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What are the Tax Consequences for Malaysians living abroad and renting out properties in Malaysia?

Updated: Mar 12

Rental income earned in Malaysia is subject to tax under the Malaysian Income Tax Act 1967. The tax rate applicable to rental income depends on the tax residency status of the individual earning the rental income.

  1. Malaysian tax residents: The rental income is included in the individual's total income and taxed at the applicable tax rate based on their tax bracket (is taxed on a progressive tax rate from 0% to 30%).

  2. Non-resident individuals: Non-resident individuals who earn rental income in Malaysia are subject to a flat tax rate of 30% on the gross rental income earned.

Tax residents are eligible for tax relief. non-tax residents, on the other hand, do not qualify for tax relief.

Taxation of Rental Income for Malaysian Citizens Living Overseas