Housing loan interest tax deduction of RM10,000 per year for 3 years of assessment


Claim your housing loan interest as personal tax deduction/relief up to RM10,000 per year for 3 years of assessment (RM10,000 x 3 YAs = RM30,000 in total), if you buy a house before 31 Dec 2010, or if you already bought a house since 10 March 2009.

Do you meet the following conditions or criteria:  

  1. Malaysia citizen and resident in Malaysia;
  2. Purchase of residential property is limited to one (1) unit;
  3. Sale and Purchase Agreement signed from 10 March 2009 to 31 December 2010; and
  4. That residential property must not be rented out.**

** The condition only said it must not rented out. In this case, property under construction should be qualified.

If you fulfill all the conditions above, congratulation to you! You may claim the housing loan interest incurred as personal tax relief up to RM10,000 per year for 3 consecutive years of assessment from the year of assessment in which the loan interest is first expended. In total, you may claim up to RM30,000 (RM10,000 per year x 3 years of assessment).

For example, say you signed the S&P on 30 September 2010, the first interest cost the bank charged you was, say on 1 November 2010, then the 3 years of assessment is commencing from YA 2010, then YA 2011 and YA 2012. If the interest cost from 1 Nov 2010 to 31 Dec 2010 is only RM3,000, you are only allowed to claim the tax relief on the interest cost incurred, i.e. RM3,000.

If the property is jointly purchased by more than 1 person, all of them are entitled for the relief restricted to maximum of RM10,000.

For example, Person A claims RM2,000, Person B claims RM3,000 and Person C claims RM5,000. Total claims must not exceed RM10,000. The key point is, you must have incurred at least RM10,000 interest cost on the housing loan.

Click here for Press Release from Malaysia Inland Revenue Board.

Legal reference: Income Tax Act, 1967

Section 46B. Deduction for individual on interest expended