Real estate agents’ fees in Malaysia

Real estate agent’s fees are regulated by the Board of Valuers, Appraisers and Estate Agents Malaysia (LLPEH). A maximum commission of up to 3% is paid either by buyer or seller, subject to a minimum fee of RM1,000 per case.

Real Property Gains Tax

Real property gains tax (RGPT) is charged on chargeable gains arising from the disposal of real property as well as shares in the real property companies based on following guidelines:

[*Individual of non-citizen includes all expatriates working in Malaysia and MM2H visa holders]

The 2014 Budget introduced significant changes to the Real Property Gains Tax schedule, aimed largely towards discouraging “flipping” properties in a bid to curb soaring property prices. As such, there are a few exemptions of Real Property Gains Tax:

i. Gains derived from disposal of property between parents and children, husband and wife, grandparents and grandchildren;
ii. Exemption of up to RM10,000 or 10% of the net gains, whichever is higher, is given to an individual.

The chargeable gain is only applicable on net gains, after deducting all related costs such as renovation costs, commission and incidental cost such as legal fees and exemption.

Minimum Foreign Investment Value (MFIV) for Residential Property

Is rental income of foreigners subject to tax in Malaysia?

All rental incomes derived from Malaysia are subject to tax. While a lot of foreigners find Malaysian properties attractive, it is very important to know the tax rate to avoid any unpleasant moment when the Inland Revenue slams you with a hefty tax bill to pay.

Tax on rental income for foreigners charged by Malaysia Inland Revenue differs by the status of resident or non-resident in Malaysia. Resident status is for someone who stayed in Malaysia for more than 182 days (about six months) in a calendar year. Currently, Malaysia Taxation on rental income under the personal name will be as follows:

• Resident status for foreigners: 0 to 25%
• Non-resident status for foreigners: flat at 25%

Malaysia tax rate on rental income for foreigners does not take account of the type of visa pass. There is no special advantage for a holder of MM2H visa compared to the Expatriate Work Visa group.