What expenses can be claimed from rental income ?

Rental income is taxed based on the net amount derived at by deducting from the gross rental income from the year ‘allowable expenses’

Allowable expenses include :-

  1. Brokerage fees paid to brokers to secure the tenant
  2. Monthly maintenance fees paid to property management bodies
  3. Quit rent and assessment
  4. Insurance paid for that property
  5. Repais and maintenance on the property
  6. Interest paid to bank for loan taken to finance the property for rent
  7. Legal fees and stamp duties paid for RENEWAL of tenancy agreement. Note that the first fees paid for the first time is not allowed.
  8. Furniture or fittings REPLACED during the year. Please note that the initial purchase of furniture or fittings are not allowed.
Tax planning for rental income :-
  1. lf you have more than 1 properties, pay off your loan for the property that you are not renting first, then only pay off the property that you are staying in.
  2. If you rent out fully furnished properties, you can furnish it with cheap furniture first. Replace them with new or more expensive furniture during the tenancy and claim the replacement cost.


  1. Is the interest portion of a property loan deductible only IF the said property is tenanted ?

  2. Basically yes. However, during the period when the property is not rented out but interests are incurred on loan taken to finance the property while it is available to be rented out, this can also be claimed.

    This is rather subjective as the onus of proof is on the taxpayer to show that the property is waiting to be rented, and it is up to the IRB to accept it.

  3. If I had to pay out for a burglar & fire alarm system (letting out to some students) is this amount deductible?

  4. The initial installation is not claimable. Subsequently if you pay for repair and maintenance or you change to a more updated model, then you can claim as replacement.

  5. Hi, I vacated my property and started engaging a property agent to help me rent it out in Oct 2009. The tenancy will start in Jan 2010. My question is, is the agent fees paid and loan interest expenses incurred during Oct-Dec 2009 deductible from my chargable income for YA2009? I'll then have negative value in my rental income column?

  6. Hi CH,

    The agent fees paid for the rental starting from Jan 2010 should be deducted from the rental income in 2010. Rental losses are not allowed to be set off against other incomes and cannot be carried forward to set off future rental income or other incomes.

    Since you only start to have rental income in 2010, try matching your expenses with the rental income in 2010. Only interests paid in 2010 can be used to set off the rental income in 2010.

  7. Hi,

    Legal fees and stamp duties paid for RENEWAL of tenancy agreement. Note that the first fees paid for the first time is not allowed.

    Question: Does this mean that each time I got a new tenant, the expenses for the first agreement for each new tenant is not allowed as deductible expenses? Or does it only applies to the first tenant when i first starterd rented out the property.


  8. Hi,

    How about the expenses spent below: (Not a business source)
    1. Repainting the building;
    2. Cleaning expenses (farming/ remove rubbish) annually;
    3. Water and electricity bills spent.


  9. 1. Repainting and cleaning - yes but not the first time before the first rental.
    2. Water and electricity - If the rental agreement states that the electricity and water is to be paid by the landlord, then yes.

  10. Hi I have 3 condos and 1 house. 3 are being rented out.
    1)Since I have 4, can I consider it a business income?
    2)If business income, do I need to fill up borang B?
    3)Do i need to register my own company to consider my property income for business income?
    3)Can I consider my tol & petrol spent to go and source for tenants as an expense?

  11. If I have more that 1 property can I offset it's loss againts another property? Or is it for tax each of the properties have to be treated separately? can I put all of them together when calculating my total taxable rental?

  12. There is a Public Ruling No. 4/2011 issued on 10/3/2011 by the IRB detailing what can be constituted as business income from letting of real estate with many examples. You can refer to it by visiting the IRB's website.