50% Tax Exemption for Rental Income Malaysia 2018

All rental income received are taxable under personal income under Seksyen 4(d) Akta Cukai Pendapatan 1967 at a rate of 0 -28%

In Budget 2018 Malaysia, it was announced that home owners are encouraged to rent out their residential at appropriate rental rate. This is done by granting 50% tax exemption on the rental income received with the following terms apply:

1) Rental income received by a Malaysian resident individual does not exceed RM 2000 per month for EACH residence.

This is not limited to only one residential property. If one has a few property rented out, each house income is entitle for tax exemption provided that the rent is below RM 2000 per month. Eg, if the house rental is RM 3000 per month, this house will not entitle.

2) Residential houses must be rented under a legal rental agreement between the owner and the tenant;

A written rental agreement is important to claim this exemption, assuming that the lease agreement should be subject to stamping tax to be eligible. Kindly refer to your legal advisor.

3) Tax exemption is given for a maximum of 3 consecutive years from 2018 to 2020.

*This is referenced from 
http://lampiran1.hasil.gov.my/pdf/pdfam/KU04_2011.pdf
http://lampiran2.hasil.gov.my/pdf/pdfam/lampiran_langkah_cukai.pdf