Hello, I am Mr. Chin from CCS and welcome to our video on declaring your rental income to the Inland Revenue Board of Malaysia (IRB) for 2022.
Owning a rental property can be a great investment opportunity, but it’s important to understand the income tax laws that come with it.
In Malaysia, rental income is taxable and must be declared to the IRB. The rental income applies to both residential and commercial properties.
Hence, if you’re a landlord in Malaysia, you must know that it’s essential to declare your rental income to the Inland Revenue Board. In this video, we’ll show you how to report your rental income to stay out of trouble with the law and make sure you’re doing everything you need to as a landlord.
First, you must determine if you’re liable to declare the rental income. If you own a property that generates net rental income, you must report your rental income to the Inland Revenue Board. However, if your yearly gross rental income is insufficient to cover your rental-related expenses, in that case, that means you are suffering a net rental loss; then, you will not be subject to any tax.
The next step is registering as a taxpayer if you haven’t already done so before. You can register your personal income tax file number online.
After that, you need to prepare your statement of rental income, which is a document that shows how much rental income you’ve earned in the year.
Your rental income statement should include information like the period the property was rented, how much rent was collected, and any costs you had to pay because of the rental.
I’m sure you’re wondering what expenses you can deduct from your gross rental income right now.
In general, you can deduct the following expenses from your gross rental income:
You could deduct the Loan Interest from your rental income if you borrowed money to buy the property you’re renting. Please remember that the deductible expense is the interest, not the instalment.
The Assessment and Quit Rent paid to the local authorities can be deducted.
Insurance Premiums paid for fire insurance or burglary can be deducted.
If you engage the services of a property agent to find tenants for your property, the commission paid to the agent can be deducted.
You can deduct the expenses of Advertising the property, like printing brochures and running ads in newspapers or on websites.
Legal Fees incurred to prepare tenancy agreements or any other document related to the property can be deducted.
You can also deduct the money you spend on things like painting, plumbing, electrical repairs, pest control, etc., to keep the rental property in good shape (Repair and Maintenance).
You must keep proper records of all expenses incurred to claim the deductions.
It should be noted that not all expenses qualify for the deduction
To begin, only expenses directly related to the rental property are deductible. Personal expenses such as phone bills, travel, and so on are not deductible.
Second, you cannot deduct costs related to the property when it is not rented out.
Third, the cost of obtaining the first tenant, also known as initial expenses, such as advertising costs, legal fees to prepare the rental agreement, and property agent commission, is not deductible.
Finally
Once you’ve prepared your rental income statement, you can file your tax return with IRB.
You only need to declare the net rental income in your tax return.
In conclusion, declaring your rental income to the Inland Revenue Board is an essential step that every landlord in Malaysia must take.
By following the steps in this video, you can ensure you meet your landlord’s obligations and stay out of trouble with the law.
If you have any questions or need further assistance, please contact the Inland Revenue Board or consult a tax professional.
Thank you for watching, and we hope you found this video helpful.
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