Buying Property Under a Company Name in Malaysia: Is It Worth It?

Buying Property Under a Company Name in Malaysia, Is It Worth It?

When investing in property in Malaysia, one question often comes up: Should you buy in your personal name or through a company (such as a Sdn Bhd)? Buying property under a company name can be tempting, it promises certain tax advantages, easier succession planning, and liability protection. But it also comes with additional costs, stricter financing and often less favourable tax treatment in some areas.

What does it mean to buy property under a company?

Instead of purchasing a property in your personal capacity, you set up or use an existing company (commonly a private limited company, Sdn Bhd) which will act as the legal owner of the property. The company holds title (via the Sale & Purchase Agreement, transfer of ownership) and is responsible for the property rights, liabilities and tax obligations.

This model is often used by property investors, joint‐venture partners, or business owners who wish to separate property ownership from their personal holdings.

Why some investors choose this route (Pros)

Here are some of the advantages of buying property under a company name in Malaysia:

Limited liability & separate legal entity

Since the company is independent from the shareholders personally, any liability (e.g., debts, maintenance claims) attaches to the company, not directly to you as an individual (within normal limits). This can provide a layer of protection.

Potential tax deductibility & corporate tax rate

• For example, a company can claim certain expenses (mortgage interest, maintenance, operating expenses) against its rental income (depending on how the business is structured). Some articles note that the corporate tax rate (for companies under certain thresholds) may be lower than the higher personal income tax rate.
• For example: an article states: “If a company’s annual profit is below RM500,000, corporate tax is set at a flat rate of 20%” (though you must always check current thresholds)

Estate planning / share transfer easier

Owning property via a company means you can pass on shares in the company to beneficiaries rather than transferring the property itself. That can simplify succession matters and perhaps reduce delays around probate.

Joint‐ownership & group investment friendly

If you and partners (business associates, friends) intend to co-invest in property, forming a company can provide a clearer structure for ownership shares, management responsibilities, exit strategy, etc.

What are The Cons of Buying Property Under a Company Name

Before you rush in, here are the downsides of using a company to buy property:

Higher setup & maintenance costs

Incorporating a company, maintaining statutory compliance (secretarial, audit, tax filings) adds cost and complexity. One article noted that “extra recurring fee of RM4,000 for Investment Holding Company (IHC)” is not unusual.

Financing constraints / loan-to-value (LTV) lower

Many banks treat company borrowers more cautiously. For example: company owners may get a lower borrowing margin (e.g., 70 % versus 90 % for individuals) and higher interest. 

Less favourable tax treatment in some cases

While companies have advantages, there are significant disadvantages too:

• For example, when a company disposes of a property, the Real Property Gains Tax (RPGT) rate remains higher and does not enjoy certain exemptions available to individuals. 
• Dividend tax issues: If the company earns rental income and distributes profits to shareholders, you may end up with “double taxation” (company tax + dividend) in certain scenarios.

Potential for less flexible use

If your intention is to live in the property (owner‐occupier), buying under a company often makes less sense. Most of the advantages apply when the property is held as investment/rental.

Compliance and audit risk

A company making property investment becomes more visible to tax authorities. More stringent reporting and tax audit risk may apply.

Tax & Legal Considerations of Buying Property Under a Company Name

Here are some of the key rules you must know when buying property through a company in Malaysia.

Corporate Tax on Rental Income

If the company receives rental income, the profits are subject to corporate tax. For non‐SME investment holding companies, the tax rate may be about 24% (depending on year of assessment and status). In contrast, individuals’ rental income is taxed at progressive personal tax rates when considered part of their income.

RPGT (Real Property Gains Tax) on Disposal

When the company sells the property, gains may trigger RPGT. The current Malaysian RPGT schedule shows:

• For companies: within 3 years → 30 %; in 4th year → 20 %; 5th year → 15 %; 6th year and after → 10 %. 
• For individuals (citizen / permanent resident) after 5 years, tax may drop to 0%. 

Thus, holding through a company can lead to higher tax on disposal than individual ownership in some cases.

Stamp Duty & Other Costs

There might be higher or additional costs for transfers, even differences in how the transaction is treated when via a corporate entity versus individual.

Foreign Ownership & “Company” Loop-holes

For foreigners who wish to own Malaysian property but face minimum purchase thresholds or restrictions, one route has been to use a locally‐incorporated company. However, this is heavily regulated and banks/do regulators look closely.

Use of Property & Business Classification

If the company treats property ownership as a business (renting out, property development, etc.), then the tax treatment and deductibility of expenses may differ. Review and structure carefully.

When It Makes Sense to Buy Property Under a Company Name in Malaysia

Buying property under a company name in Malaysia can be a smart move for serious investors, especially if your goal is to build a property portfolio or generate rental income rather than live in the property. You might consider using a company ownership structure if:

• You’re investing in property for rental or portfolio purposes, not for personal residence. This setup is ideal for long-term property investors in Malaysia who want to expand holdings systematically.
• You plan to hold multiple properties under one legal entity, which can simplify management and accounting.
• You have business partners or joint investors, and need a clear ownership structure to divide shares and responsibilities.
• Estate planning or ownership transfer is part of your goal as transferring company shares is much easier than transferring individual property titles.
• You’ve accounted for the extra costs such as company registration, auditing, and corporate tax filing, and are comfortable with these as part of your investment strategy in Malaysia.

When It Might Not Be the Best Idea to Buy Property Under a Company

On the other hand, buying property under a company name in Malaysia might not be suitable if your situation fits one of the following:

• The property is for personal use such as your main home or family residence.
• You’re a first-time homebuyer who prefers a simple process without complex paperwork or compliance.
• You want to minimise upfront costs, since buying as an individual offers easier loan approval and often higher financing margins.
• You plan to sell the property later and want to enjoy individual RPGT (Real Property Gains Tax) relief or zero RPGT after 5 years benefits that are not available to companies.
• You prefer to avoid ongoing compliance costs, including annual audits, company secretarial fees, and corporate tax obligations.

Checklist: What to Consider Before Buying Property Under a Company Name

Before you decide whether to buy property under a company name in Malaysia or keep it under your personal name, review this checklist carefully:

Holding Period

• How long do you plan to hold the property?
• Compare RPGT rates for companies vs individuals if you anticipate selling within 5 years.

Financing Terms

• Check the loan margin, interest rate, and bank’s policy on lending to companies.
• Banks in Malaysia typically offer lower loan-to-value (LTV) ratios for company purchases.

Ongoing Costs

• Calculate all recurring expenses such as audit fees, secretarial charges, company tax filing costs, and stamp duty differences.

Tax Impact

• Estimate your rental income, deductible expenses, and applicable corporate tax rate.
• Consider dividend tax if you plan to withdraw profits from the company.

Exit Strategy

• Will you sell the property directly or transfer shares in the company?
• Evaluate the RPGT implications for both scenarios under Malaysian law.

Personal Goals Alignment

• Define your objective owner-occupied home or investment property?
• Consider estate planning, joint-ownership flexibility, and portfolio expansion potential.

Professional Guidance

• Consult a property lawyer, company secretary, and tax advisor experienced in Malaysian property and corporate taxation before finalising your decision.

Which Route Is Right for You?

When it comes to buying property under a company name in Malaysia, there’s no one-size-fits-all answer. The best route depends on your goals, tax planning strategy, and how you intend to use the property.

For first-time homebuyers or owner-occupiers, buying property under your personal name is generally the simplest and most cost-effective option. It offers lower upfront costs, better loan terms, and access to RPGT (Real Property Gains Tax) exemptions that aren’t available to companies.

However, for seasoned investors, joint owners, or those managing multiple investment properties, purchasing under a company structure can make more sense. It provides clearer ownership distribution, potential tax planning flexibility, and an easier estate management process but it also comes with higher compliance costs, annual audits, and less favourable disposal tax rates in certain cases.

Ownership Type	Key Advantages	Key Drawbacks	Best For
Personal Name	Simpler process, lower cost, easier loan approval, RPGT relief	Limited flexibility for multiple owners, less suited for business investment	First-time buyers, homeowners, individuals buying for personal use
Company Name	Structured ownership, potential tax planning benefits, easier share transfer	Higher cost, compliance burden, stricter financing, higher RPGT	Property investors, joint ventures, portfolio holders

 

If you’re seriously considering buying property in Malaysia under a company name, take your time. Run the numbers: up-front costs, tax implications, financing, exit strategy. Most importantly, seek professional advice tailored to your specific circumstances. Structure matters and what looks good on paper may not always deliver once you factor in real-world costs and tax rules.

Remember: owning a property is more than just the purchase price. Ownership structure, tax planning and future flexibility matter just as much. Choose the path that fits your goals, risk appetite and timeline.