Buying property under a company (Sdn Bhd) in Malaysia: who it helps, what it costs, and when it is a mistake
You own one or two rental units in Malaysia and someone has told you to buy the next one through a Sdn Bhd, which is a private company that you own. The company borrows less: banks usually lend a company 60 to 70% of the price, while you as an individual can borrow 90%. Rent the company earns is taxed at the company's rate, 15 to 17% for a small company, instead of your own income tax rate, which can reach 30%. When the company sells, it pays tax on the profit, called RPGT, at 10% even after many years, while a Malaysian citizen selling in their own name pays nothing after five years. The company also costs RM3,000 to RM10,000 a year to run. Rates: the tax office LHDN's 2026 schedules and PropertyGenie's 2026 guide. Buying through a company makes sense for a landlord building up several units. It is a mistake for the home you live in or for a single unit.
Who buys property under a company, and why?
Mostly landlords with three or more units, business owners who already run a Sdn Bhd, and people who want the property separated from their personal name. The reasons that hold up:
- Escaping the third-loan cap. Bank Negara limits an individual's third and subsequent housing loans to 70% of price. A company is a different borrower, so its loans do not count on your personal tally, and yours do not count on its. This is the most common real reason.
- Lower tax on rental profit at scale. Once your salary already puts you in the 24 to 30% personal bracket, net rent inside a company taxed at 15 to 17% keeps more of each ringgit, as long as the money stays in the company to buy the next unit. Take it out as dividends and it is yours tax-free in your hands (Malaysia has a single-tier system), but you paid the company tax first.
- Separation and succession. A company holds the title; you hold the shares. Shares can be passed to children or partners without a land office transfer, and the property is one step removed from personal lawsuits, though not from the bank, because directors sign personal guarantees.
- Multiple owners. Three friends buying together are cleaner as shareholders with a shareholders' agreement than as three names on one title.
What does not hold up: "it is more professional", "my agent said so", or any plan that involves living in the property yourself. A company cannot claim first-time-buyer stamp duty exemptions, cannot use EPF Akaun Sejahtera money, and cannot buy RUMAWIP, PR1MA or Rumah Selangorku units.
What does a company pay that an individual does not?
The same purchase costs on the way in, more expensive borrowing in the middle, a permanent RPGT bill on the way out, and a compliance fee every year in between. Side by side:
| Item | Individual (Malaysian citizen) | Sdn Bhd (Malaysian-owned) |
|---|---|---|
| Loan margin | Up to 90% on first and second home; 70% from the third (Bank Negara rule) | Typically 60 to 70% (PropertyGenie; BNM's 2011 non-individual cap of 60%); underwritten on company accounts, directors give personal guarantees |
| Interest rate | SBR 2.75% + retail spread, about 4.0 to 4.35% in September 2026 | Usually a wider spread; published guides put it 0.5 to 1.0 point above individual rates (PropCashflow) |
| Stamp duty on transfer (MOT) | 1% first RM100,000, 2% to RM500,000, 3% to RM1 million, 4% above; first-time-buyer exemption up to RM500,000 to end-2027 | Same tiers; no first-time-buyer exemption |
| Stamp duty on loan | 0.5% of loan | 0.5% of loan |
| Tax on net rent | Added to your income, progressive 0 to 30% (see rental income tax) | 15% on first RM150,000, 17% on next RM450,000, 24% above, if paid-up capital is RM2.5 million or less and gross income under RM50 million; otherwise 24% flat |
| RPGT on sale (LHDN, 23 June 2026 schedule) | 30% years 1 to 3, 20% year 4, 15% year 5, 0% from year 6; once-in-a-lifetime residence exemption available | 30% years 1 to 3, 20% year 4, 15% year 5, 10% from year 6, forever; no lifetime exemption |
| Yearly running cost | None | Company secretary RM1,000 to 2,500, SSM annual return RM150 plus RM50 for accounts, audit from about RM2,000 unless the company qualifies for audit exemption, tax agent fee; roughly RM3,000 to 10,000 a year for a small holding company (SSAM Group, LBCO, Consistant 2026 fee guides) |
Two things the table cannot show. First, an investment holding company (one whose income is mainly rent) faces tighter rules on what expenses it can deduct than a trading company; your accountant needs to model this before you assume 17%. Second, a company's rental profit only looks cheap while it stays in the company. The moment you need the cash personally, you compare 17% plus the running costs against your personal bracket, and for many salaried landlords with one or two units the personal route is simply cheaper. For what an individual seller pays, see selling costs and RPGT in 2026.
When is buying under a company the wrong move?
Four situations where the answer is no, before you even reach the tax arithmetic:
- You will live in it. A company cannot claim the once-in-a-lifetime RPGT exemption on a private residence, you lose the first-time-buyer stamp duty exemption, and living rent-free in a company's property creates a benefit-in-kind problem for you personally. Buy your home in your own name.
- It is one unit. The yearly running cost eats the tax saving. On a unit netting RM12,000 a year in rent, the difference between 17% company tax and a 24% personal bracket is RM840; the company secretary alone costs more than that.
- You need the 90% loan. On a RM500,000 unit, a 90% loan needs RM50,000 down; a 65% company loan needs RM175,000. If the extra RM125,000 has to come from somewhere, the company has already cost you the deal.
- You plan to move it into your own name later. That transfer is a sale. The company pays RPGT on the gain (10% even after year five), you pay full stamp duty on the transfer at market value, and both sides pay lawyers. Selling the shares instead of the property attracts 0.3% stamp duty on the shares, but Real Property Company rules under the RPGT Act treat the share disposal as a property disposal, so RPGT still applies (PropCashflow's 2026 company-purchase guide).
The honest rule of thumb: if you cannot name a third unit you intend to buy within two years and you are not already in the 24% or 30% personal bracket, buy in your own name and revisit the question when the portfolio is real.
If you do go ahead, how do you set it up properly?
Incorporate before you sign the booking form, not after. The SPA must name the company as buyer; changing the buyer after the SPA is itself a transfer with stamp duty consequences.
- Incorporate the Sdn Bhd through a licensed company secretary (SSM registration is done online through MyCoID). Give it a property-holding object clause and enough paid-up capital to look credible to the bank; RM2 paid-up companies get asked hard questions.
- Talk to two or three banks before you commit, with the company's bank statements, the directors' personal income documents and a simple rental projection. Some banks decline newly incorporated holding companies with no track record; you want to know that before the 10% deposit is on the table.
- Sign the SPA in the company's name, with a board resolution authorising the purchase and the loan. The developer's or seller's lawyer will ask for the company's constitution and Form 24/49 equivalents (now Section 14, 51 and 58 documents under the Companies Act 2016).
- Budget the running cost from day one: secretary, accounts, tax filing, and audit unless the company qualifies for exemption. Missing SSM filings attract compounds that quickly exceed the fees you were saving.
- Keep the rent inside the company until the next purchase, and pay yourself through documented director's fees or dividends, not casual withdrawals that the auditor has to unwind.
If the unit is a new launch, the KPKT checks are the same whoever the buyer is: APDL validity, developer track record, project status. Send us the project name and we run them.
Frequently asked questions
Can a Sdn Bhd buy residential property in Malaysia?
Yes, a Malaysian-owned company can buy any residential property an individual can, except affordable-housing schemes reserved for individuals. A company with foreign shareholders is treated as a foreign buyer for state minimum-price thresholds and consent; see state consent for foreign buyers.
How much can a company borrow for a property?
Typically 60 to 70% of the price (PropertyGenie; Bank Negara's 2011 measure set the non-individual housing-loan cap at 60%). The loan is assessed on the company's accounts and the directors' personal guarantees, usually at a higher spread than a personal home loan.
Is rental income taxed lower under a company?
Only if your personal bracket is above 17% and the profit stays in the company. Qualifying small companies pay 15% on the first RM150,000 and 17% on the next RM450,000 (24% above, or 24% flat if the company does not qualify). A salaried landlord in the 13% or 21% bracket gains little or nothing after running costs.
What RPGT does a company pay?
30% for disposals in years 1 to 3, 20% in year 4, 15% in year 5, and 10% from year 6 onward with no zero band, per LHDN's schedule updated 23 June 2026. Individuals who are citizens pay 0% from year 6.
Can I transfer the property from the company to myself later?
Yes, but it is a disposal: the company pays RPGT on any gain and you pay stamp duty on the market value, plus legal fees on both sides. There is no family-transfer concession between a company and its shareholder.
General information based on LHDN's RPGT and company tax schedules (as summarised by PwC's 2026 Malaysian tax booklet and PropCashflow's 23 June 2026 rate check), Bank Negara Malaysia's loan-to-value measures, and published company-compliance fee guides, as at 24 September 2026. It is not tax, legal or financial advice. Whether a company structure saves you money depends on your personal bracket, the company's expense profile and how long you hold; have a licensed tax agent model your actual numbers before you incorporate.