Malaysian Investment Tax Planning

Here you will find basic guidelines as to what to expect when planning your property investment in Malaysia. For more details it is important to consult an expert tax advisor who will consider your particular situation.

Capital Gains Tax

From 1st April 2007, Capital Gains Tax was abolished in Malaysia. Experts believe that abolishing the tax will further encourage investment from overseas buyers and bring more liquidity into Malaysia's market.

Stamp Duty

Since the 2008 budget, Stamp Duty for the Land Title Transfer for properties costing less than RM250,000 was halved. This benefit is applicable for the purchase of one house for the entire financial year of 2008.

Price Stamp

Stamp Duty in 2007

Stamp Duty in 2008

RM250,000 RM4,500 RM2,250 (-50%)
RM150,000 RM2,000 RM1,000 (-50%)
RM350,000 RM6,000 RM6,000 (unchanged)

(Based on the current rate of 1% for first RM100,000 and 2% for RM100,001 to RM1,000,000)
This situation is prompting property developers to provide more properties at below the price of RM250,000 in order to entice buyers. However, new home buyers face two main Stamp Duties: for title transfer and the bank loan facility agreement.

Inheritance Tax

There is no inheritance tax charged in Malaysia.

Other Taxes

There is no VAT in Malaysia, but a Government Sales Tax (GST) of 5% is charged on hotel and restaurant bills and on professional bills such as lawyers’ bills.

Non-residents are liable to pay tax, without reliefs, on money earned in Malaysia. Rates are 22.4% on monthly income of USD 1,500 and 25.1% on USD 6,00 per month.

Property tax, a local tax based on the annual rental value of your property, is payable in two installments annually. It is usually levied at approximately 6% for residential lettings.

Quit rent is a local tax levied on all landed properties and payable annually at a rate of 1 sen (US$0.003) to 2 sen (US$0.006) per square foot - RM1 = 100 sen (cents). The Quit Rent liability generally totals less than RM100 (USD31) per year.

Once a retiree has been out of the UK for the prescribed period, offshore investments become free of UK tax and are not taxed by the Malaysian tax authority. In fact, several people have calculated that their living expenses within Malaysia are far less then their tax savings, making it, in effect, almost cost free to live there.

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