The criteria to qualify for this tax exemption are:
- Rental income received by Malaysian resident individuals not exceeding RM2,000 per month for each residential home
Comment: The exemption is not restricted to just one residential property, but as many properties as the individual owns.
- Residential home must be rented under a legal tenancy agreement between owner and the tenant;
Comment: Written tenancy agreements (as opposed to equitable tenancies) are essential to claiming this exemption, with a fair assumption that the tenancy agreement should be duly stamped in order to qualify.
- Tax exemption is given for a maximum period of 3 consecutive years of assessment from 2018 to 2020.
Income Tax Act 1967, refer: https://kickmeaway.blogspot.com/2018/11/ren...income-tax.html
Expenditure allowable for deductions from the rental income of a taxable property are as the following:
- Assessment tax (cukai taksiran or cukai pintu)
- Quit rent (cukai tanah)
- Interest on borrowings/loans
- Fire insurance premium
- Rental collection expenses
- Legal expenses incurred to enforce rental collection
- Rental renewal expense (tenancy agreement, property agent)
- Repair expenses
- Property service charges (maintenance fee, sinking fund)
Initial expenses are not allowed for deductions from rental income of real estate where spending is used to create this source of income. For example, the cost of getting the first tenant such as advertising costs, legal costs to make rental agreements, stamp duty and commissions to real estate agents are not eligible.
LHDN HK-4 Form: http://lampiran2.hasil.gov.my/pdf/pdfam/HK4_2016_1.pdf
Example:
Do take note that 50% exemption is from the gross rental income (not nett income after minus all the miscellaneous cost)
p/s: Just sharing info taken from others. To be sure, please refer your tax consultant or direct with LHDN. Cheers.