deposited into your bank account from the same person and this person is staying in a property under your name? These kind of info are not difficult to obtain.

Can bank into your acc, your mom's acc, dad's acc, occasionally go & collect cash, etc.

Be 'creative'.

thumbs up for this!

Hi Forumers.. how about the below, is it done legally..

i buy a house with loan for own stay, then i get my own company to rent back the house from me.

My company gain:
- Save on tax by claiming rental expenses.
eg. 60k rental per year, saves 12k of tax..

I gain:
- I can deduct the sinking, maintenance fees from the rental.
- I can pay less tax vs company tax coz my personal income tax bracket is lower than company tax.
eg: 60k rental income- yearly expenses of 12k~15k, bal 45k pay tax@17%=7.65k;

End up: 12k-7.65k=4.35k(saving on tax)

thanks..

TS tumpang thread,

if i rent out a house for rm1k monthly so i have to declare rm12k nett.
is there any form deductible can reduce the declared income?

TS tumpang thread,

if i rent out a house for rm1k monthly so i have to declare rm12k nett.
is there any form deductible can reduce the declared income?

so far i have not seen any tax comp that employer pays the rental for the employee (60k per year), then the maintenance fees on this property can be deductible against the rental benefits (60k) stated in the EA Form

quit rent, assessment, indah water, management fee, maintenance fee provided that all these are paid by you.

Employer's EPF? 11%= 6600?

Those who alrd refinance the house, how to calc amount of loan interest deductable for rental? Prorated? How?

Have a read on PR 2/2011 example 16 Madam Leong's case

http://www.ctim.org.my/file/news/14/01534_...%20(070211).pdf

There is a way, legally. If you rent out your unit at 1K but your loan, management fee, sinking fund, insurance and etc is >1K, you are actually getting back income from tax.

But, who on earth will rent their property at loss? Perhaps there are, but definitely not the value you mentioned.

Deleted

This post has been edited by truelife: Apr 3 2015, 06:24 AM

But if you're getting back your income from tax, means under the rental bracket, we have to put it as (- RM XXX)?

Dear all,

Appreciate if someone more experience can enlighten me on this issue.

I have an apartment which is currently vacant and not tenanted, however, it's attached car park was rented out in the past 9 months. The car park is attached to the apartment under 1 strata title.

I am still serving the housing loan for this apartment.

May I ask do I still need to declare this car park rental income?

If yes, is it proper for me to deduct this car park rental income against the housing loan interest, maintenance fees and sinking funds, quit rent, assessment receipts and fire insurance as deductible tax expenses?

Appreciate if you could enlightened me on this. Thank you.

Rent = 1000

Bank loan can be included as expenses ?

ex. (Maintenance Fee, quit rent, Indah water, Repairs, Bank Loan)

BL (500) + MF, QR, IW, Repairs (300) = left 200

The 200 to be taxed only ? or no such thing as include bank loan for tax deduction ?

Only interest paid on loan taken to finance the purchase of real property which is rented out is deductible.

Bank loan is capital in nature, cannot claim as deduction.
If interest is 100, then your statutory rental income is 600

A very hot topic, this thread,... relived here,....

Google Public Ruling 4/2011. Everything about rental income and tax treatment is there. Even examples are given.

It's a landlord tax bible

May i ask, if the nett (rental income - expenditures - interest) is negative, do i still need to file for tax ?

Appreciate some input

thanks

Yes prolly still have to

the best to get a good accountant who always declare for his customer to do it for you .

Keep all resit , anything also can put under cash expenses , i didnt know bout this until recently i have to declare income tax for buying house
seems like i can declare alot so i wont be paying alot of sum towards LHDN !

If the rental is non-business source, then you cannot claim losses or carry forward for offset in future years. Also there is no column to fill in negative numbers in e-filing for other income

Not “anything” can put under allowable expenses. Only limited expenses as determined by LHDN. You better be careful, as you may be penalized and have to pay hefty penalty if you simply claim expenses. LHDN is never friendly to people who claim money from them

Refer to PR4/2011 for reference. http://lampiran1.hasil.gov.my/pdf/pdfam/PR4_2011.pdf

Really?

wow then i have to discuss back with my account person , cause last time another account person randomly declare without proper documentation end up i have to pay RM22k , but already send letter to revise the account as miscalculation

But from the expenses categories being told to me is something like this

1) buy transport for business
2) staff leisure , food , etc
3) shop equipment renovation , machines etc
4) salary staff / director
5) printing accessories
6) petrol toll touchngo
7) advertisement , rental , bills
and few more

correct rite?

You are talking about expenses related to a business. If your rental is considered a business source, Eg renting out a building like office tower or shopping centre, then it is a business source, you can claim those expenses you listed. Usually the business is run as a Sdn Bhd

However, for the masses who have properties under their personal name, the above expenses are not claimable because it is considered a non-business source

A lot of details and different treatment in relation to rental income in the Public Ruling 4/2011 I linked above. Including how to determine rental income is a business and non-business source

Yes !

That is on rental income of residential properties and applies to each single property a landlord has. Meaning if my rental income per house is RM1800 per month, then my actual reported rental income for tax purpose is only RM900 x 12 = RM10,800. If my tax rate is say, 24%, then my tax savings is ~RM2.6k per property per year

If I have say 3 properties, I "save" ~RM7.8k ! Can buy new Iphone XI plus a Samsung Note 9

But on the expenses side, still no change. Cannot simply claim

The purpose of the above tax incentive is "to encourage landlord to rent out residential homes at a reasonable rate to allow more affordable housing to be made available". Very naive thinking by Ah Jib Anyway, it is good for the landlord only, I doubt tenants will benefit from the tax incentive by cheaper rental

Sometimes I wonder why I still vote opposition. The current government is so good to us. Whereas if opposition becomes the government, they will be more left wing and socialist programmes. Which means skewed tax rate on the richer society (like UK, USA, Australia up to 49% tax), inheritance tax, luxury car tax, luxury goods tax (eg LV bags, AP watches) etc

Oh man thanks for the input

maybe thats what he meant , any resit but claim under business related spending

Not “any resit” also can claim even for business.

Be careful on entertainment, traveling, car, director’s expenses, BIK....

I am sure your accountant with experience will advise you on the proper way. Just don’t assume “everything” can claim even if it is under a business

I just submitted to the account person

Directors expenses and car repair resit also he asked , and since i asked why he told me that can be declared under directors cash expenses ?

Bro, here is rental income tax discussion. Wrong thread to discuss. There is a income tax thread in the sticky you can post your questions there

Anyway, not saying it cannot be claimed, just there are restrictions and proper ways to declare, and also BIK issues

You can post your questions in the income tax thread and get response from tax experts

Hi, this interest mentioned, is it the loan interest while the property is being rented or while the project is being developed?

I have a condo that is being rented and my understanding was rental income - expenses (maintenance, repairs, etc) = taxable figure

To my understanding it is loan interest paid during that particular year of assessment while the property is being rented.

You can't be renting out a property while the project is being developed right? Without Certificate of Completion and Compliance.

Please refer to Public Ruling No. 4/2011 Income from Letting of Real Property issued by IRB.


This post has been edited by Ah SiAnG: Mar 4 2018, 11:28 AM

I'm very new to property but there is a period when the loan gradually starts according to the progress of the property right? May be with DIBS many didn't have to pay. Or my understanding is wrong

Looking at it at a glance but i have not read through fully.

Just had 3 questions in my mind:
1) If the unit is not tenanted, put 0 or leave it blank while filing the tax? My unit was vacant for a year few years back.
2) Usually the bank interest is high during the first few years, assuming the statutory income from rental is a negative number after all the deductions, put 0?
3) I've not declared the first year income from rental, if i want to declare, what are the steps?

Thanks.

Tumpang thread. Want to ask if i rent out room by room. No tenancy signed as too many copies since i rent room by room. Only giving rental invoice receipt to tenant. How shld i report the tax?

IE FY2018
Master room 700 start rent Jan 18
Bedroom 2 500 start rent Jan 18
Bedroom 3 500 start rent Jun 18
Bedroom 4 500 start rent Dec 18

On Dec 18 bedroom 2 tenant moving out.

If abv scenario is it i kept all rental inv receipt and sum up whole 2018 yr rental income & minus deductable expenses and report to LHDN?


This post has been edited by DjS: Mar 7 2018, 09:05 PM

Should be. No other way.

Dear Sifu,

If SPA under joint name A & B,
loan under name A only [loan interest for the particular year RM5000 (example) ]
rental agreement under name A only and annual rental collect RM10000 (example)

Case study:

Total deductible rental income let say RM2000 (cukai pintu, Tanah etc) + RM5000 (interest) = RM7000

when filing rental income, If both A & B have file separately, both also need to declare rental income even if rental agreement under name A only (correct me if I am wrong).

Mr A need to declare rental income : ( RM10000 - RM7000 ) / 2 = RM1500

How about Mr B ? :

1) Mr B need to declare ( RM10000 - RM2000 ) / 2 = RM4000 (Because loan only under Mr A) , or
2) Mr B need to declare ( RM10000 - RM7000 ) / 2 = RM1500 ?

Thank in advance

Never a sifu....

Calculation 2 is correct. Each declare RM1500 rental income respectively.

Rental income is apportioned based on the % of ownership. Not according to name in rental agreement (for practicality purpose because tenant don't usually bank in monthly rental for 2 person)

As long as the property is pledged for the bank loan, then the interest is allowable to offset against the income. Although the loan in under A only, B also can claim. Ie. calculate the overall rental income less all expenses, then declare the income based on % of ownership

Woah....nearly forgot ! For 2018 rental of residential property under RM2000, only declare 50%.

Thank you Najib !

https://kickmeaway.blogspot.com/2018/11/how...e-for-lhdn.html

After reading a few viral post and some search online, it is minus expenditure, then only 50% discount.
Initially I thought 50% discount, then only minus expenses.

Thank you so much for the advice.

As for the madam leong case you share above, regarding the refinance matter. How if:

Madam Leong refinance again to another bank with loan amount RM1.8 million, how to calculate the loan interest for the rental tax deduction ?

Madam Leong previously refinance from bank A to bank B with loan balance from RM1.0 million to RM1.3million, now with bank C RM1.8million.

Which is correct for loan interest deduction ?:

1) 1.0 mil / 1.8 mil x loan interest from bank C or

2) 1.3 mil / 1.8 mil x loan interest from bank C

Thanks in advance

Knowing LHDN does not intend to lose tax revenue, their calculation will be :

The balance of 1st loan at time of 2nd refinancing / 1.8 mil x loan interest from bank c

Ie. Should be lesser than 1.0 million because, assuming there is no refinancing at all, the monthly installation will reduce the principal amount, hence interest expense should reduce accordingly.

I think the main criteria hold by LHDN will be always use the original financing amount an investor needed at the time of buying the property. The interest expense incurred for this original financing amount will be allowable.

You cannot keep on re-financing say, every 10 years and claim interest expense indefinitely

The safest and to avoid possible penalty, it is best to keep the repayment schedule of the 1st loan and use the balance principal at the time of refinancing for income tax computation

However, I am not sure how many people will follow this way

Hi, I am new to the rental income declaration.

How much i would need to declare if my rented house is RM1900 per month starting from October 2018 and my house loan installment is RM2031 per month?

Hope to receive advises from anyone

Thanks

Please prepare a simple balance sheet to calculate how much you have to declare.

Net rental income = rent - rental related expenses.

Nothing to do with your installment amount.

Gross rental = 1800 x 3 months.

Less

Rental expense =

1. Interest portion instalment for 3 months Oct to Dec
2. Quit rent ÷ 12 x 3 months
3. Assessment ÷ 12 x 3 months
4. Agency fee ÷ 12 x 3 months (Bal cf next year)
5. Others ÷ 12 x 3 months

Prev gomen announced rental income for 2018 and 2019 only 50% subject to tax, trying to keep tab on landlords by stamping agreements.
i spent few hundreds RM on it. Is the 50% rental income tax on?

Anyone knows where to read more about it?
rental RM1000 a month just declare RM500 for tax.....?

Post #58

URL: https://kickmeaway.blogspot.com/2018/11/how...e-for-lhdn.html

Noted Thanks

Dear Sifu

Case 1 :
SPA joint name, A & B & C
Loan name under A & B & C
Tenancy Agreement under B only
Monthly rental deposit to B's bank account

Q1. According to Showtime747's reply, each should declare income - expenses divided by three.
Q2. Is it possible that only B declare 100% of the rental income, A & C don't declare.

Case 2.
SPA name, D
Loan settled
Tenancy Agreement under E only
Monthly rental deposit to E only (As D want to give E all of this rental income)

Q3. Can E file rental income only and D do not file?

Note:
My friend asked in LHDN, they counter's staffs (they looks not that sure) said the name that appeared in tenancy agreement should declare.
Q4. Or is it doesn't matter who declare as long as the "rental income" is fully declared?

Looked around 12/2018 but cant find answer
http://lampiran1.hasil.gov.my/pdf/pdfam/PR_12_2018.pdf

Thanks sifu, appreciate your reply!

Hi Sifu,

I know it's small amount for the IWK bill, Can we deduct IWK bill from the rental income of the tax return.

TIA

Yes.
But shouldn't that bear or payable by your tenant?

I think sewerage charges should be treated like other utilities such as water, electricity and telephone charges, so it should be the tenant that has to pay.

Hi,

If declare rental income thru efiling do we need to provide and calculation or evidence? Is it under pendapatan berkanun dividen dan sewa? Just fill in the amount based on own calcation will do?

Just keep your calculation and evidence in the event of audit.
Yes. Under that section.

Thank you... wonder will it trigger lhdn fot audit if suddenly declare rental income.

Not sure.
Just be ready since it's out from your normal filing trend.

Some posts back....a forumer mentioned e stamping....thus i feel the audit will come at some time

Hi Sifu,

I've a appt in KL and can I claim the tax rebate for the agent fee for getting a new tenant and also appt refurbish expenses during vacant time.

I've tenant A shifted out in 31 Dec 2017 and my agent managed to get new current tenant B onboard from 1 June 2018.

Tenant A - Mar 2016 to Dec 2017
Vacant period - Jan 2018-May 2018
Tenant B - Jun 2018 - Now

Can I claim the tax rebate on the followings,

- 1 month Agent fee to get new tenants in Jun 2018
- Contractor Re-paint who appt - RM1200 in March - May2018
- Replacement of water heater due to leaking - RM900 - Feb 2018


TIA.

This post has been edited by utellme: Mar 6 2019, 01:19 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.

This post has been edited by David83: Mar 6 2019, 01:51 PM

I been tax audit twice, no problem to - IWK as expenses.

It is important to note that the expenses are deductible in the year they were incurred, even though you have not made any payment for them during the year.
Having said that, do ensure that your obligations as a landlord towards the expenses which are to be borne by you, are clearly spelt out in the tenancy agreement to avoid any disputes by the Inland Revenue Board (IRB) against your claims for the said expenses.


http://malaysiantaxation101.com/2013/01/ex...-real-property/

Thank you for the details feedback. That means beside property maintenance fee, cukai ointu & cukai tanah and insurance, I can claim the tax rebate for all the 3 items as mentioned. agent fee, repair expenses. plus 50% discount from rental income.

Hi
first time do rental income e-filling, don't see any section for rental tax exemption. So the declare rental income is Rental - Bank Interest - Maintenance fees etc= net?

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.

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

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.

Found the interest payment statement! thanks bro

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

Yes you can for both.

According to this website:
https://www.liew.my/usr/pagesub2.aspx?pgid=264

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

Isn't what you mentioned falls under Initial Expenses?



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

[attachmentid=10207464]

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.

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