Cukai pintu & cukai tanah in a nutshell

CUKAI PINTU (MALAYSIAN ASSESSMENT TAX)

Cukai Pintu is imposed by local councils on property owners to finance the construction and maintenance of public infrastructure, cleaning services and upgrading works in the area under its jurisdiction.

This tax is calculated based on the estimated gross annual rental value of a property (residential properties, business properties e.g. complexes, hotels, etc., industrial properties e.g. factories etc, and agricultural lands as determined by the market (what the property can be reasonably rented out for, multiplied by 12 months), and then multiplied by a set of rates decided by local councils e.g. DBKL. This set of rates is determined by local councils every year to ensure they have the money to run their yearly activities under their jurisdiction.

The rates for commercial properties are generally higher than residential ones. Even among residential properties, the rates for low cost properties are usually lower than those properties in the higher cost bracket.

How Cukai Pintu (Malaysian Property Assessment Tax) is calculated

As an example, if the estimated monthly rental value of a property is RM1,500, the annual value of a property is therefore RM18,000. Multiply this figure by the assessment rate of 6%, the cukai pintu will be RM1,080.

Note: This method of calculating cukai pintu is adopted by all local councils in Peninsular Malaysia except those in Johor.

As the cukai pintu is collected twice a year, the property owner has to pay RM540 at the beginning of the year i.e. before February 28 or 29 (for the period from January to June) and the remaining RM540 before August 31 (for the period from July to December).

CUKAI TANAH (MALAYSIAN QUIT RENT)

Cukai Tanah or Quit Rent is a form of land tax collected by State Governments and is imposed on owners of all alienated land (freehold and leasehold land). The State Government, via Pejabat Tanah & Galian, or Land Office, will assess and collect all quit rent.

Under the National Land Code, it compulsory for owners of all types of properties (land or landed properties) to pay quit rent annually to the relevant Land Office. For most states, the last date for payment is on or before May 31.

The amount of quit rent you need to pay varies from state to state or even within each state. In Kuala Lumpur, the chargeable rate for quit rent is about RM0.035 per square foot per annum (the rate may differ for different localities).

For example, if you own a 2,400 square foot link house in Kuala Lumpur, you will have to pay RM84.00 (2,400 x RM0.035) quit rent every year.

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