I have a question regarding calculation for net income of a residential rental property.
which is the correct way calculating the deduction

Income
Rental Condo (Jan-Dec 24) : 20400
Rental House ( Aug to Dec 24): 12,000
Total Income: 32400

Deduction A
Maintenance Condo (Jan to Dec): 6000
Interest on housing loan ( Aug to Dec 24): 10000
Net income: 32400 - (6000+10000)

Deduction B
Maintenance Condo: 6000
Interest on housing loan ( Jan to Dec 24): 24000
Net income: 32400 - (6000+24000)

As my house only started to rent out in Aug, can i consider my housing loan interest from Jan to Dec 24 instead of taking only the interest from Aug 24 to Dec 24
This is because i tried to rent out my house but since no taker, house was empty for 7 months while interest continued to be paid to the bank

Appreciate your advise

Thank you so much!!

As logic dictates, should be can. Because yr loan is from Jan to Dec, rent income start Aug. So ur income only 5 mths..takkan Jan to Jul dont need to pay loan😂 if got pay loan then interest is calculated and can be deducted. That's what I would do la, don't know about others

Thanks. But since my house is empty from 2021 onwards (not staying there anymore and only receiving my rental from my condo) does that mean i can use the interest of my house to count as part of my deduction?

This situation for your house you will probably have to get real advice from a tax consultant. Unless someone who has done the same and been audited by LHDN chimes in.

the quick answer is No, cos as there is no business income, all your expenses are normally not allowed.

However you may need to engage a tax advisor for this or you can go to Irb office at UTC to ask them

Thanks. But declaration of rental and income are count as combine right? Not individual property. Etc Combine income of 2 rental property - combine of 2 deductions.
As my condo has been fully paid, i can use the deduction of my house to offset the rental income of my condo as well.

Etc
A) Condo rental : 12,000
Deduction: 6,000
Net Income: 6,000

B) House rental: 12,000
Deduction: 15,000
Net income: -3,000

Total net income: 3000

personally i don't think you can offset it that way

for Rental A, your income is 6k and for Rental B, there is no taxable income

each rental may be seen as a separate source meaning you can't use one to offset against another unless you're in the rental business full time.

also in IRB checklist, when your business register a loss, automatically they will take a closer look to ensure that there is no hanky panky

Expenses for rental property is claimable for those months the landlord receives rental income.

Things like this - you could have use chatgpt or perplexity.

In Malaysia, deductible expenses for rental properties can only be claimed for periods when the property was actively generating rental income. Here's the breakdown:

### Key Rules for Rental Income Deductions:
1. **Interest on housing loans** is deductible **only for months the property was rented out**[5][7].
2. Expenses must be incurred "in the course of producing rental income" – vacant periods do not qualify[8].

### Your Scenario:
- **Condo (Jan–Dec 2024):**
Full-year maintenance (RM6,000) and interest (if applicable) are deductible.

- **House (Aug–Dec 2024):**
Only interest incurred **during the rented period (Aug–Dec)** is deductible. Vacant months (Jan–Jul) do not qualify[7].

### Correct Calculation (Deduction A):

Income	Amount (RM)
-----------------------	-------------
Total Rental Income	32,400
**Deductible Expenses**
- Condo Maintenance	6,000
- House Loan Interest (Aug–Dec)	10,000
**Total Deductions**	**16,000**
**Net Taxable Income**	**16,400**

### Why Deduction B Is Incorrect:
- Claiming RM24,000 in interest (Jan–Dec) for the house includes **7 months of vacancy**, which violates LHDN rules[5][7]. Only RM10,000 (Aug–Dec) is allowable.

### Additional Notes:
- Keep records of tenancy agreements and interest payment schedules for verification[4][5].
- Losses from rental properties cannot be offset against other income sources[8].

This aligns with Malaysia’s Income Tax Act provisions cited in multiple sources[5][7][8].

Citations:
[1] https://theedgemalaysia.com/node/730765
[2] https://www.hasil.gov.my/pdf/pdfam/PR2_2011.pdf
[3] https://www.maybank2u.com.my/maybank2u/mala...operty-tax.page
[4] https://www.yhtanmy.com/blog/rental-income-tax-malaysia/
[5] https://www.propertyguru.com.my/property-gu...-malaysia-11868
[6] https://www.propertyguru.com.my/property-gu...ent-rates-15151
[7] https://www.freemalaysiatoday.com/category/...-rental-income/
[8] https://landco.my/social/rental-income/
[9] https://www.edgeprop.my/content/1908572/eas...me-tax-malaysia
[10] https://phl.hasil.gov.my/pdf/pdfam/PR_12_2018.pdf
[11] https://www.iproperty.com.my/guides/rpgt-20...culate-it-23644
[12] https://www.freemalaysiatoday.com/category/...up-to-rm500000/
[13] https://www.hasil.gov.my/en/individual/indi...me/tax-reliefs/
[14] https://thesun.my/business-news/tax-matters...uals-CL10823643
[15] https://www.globalpropertyguide.com/asia/ma...taxes-and-costs
[16] https://www.hasil.gov.my/pdf/pdfam/RDIG_22082022.pdf
[17] https://www.yycadvisors.com/tax-knowledge-english.html
[18] https://www.payrollpanda.my/help/what-tax-d...-the-year-2024/
[19] https://phl.hasil.gov.my/pdf/pdfam/RDIG_25072019.pdf
[20] https://www.iras.gov.sg/taxes/individual-in...erty-rented-out
[21] https://www.cimb.com.my/en/personal/help-su...erty-loans.html
[22] https://www.iproperty.com.my/guides/what-is...aysia-faq-37894
[23] https://www.iproperty.com.my/guides/rental-...ty-owners-46565
[24] https://taxsummaries.pwc.com/malaysia/individual/deductions
[25] https://kpmg.com/xx/en/our-insights/gms-fla...t-2024-237.html
[26] https://theedgemalaysia.com/article/edge-sa...ill-be-disaster
[27] https://theedgemalaysia.com/node/730785
[28] https://www.bakertilly.my/public/files/1497...7a343f81b16.pdf

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Answer from Perplexity: pplx.ai/share

Yes you can. If both houses are rented out, they can be combined as a single source:

I used (total rental per yr) - (total interest) - (total cost) then divide by how many name per properties.

Kena audit twice already. No problem.

But i split calculation per property. According to my accountant friend he said can just lump sum all rental and expenses accross different property

I have a ethical question...why do you choose to declare your rental income?

If don't declare...how will LHDN know?

For your case, this is probably a rental as a *non-business source*, so Deduction A is the correct one





But if you rent it out as a business source, then deduction B is the correct one

era of e-invoicing LHDN will know if the tenant register a business and put the rental paid to you as his expense.

In LHDN, there will be a record of income from rent.

For example, your estimate property monthly payment could be RM10,000 from 4 properties. Your EA form states your monthly income is RM14,000.

So if you don't rent out, by LHDN estimate, you only have 4K left to spend a month.

But if you travel Airasia to Bangkok every 2-3 months (Airasia generates e-invoices to LHDN), surely you got undeclared income.

and LHDN will just audit and first thing they ask is rental income, easiest to catch.



This post has been edited by Chrono-Trigger: Apr 1 2025, 05:48 PM

So meaning you can combine both income and expenses to declare right rather than calculate individually. This means i can use the deductible from my house expenses offset the condo net rental income.
Since both are count as total.

Tumpang, hope TS does not mind:

Q: if rental is less than (loan interest+ maintenance fees), do we still need to report to LHDN, since we're making a "loss"?

Not a tax accountant but yes, assuming that house is being rented out. But my tax guy does it individually (i.e. each rental expense deducted from the derived rental revenue source). Dunno why since can lump sum.

Still gotta report lah. Later they ask why suddenly one year no info.

For a legit rental scenario, there will be a tenancy agreement that will be prepared and stamped with LHDN - which contains the landlord's name + IC and tenant's name + IC. That is how, my friend, LHDN can easily know.

What if no stamping?

i kena audit before. i combined the total of all properties rental - all deductibles. its allowed.

if property A = rugi 1000

property B = untung 1000

then ur balance is 0.

This post has been edited by pisces88: Apr 2 2025, 02:01 AM