--- title: "Buying Property Under Sdn Bhd Company in Malaysia 2026: Tax & Pros" description: "A Sdn Bhd pays 15-17% tax on rental profit vs up to 30% personally, but 10% RPGT after year 5 and no first-home relief. Worked RM example, loans and costs." datePublished: "2026-07-27" dateModified: "2026-07-27" canonical: "https://www.superhomes.my/resources/buying-property-sdn-bhd-company-malaysia" --- # Buying Property Under Sdn Bhd Company in Malaysia 2026: Tax & Pros Yes, a Sdn Bhd can buy property in Malaysia, and it can cut tax on rental profit: a qualifying SME company pays 15% on its first RM150,000 of chargeable income, against personal rates of 25% to 30% for high earners. The trade-offs are 10% RPGT on sales from the sixth year (individuals pay 0%), no first-time buyer reliefs, tougher loans and yearly company costs. For real estate investors acquiring multiple commercial shophouses, industrial factories, or high-value residential properties in Malaysia, a fundamental strategic decision arises: **should you purchase property under your personal name or through a Sendirian Berhad (Sdn Bhd) private limited company?** Buying under your own name is simpler and is the only way to use first-time buyer stamp duty relief and the 0% RPGT rate after five years. Holding property in a Sdn Bhd can lower the tax on rental profit, separate the property from your personal affairs and make it easier to pass a portfolio on, but it adds compliance cost and taxes gains on exit. This guide compares the two on tax, RPGT, bank loans and running costs, with a worked RM example. --- ## At a Glance: Personal Name vs. Sdn Bhd Property Purchase | Comparison Metric | Personal Name Purchase | Sdn Bhd Company Purchase | | :--- | :--- | :--- | | **Max loan margin (residential)** | Up to 90% on the first two home loans; max **70%** from the 3rd housing loan (BNM) | Set by each bank's own credit policy; usually lower than for individuals, with director guarantees | | **Tax on rental profit** | Personal scale, **0% to 30%** | SME rate **15% / 17%**, then 24% (non-SMEs pay 24% flat) | | **Deductible expenses** | Expenses incurred to earn the rent: loan interest, assessment, quit rent, insurance, repairs, management fees | The same, plus company running costs such as secretarial, audit and tax filing fees | | **RPGT on sale in year 6+** | **0%** (citizens and PRs) | **10%** | | **First-time buyer stamp duty relief** | Available to qualifying citizens | Not available | | **Liability** | Owner personally liable | Company liable, but directors usually sign personal guarantees for the loan | | **Passing it on** | Probate or letters of administration, then title transfer | Shares in the company pass instead; the title stays with the company | (Sources: LHDN tax rate pages for individuals and companies, LHDN RPGT rates page, Bank Negara Malaysia's 2010 measure capping the third housing loan at 70% LTV; checked 5 Oct 2026.) --- ## 1. Key Tax Advantages of Sdn Bhd Property Ownership ### 1. Capped Corporate Income Tax Rates If you own rental property personally, the net rent is added to your other income and taxed at your marginal rate. LHDN's resident rates reach 25% on chargeable income from RM100,001 to RM400,000, 28% from RM600,001 to RM2 million and 30% above RM2 million. (Source: LHDN, individual income tax rates; checked 5 Oct 2026.) A small and medium company pays less on the same profit: - **First RM150,000 of chargeable income:** 15% - **RM150,001 to RM600,000:** 17% - **Above RM600,000:** 24% To get the SME rates, the company must have paid-up capital of RM2.5 million or less, gross business income of RM50 million or less, and no more than 20% of its paid-up capital owned by foreign companies or non-citizens. A company that fails any test pays 24% on everything. (Source: LHDN, company tax rates; checked 5 Oct 2026.) One caveat: a company that only holds property and collects rent may be treated as an investment holding company, in which case rent is taxed as non-business income and section 60F of the Income Tax Act 1967 restricts how much of its general running costs it can deduct. Whether your company falls into this depends on how actively it manages the property, so settle it with a tax agent before you set up the structure. ### 2. Expense Tax Deductibility Individual landlords can already deduct expenses incurred to earn the rent, such as loan interest, assessment tax, quit rent, fire insurance, repairs and management fees. A company can deduct the same items plus its own running costs: - Company secretarial, audit and tax agent fees. - Directors' fees and salaries, which are deductible to the company but taxable in the hands of the director who receives them. - Capital allowances on qualifying furniture, fittings and equipment. ### 3. Getting Money Out of the Company Lower company tax is only half the picture: money left in the company is not yours to spend. Profits usually come out as **single-tier dividends**, which are not taxed again in the company. Since year of assessment 2025, however, resident individuals pay 2% on dividend income above RM100,000 a year. (Source: Budget 2025 and the Finance Act 2024, as summarised in Deloitte's Budget 2025 personal tax highlights; checked 5 Oct 2026.) Directors' fees are another route, but they are taxed at personal rates. --- ## 2. Real Property Gains Tax (RPGT) Implications When the property is sold, RPGT applies to the net gain. The rates for a Malaysian company and for a citizen differ only after the fifth year, but that is when most long-term investors sell. | Disposal Timeline | Personal (Malaysian Citizen / PR) | Sdn Bhd Company | | :--- | :--- | :--- | | **Within 3 years** | 30% | 30% | | **In the 4th year** | 20% | 20% | | **In the 5th year** | 15% | 15% | | **6th year and beyond** | **0%** | **10%** | (Source: LHDN, Real Property Gains Tax rates, Parts I and II of Schedule 5 of the RPGT Act 1976; checked 5 Oct 2026.) Individuals also get an exemption of RM10,000 or 10% of the gain, whichever is higher, and a once-in-a-lifetime exemption on a private residence. Companies get neither. > [!NOTE] > **Selling the company instead of the property** > It is often suggested that selling the shares of the holding company avoids RPGT. It usually does not. A company whose real property makes up at least 75% of its total tangible assets is a **real property company (RPC)**, and under paragraph 34A of Schedule 2 of the RPGT Act, a disposal of RPC shares is treated as a disposal of a chargeable asset. An individual selling RPC shares therefore still pays RPGT. Since 1 January 2024, RPC shares sold by a company fall outside RPGT but inside the capital gains tax on unlisted shares instead. The buyer also pays stamp duty on the share transfer. (Source: LHDN, Shares in Real Property Company; checked 5 Oct 2026.) --- ## 3. Bank Financing & Loan Eligibility ### Margin of Financing for Residential Units Bank Negara Malaysia caps an individual's **third and later housing loan at 70% loan-to-value**. That cap applies to individual borrowers. Loans to companies are assessed under each bank's own credit policy instead, so there is no single "company margin": some banks lend 70% to 80% on commercial property to an established company, while residential units bought by a new company often get less, or are declined. For commercial or industrial property, banks look at the company's cash flow, the rental covenant and the property's valuation, and established companies with a track record can negotiate better terms than a newly formed holding company. ### Directors' Personal Guarantees A newly incorporated property-holding company has no audited accounts or trading history, so banks almost always require the directors to sign **personal guarantees**. If the company defaults, the bank can pursue the directors personally. Limited liability protects you from other creditors and claims against the company, but not from the loan you have guaranteed. ### Stamp Duty on the Purchase A Malaysian company pays stamp duty on the memorandum of transfer at the same 1% to 4% sliding scale as a citizen, plus 0.5% on the loan agreement. It cannot use the first-time buyer exemption on homes up to RM500,000, which is only for qualifying individual citizens. A foreign company, or a company treated as foreign, pays the flat foreign rate on residential property: see our guide to [stamp duty for foreign buyers](/resources/stamp-duty-foreign-buyers-malaysia-2026). --- ## 4. Worked Example: RM2 Million Shophouse, Personal vs Sdn Bhd The example below is an illustration with round numbers, not tax advice. It assumes a Malaysian investor who already earns enough that every extra ringgit is taxed at 25%, buys a RM2 million shophouse, nets **RM120,000 a year** of chargeable rental profit after interest and expenses, and sells in year 7 for a **RM600,000 net gain**. It assumes the company qualifies for SME rates and is not caught by section 60F. | Item | Personal name | Sdn Bhd | | :--- | :--- | :--- | | Tax on RM120,000 rental profit per year | 25% = RM30,000 | 15% = RM18,000 | | Tax over 7 years | RM210,000 | RM126,000 | | Company running costs (assumed RM6,000 a year) | Nil | RM42,000 | | RPGT on RM600,000 gain in year 7 | 0% = RM0 | 10% = RM60,000 | | **Total tax and costs over 7 years** | **RM210,000** | **RM228,000** | On these numbers the company structure costs about **RM18,000 more**, even though it saves RM12,000 of tax every year, because the 10% RPGT on exit and the running costs outweigh the savings. The result flips when: - **Rental profit is higher.** At RM250,000 a year of profit, the personal rate on the extra income is still 25%, while the company pays 15% on the first RM150,000 and 17% on the rest, and the saving grows to about RM23,000 a year (RM62,500 personally vs RM39,500 in the company). - **You never plan to sell,** or plan to hold until the portfolio passes to the next generation through the company's shares. - **Your personal marginal rate is 28% to 30%.** And it gets worse for the company if you need the cash personally, because dividends above RM100,000 a year now carry 2% tax and directors' fees are taxed at your personal rate. Run your own numbers with a tax agent before you buy, because the property cannot be moved from your own name into a company later without paying stamp duty again on the transfer and possibly RPGT on the deemed disposal. --- ## 5. When Should You Buy Property Under a Sdn Bhd? ### Buy under Personal Name If: - You are buying your own home, especially your first: only individuals get the first-time buyer stamp duty exemption, the 90% margin on the first two housing loans and the private residence RPGT exemption. - You own one or two rental homes and your net rental profit is modest. - You expect to sell after five years, when individuals pay 0% RPGT. ### Buy under Sdn Bhd Company If: - You are building a portfolio of **commercial shophouses, offices or industrial property** that you intend to hold for the long term. - Your personal marginal tax rate is 25% or higher and the rental profit is large enough to absorb company running costs. - You want the portfolio to pass to family as shares in one company, with a shareholders' agreement setting out who controls it, rather than as separate titles through each owner's estate. If you are still weighing up commercial property itself, start with our [commercial property buying guide](/resources/buy-commercial-property-malaysia-2026), and compare live shoplots and offices in established commercial areas such as [Petaling Jaya](/area/selangor/petaling-jaya) and [Shah Alam](/area/selangor/shah-alam). --- ## Frequently Asked Questions (FAQ) ### Q: Can a Sdn Bhd company buy a residential property in Malaysia? Yes. A Malaysian Sdn Bhd can buy residential property, subject to any state restrictions on the title such as Bumiputera lots. It pays stamp duty at the same sliding scale as an individual but cannot claim first-time buyer relief, and banks lend to companies under their own credit policies, often at lower margins than to individuals and with director guarantees. ### Q: What is the annual cost of keeping a property holding company? Expect to pay every year for a company secretary, an audit (required for most Sdn Bhds under the Companies Act 2016), a tax agent and SSM annual return fees. Fees vary widely by firm and by how many properties and transactions the company has, so get written quotes; the worked example above assumes RM6,000 a year. ### Q: Is it better to buy commercial shophouses under a company or personal name? Experienced investors often use a company for commercial property they plan to hold long term, because rent from shophouses and offices tends to be higher and steadier, which makes the lower SME tax rates worth the running costs. If you are likely to sell after five or six years, personal ownership may leave you better off because of 0% RPGT for individuals. ### Q: Can I transfer my existing property into my Sdn Bhd? Yes, but it is treated as a sale. The company pays stamp duty on the transfer at market value, and you may pay RPGT on the deemed gain if you have held the property for five years or less. The bank must also agree, and usually the loan has to be refinanced in the company's name. ### Q: Does selling the company's shares avoid RPGT? Usually not. If real property makes up at least 75% of the company's total tangible assets, it is a real property company, and an individual selling its shares pays RPGT as if selling the property. Since 1 January 2024, a company selling such shares falls under the capital gains tax on unlisted shares instead. ### Q: Is rental income in a Sdn Bhd taxed at 15%? Only the first RM150,000 of chargeable income, and only if the company qualifies as an SME: paid-up capital of RM2.5 million or less, gross business income of RM50 million or less, and no more than 20% foreign ownership. The next RM450,000 is taxed at 17% and the rest at 24%. A pure investment holding company may also face restricted deductions under section 60F. ### Q: Can a foreigner buy property through a Malaysian Sdn Bhd? A Malaysian company with foreign shareholders is generally treated as a foreign interest for land purposes, so it still needs state consent and must meet the state's minimum price for foreigners. It may also be treated as foreign for stamp duty and loses the SME tax rates if foreign ownership exceeds 20%. See our [guide for foreigners buying property in Malaysia](/resources/foreigners-buying-property-malaysia). --- ## Related Resources - **Commercial Guide:** Read our [Buy Commercial Property Malaysia 2026](/resources/buy-commercial-property-malaysia-2026). - **Tax Breakdown:** Explore [Rental Income Tax Malaysia 2026](/resources/rental-income-tax-malaysia-2026). - **RPGT Rules:** Learn about [RPGT Seller Malaysia 2026](/resources/rpgt-seller-malaysia-2026).