To safeguard the interests of both the tenant and landlord, it's best to have a Tenancy Agreement in place. Here's how much it'll cost to have one drawn up for you, and stamped by LHDN to legalise it.
Are you a potential tenant who’s on the lookout for a new place to call ‘home’? Or perhaps, you’ve just become a proud homeowner, and would like to earn some passive income?
By renting out your property (even if it’s just a room or two instead of the whole place), it’ll allow you to get some money to help you with the monthly instalments. It’ll be up to you if you want to go for
short- or long-term rentals.
As a potential tenant or landlord, you’re going to have to be aware of the fact that there’s currently no laws in place to protect either one of you, but you can take precautionary measures by drawing up
a Tenancy Agreement.
This is a piece of legal document that clearly outlines the duties and responsibilities of both parties, as long as the tenant is still living within the premises.
It also contains
other relevant terms and conditions, like the description of the unit/room being rented out, the furniture and fittings contained within (if any), as well as other utility bills, to name just a few.
You also need to make sure you know about two additional fees that come with the renting process – the
stamp duty fees and
administration charges for a Tenancy Agreement!
Stamp Duty Fees
Duration of tenancy
|
Amount
|
1 year or less
|
RM1
|
> 1 year to 3 years
|
RM2
|
> 3 years onwards
|
RM4
|
*If you’d like an additional copy of the tenancy agreement to be stamped as well, the stamping fee is set at a flat rate of RM10.
This is the formula you’ll need to refer to:
Step 1:
Determine the total amount of your annual rental. For example, you want to rent out your unit at RM1,200 per month. Your annual rental would be
RM14,400 (RM1,200 per month x 12 months).
Step 2:
Calculate the taxable rental. As the first RM2,400 is exempted from stamp duty, the taxable rental amount would be
RM12,000 (RM14,400 – RM2,400).
Step 3:
The stamp duty would be charged according to the duration of the tenancy (refer to table above). We’ll give an example for each one, using the same assumption of renting out your whole unit at RM1,200 per month:
[(1200 x 12) – 2400]
--------------------------- x RM1 = RM48
250
*Additional copy of stamped Tenancy Agreement: RM48 + RM10 = RM58 (this total amount is for 2 copies of the Tenancy Agreement, one for the landlord and one for the tenant, both of which need to be stamped by LHDN in order to make it legal and admissible in court.)
[(1200 x 12) – 2400]
--------------------------- x RM2 = RM96
250
*Additional copy of stamped Tenancy Agreement: RM96 + RM10 = RM106
[(1200 x 12) – 2400]
--------------------------- x RM4 = RM192
250
*Additional copy of stamped Tenancy Agreement: RM192 + RM10 = RM202
One very important thing to remember about the calculation for stamping fee is: If the amount you get after you deduct the exemption of RM2,400 from the rental per annum is NOT a multiple of 250,
you need to round that figure up to the nearest (and highest) 250.
Let’s take a look a sample scenario to explain it, by assuming that you want to rent out your room at RM250 per month, for a period of a year:
[(250 x 12) – 2400] = RM600
As RM600 is not a multiple of 250, you need to round that up to the nearest (highest) 250, which is RM750. Thus, your stamping fee would be: (RM750/250) x RM1 = RM3
Administration Charges
Rental per month
|
Amount
|
< RM1,000
|
RM100
|
> RM1,000 to RM1,999
|
RM150
|
> RM2,000 to RM3,000
|
RM200
|
> RM3,000 to RM4,000
|
RM250
|
> RM4,000
|
RM300
|
*The implementation of the fee's exact amount is still, at the end of the day, up to the discretion of the landlord.
The administration fee is a little more straightforward (thankfully!), as it is a one-time charge based on the monthly rental amount.
Using the earlier example of your whole unit being rented out at RM1,200 per month, since that figure is more than RM1,000, the administration fee would be charged at RM150.
Therefore, your grand total of both the stamp duty fee and administration charge would be RM208 (RM58 + RM150).
Did you know that rental income has been exempted from income tax?
This move was first introduced by the government during the tabling of Budget 2018, in order to encourage more Malaysians to rent out their properties to those who are really in need of a roof over their heads.
This means that your rental income would be given a tax exemption of 50%, so long as you’re a Malaysian citizen who lives in, well… Malaysia. There are other requirements involved, of course, which are:
- The property is only for residential purposes.
- There is a legal document (Tenancy Agreement) between the landlord and tenant.
- Monthly rental received from each property is less than RM2,000. There is no limit to the amount of residential properties a landlord can have at this threshold.
- The Tenancy Agreement must be stamped by LHDN and put into effect by or after January 2018. There is a maximum period of three (3) consecutive years of evaluation from 2018 to 2020.
Source:
https://www.propertyguru.com.my/Whether you are buying, selling, or just plain interested in real estate, connect with Penang Property Angel today for professional assistance.