Property tax in Malaysia: How to calculate and when to pay

Why Property Tax Matters for Homeowners

Owning property in Malaysia comes with recurring costs, and one of the most important is property tax. Whether you own a landed house or a condo unit, you’ll be required to pay quit rent (cukai tanah or parcel rent) and assessment tax (cukai pintu / cukai taksiran).

These taxes help fund local councils, community facilities, and state land management. Knowing how to calculate them and when to pay ensures you avoid penalties and budget your finances correctly.

Types of Property Tax in Malaysia

Quit Rent (Cukai Tanah / Parcel Rent)

• A land tax collected annually by the state land office.
• For landed properties, it’s usually based on land size (per square foot or meter).
• For strata properties (condos, apartments), the older quit rent has been replaced by parcel rent (cukai petak), calculated per unit.

Assessment Tax (Cukai Pintu / Cukai Taksiran)

• Collected by your local council (DBKL, MBPJ, MBSA, etc.).
• Based on Annual Rental Value (ARV) of your property.
• The council applies a percentage rate (usually 2%–7%) on the ARV.

Formula: Assessment Tax=Annual Rental Value×Tax Rate\text{Assessment Tax} = \text{Annual Rental Value} \times \text{Tax Rate}

Example:

• If your property can fetch RM2,000/month rent → ARV = RM24,000/year.
• Local council rate = 4%.
• Assessment tax = RM24,000 × 4% = RM960/year (usually payable in two instalments of RM480).

SEE MORE: Malaysia Debt-to-Income Ratio Calculator

Property Tax Comparison Table

Tax Type	Charged On	Collected By	Basis of Charge	Frequency
Quit Rent	Land ownership (lot/unit)	State Land Office	Land size / parcel unit	Yearly
Assessment Tax	Annual Rental Value (ARV)	Local Council	Rental value × tax rate	Bi-annual

When to Pay Property Tax

• Quit Rent (Cukai Tanah / Parcel Rent):
  Typically due once a year, often between January and May depending on the state.
• Assessment Tax (Cukai Pintu):
  Paid twice a year:
  • First half: Jan–Feb
  • Second half: Jul–Aug

Failing to pay on time can result in late payment penalties, legal action, or even seizure notices.

👉 For comparison of tax affordability, you can also see this property investment ROI guide.

How to Pay Property Tax

• Online portals (e.g., DBKL eServices, state land office websites).
• Banks and post offices.
• Mobile apps provided by local authorities.

Always keep receipts, as proof may be required for future transactions like property sales or refinancing.

FAQs on Property Tax in Malaysia

1. What is the difference between quit rent and assessment tax?
Quit rent is a land tax collected by the state, while assessment tax is based on annual rental value and collected by local councils.

2. How do I calculate my property’s assessment tax?
Multiply the ARV by your council’s rate (usually between 2% and 7%).

3. When do I need to pay property taxes?
Quit rent: once a year. Assessment tax: twice a year (Jan/Feb and Jul/Aug).

4. Can property tax be paid online?
Yes, most councils and state land offices now offer online payment platforms.

5. What happens if I don’t pay?
Late payments can lead to fines, legal action, or seizure of property.

6. Do property tax rates differ across states?
Yes. Each state government and local council sets its own rates.

7. Are foreigners charged differently?
Property taxes are the same for locals and foreigners, but foreign ownership may involve other charges.