Can I deduct quit rent, assessment, and maintenance fees from rental income?
Yes. Quit rent (cukai tanah), assessment tax (cukai pintu) and strata maintenance fees are allowable direct deductions against Section 4(d) residential rental income under LHDN Public Ruling 12/2018. Keep the bill, the receipt and the management statement — the deduction follows the paper trail.
Across SPEEDHOME-managed tenancies reviewed in 2025, the deduction that most often failed at tax-agent review was not quit rent or assessment — it was the strata maintenance charge, because landlords paid it but could not produce a management statement that itemised the maintenance-vs-sinking-fund split. Where the bill exists, the deduction has held up; where it does not, the line was disallowed. That single paper-trail rule is the spine of everything below.
The three charges look similar on a landlord's bank statement but sit in different parts of the property record. Quit rent is the land tax billed by the State Land Office against the registered owner. Assessment tax is the local council's rate on the property. Maintenance fees are the strata charge levied by the management corporation or joint management body (JMB) against the parcel owner. All three are recurring, all three attach to ownership rather than tenancy, and all three are the cost of keeping the unit available to rent. That is exactly what LHDN's "wholly and exclusively incurred in producing the rental income" test is built for.
This page covers ordinary long-term residential letting — the passive investment source under Section 4(d) that applies to most Malaysian landlords. If you run an active, service-heavy operation (cleaning, concierge, short-stay management across multiple units), your rental income may instead fall under Section 4(a) as a business source, which is a different deduction analysis. When in doubt, put the facts in writing for a tax agent before you file.
The three charges: what they are and why they deduct
Each charge is a recurring cost of owning and holding the unit available to let, billed to the owner rather than the tenant, which is precisely the relationship LHDN's direct-expense test rewards.
| Charge | Who bills it | Who it is billed to | Why it is allowable under PR 12/2018 |
|---|---|---|---|
| Quit rent (cukai tanah / parcel rent) | State Land Office / Land Registry | The registered proprietor | A statutory land tax on the property producing the rent |
| Assessment tax (cukai pintu / cukai taksiran) | Local council (DBKL, MBPJ, MBPP, etc.) | The property owner | A council rate on the holding; tied to the unit |
| Maintenance / service charge | Management corporation or JMB | The parcel owner | The strata upkeep cost that keeps the unit lettable |
The common thread is ownership. Because all three are levied against the owner of the property, and because the property is the source of the rental income, the expense is connected to earning that income. For a deeper explainer on the land charge itself, read the quit rent (cukai tanah) guide.
Deductibility at a glance
The three fees are deductible for ordinary Section 4(d) residential letting, but the deduction attaches to the expense itself, not to who physically paid the bill — so a tenant reimbursing the landlord and the landlord paying the council are two very different records.
| Fee | Deductible against rental income? | The condition that protects the claim |
|---|---|---|
| Quit rent | Yes | Bill from the Land Office plus payment proof, in the owner's name |
| Assessment tax | Yes | Council bill plus receipt, showing the property and the year |
| Strata maintenance / sinking fund | Yes | Management statement or receipt; apportion if part of the year |
There is no separate "landlord maintenance fee relief" — these deductions sit inside the ordinary direct-expense list alongside loan interest, fire insurance, rent-collection costs and repairs. There is no income-tax relief specific to being a landlord at all; the expenses reduce the rental figure first, then ordinary personal reliefs apply to total income in the normal way for residents.
Who actually paid it changes the record, not the rule
The deduction belongs to the landlord who owned the property during the year the expense was incurred — but if the tenant reimbursed any of these charges, the reimbursement has to be reflected so you do not double-count the benefit.
This is where landlords trip up. A common arrangement is for the tenancy agreement to make the tenant pay the maintenance fee directly to the management office, or to reimburse the landlord for assessment and quit rent. Each arrangement produces a different paper trail.
| Arrangement | What the landlord deducts | What to keep |
|---|---|---|
| Landlord pays all three directly | The full supported amount | Bill + payment proof in owner's name |
| Tenant pays maintenance to the MC | Nothing for maintenance (the landlord did not incur it) | Tenancy clause showing who bears the fee |
| Tenant reimburses landlord for a charge | The expense, with the reimbursement recorded as part of the rental position | Bill, proof of tenant reimbursement, agreement clause |
The safe habit is to record every charge by unit and year, label who paid it, and attach the source document. A year of unlabelled bank transfers is harder to defend than a folder with three council bills and three receipts. For the practical breakdown of who normally bears the upkeep cost, see the landlord vs tenant maintenance fee guide.
What is and is not deductible alongside these fees
Several costs that sit next to quit rent, assessment and maintenance in the property record are not deductible against Section 4(d) rental income — the most common are first-letting expenses, capital improvements, mortgage principal and personal insurance.
LHDN names the first-letting costs specifically — advertising, legal cost to prepare the first rental agreement, stamp duty, and first-tenant agent commission — as initial expenses that create the income source rather than produce income from it. They are not deductible under either Section 4(a) or 4(d). Renovation and upgrades are capital, not repairs, and are treated separately. Mortgage principal repayment is not the same as loan interest; only the interest portion for the property loan is in the sourced deduction list.
| Adjacent cost | Deductible? | The reason |
|---|---|---|
| First-tenancy stamp duty and legal cost | No | Initial expense — creates the source |
| Renovation, refurbishment, betterment | No | Capital, not repair |
| Mortgage principal repayment | No | Only loan interest is in the sourced list |
| First-tenant advertising | No | Initial expense |
| Loan interest on the property | Yes | Direct expense under PR 12/2018 |
| Ordinary repairs to existing state | Yes | Separate from these three fees |
Worked example: net rental income with the three fees
Build the net figure unit by unit, dropping in the three fees alongside the other sourced deductions, then keep the working paper with the bills behind it — the calculation is only as strong as the documents.
This is a record format, not a tax computation for your unit. Your final position depends on your facts, residency, ownership share and current LHDN guidance.
| Item | Example record | RM (illustrative) |
|---|---|---|
| Gross annual rent received | Rent ledger and bank proof | 24,000 |
| Less: quit rent | Land Office bill and payment proof | 100 |
| Less: assessment tax | Council bill and receipt | 1,200 |
| Less: strata maintenance / sinking fund | Management statement or receipt | 1,800 |
| Less: loan interest on the property | Bank interest schedule | 6,000 |
| Less: fire insurance premium | Policy and receipt | 600 |
| Less: ordinary repairs | Invoice, before-after photos, approval message | 500 |
| Net rental income | Working paper for tax-agent review | 13,800 |
The lines above are not a quote for your unit — they are the shape of the worksheet a tax agent expects to see. The RM24,000 gross and 57.5% expense ratio is illustrative of a typical Klang Valley strata unit; the document column is the part that does not move. For the full deduction list with every sourced category, read the rental income deduction guide.
Filing path: CP500 estimate and Borang B return
A landlord who knows the deduction is allowed still has to file it: six CP500 instalments from March, two CP502 revision windows (30 June, 31 October), and a Borang B return with the deduction list above attached.
For an individual landlord with non-employment income, LHDN estimates the year-of-assessment tax via CP500 and you pay in six instalments starting in March. If the estimate looks wrong — because you only started renting mid-year, or you want to claim extra deductions — Form CP502 lets you revise; the first revision is due by 30 June and the second by 31 October of the assessment year. The actual return is then Borang B (M), where the gross rent minus the allowable expenses becomes the rental figure that feeds into the BE form. The full filing walkthrough, including the MyTax log-in path, is in the Borang B step-by-step filing guide. Confirm the current instalment schedule and any 2026 relief changes with a tax agent before you pay.
Non-resident and company landlords: same fees, different rate
The three fees remain deductible for a non-resident landlord — the flat 30% from Year of Assessment 2020 applies to net rental income after allowable expenses, not to gross rent, so a clean expense record still reduces the taxable base even when the rate is flat.
A non-resident individual landlord is taxed at a flat 30% on net Malaysian rental income, with no personal reliefs, rebates or graduated resident bands — but allowable rental expenses are still deducted before that rate applies. A non-resident company is taxed at the standard corporate rate, not the individual 30%. The practical point is the same: quit rent, assessment and maintenance fees lower the net figure that the rate is then applied to, so keeping the bills is worth doing regardless of residency. Confirm the current rate and your residency position with a tax agent before filing.
Does a residential landlord charge SST on rent?
No. Letting residential housing — terrace houses, apartments, condominiums, bungalows and serviced suites — is outside the scope of service tax, so a normal residential landlord does not charge SST on rent, even though the three fees themselves are taxable supplies from the council or management body.
The landlord's invoice side stays simple. Service tax applies to commercial and certain non-residential rental and leasing services, and only once the provider crosses the registration threshold for that activity. If your property is commercial, mixed-use, operated through a company, or part of a larger leasing business, check the current RMCD position with a tax agent before quoting or invoicing.
A note on e-Invoicing for 2026
Individual landlords with annual sales or turnover under RM500,000 are not yet required to issue e-Invoices for residential rent under LHDN's MyInvois rollout; the RM500,000–RM1,000,000 band is brought in from 1 July 2026; where the tenant is a business, the business tenant self-bills the rent.
This is a 2026-specific operational change. Most ordinary individual landlords sit below the RM500,000 threshold and therefore have no e-Invoice duty this year, but it is worth confirming the threshold against the current LHDN MyInvois guideline before year-end, because phase dates are still being updated. The exact phase a landlord falls into depends on the most recent LHDN announcement, not on the rental income alone, so verify with a tax agent if you are close to a band edge.
How SPEEDHOME helps keep the deduction trail
SPEEDHOME does not replace a tax agent, and Zero Deposit is a managed rental-risk system, not a financial guarantee product — but the platform keeps the rental operations record that supports the deduction: tenancy documents, rent collection, repair messages and handover evidence in one workflow.
SPEEDHOME landlord records attach each maintenance request to a dated timeline with the receipt and the resolution note, so the strata management statement, fire insurance schedule and ordinary repair invoices already sit alongside the rent ledger at tax time. The same record that proves a maintenance fee was incurred during the tenancy also supports the repair-versus-improvement call and the move-out condition discussion. Landlords who keep that trail inside the platform do not have to rebuild it from a year of WhatsApp messages at tax season. If you are still preparing the unit, the managed landlord workflow at SPEEDHOME landlord service keeps listing, screening, tenancy documentation, rent collection and repair resolution in one place.
FAQ
Are quit rent and assessment tax deductible against rental income?
Yes. Both are statutory charges on the property that produces the rental income, treated at paragraph 3.1 of the direct-expense list in LHDN's Public Ruling No. 12/2018 for ordinary Section 4(d) letting. Keep the bill and the payment proof.
Is the condo maintenance fee deductible for a landlord?
Yes — but only if the landlord actually paid it. Under the Strata Management Act 2013, the maintenance and sinking-fund charge is levied on the parcel owner (the landlord), so where the landlord is the one billed and pays the management office, the charge is an allowable direct expense. If the tenancy agreement makes the tenant pay the management office directly, the landlord has not incurred the expense and should not claim it.
Can I deduct the sinking fund separately from the maintenance fee?
The sinking fund is part of the strata charge on the parcel owner and is generally treated alongside the maintenance fee as an allowable direct expense. Keep the management statement that itemises both so both line items are on the record.
Can I deduct maintenance fees for months the unit was vacant?
If the property remained available for rent between tenancies, the ongoing owner charges are typically still incurred and supportable; confirm your specific facts with a tax agent before claiming void-period expenses as absolute.
Do I still get these deductions if I am a non-resident landlord?
Yes. The flat 30% for non-resident individuals from YA2020 applies to net rental income after allowable expenses, so quit rent, assessment and maintenance fees still reduce the taxable base. A non-resident company is taxed at the standard corporate rate, not 30%. Confirm your residency position and the current rate with a tax agent.
If my tenant reimburses me for assessment or quit rent, is that extra income?
Yes, the reimbursement is gross rental income in the year received, so record the tenant reimbursement as a gross-up on the rental line and claim the original expense separately on the deduction line. The net result is usually the same, but the paper trail has to show both sides so LHDN does not see a deduction without a corresponding receipt and a receipt without a corresponding income line.
Should I use this guide instead of a tax agent?
No. Use it to organise the right documents and avoid unsafe assumptions. Use a qualified tax agent for your final filing position, especially for non-resident, company, mixed-use or service-heavy letting.