Budget 2027 tax proposals: what changes for resident expats, small companies and first-home buyers

At a glance

• Status: announced. Every measure below is written as a proposal (“it is proposed”) in the Ministry of Finance’s Budget 2027 tax measures, published with the budget, which was tabled on 9 October 2026 (Malay Mail, 9 October 2026). We will update this page when the law that puts them into effect is published.
• Proposed start: year of assessment 2027 for the income tax measures; sale and purchase agreements signed from 1 January 2027 to 31 December 2030 for the stamp duty measures.
• Who is concerned among our readers: foreigners who are tax residents in Malaysia, owners of small Malaysian companies, and Malaysian first-home buyers. Foreign buyers of property are not concerned by the stamp duty proposals, which are limited to Malaysian citizens.

Income tax for resident individuals

The proposal changes four bands of the resident individual scale (Appendix 1): 70,001 to 100,000 ringgit of chargeable income would be taxed at 18% instead of 19%; a new band from 100,001 to 150,000 would be taxed at 24% instead of 25%; the 28% band would stop at 1,000,000 instead of 2,000,000; and 30% would apply above 1,000,000 instead of above 2,000,000.

What it means in figures, on the published scale only (before reliefs and rebates):

Chargeable income	Tax on the current scale	Tax on the proposed scale	Difference
RM 100,000	RM 9,400	RM 9,100	− RM 300
RM 150,000	RM 21,900	RM 21,100	− RM 800
RM 1,500,000	RM 388,400	RM 397,600	+ RM 9,200

The individual relief for the taxpayer and dependent relatives would rise from RM 9,000 to RM 12,000 (Appendix 2). These rules concern tax residents; whether a foreigner is resident depends on days spent in Malaysia, which this page does not assess.

Income tax for small and medium companies

Companies with paid-up capital of RM 2.5 million or less and annual sales of RM 50 million or less are taxed at reduced rates. Appendix 11 of the document proposes a review of the income tax rates for these companies. Read the proposed bands and rates in the appendix itself before relying on them.

This concerns foreigners who own a Malaysian Sdn Bhd that meets these conditions; see our company set-up guide.

Shariah-compliant fund management companies

Appendix 13 of the document concerns the income tax exemption for resident companies that manage Shariah-compliant funds. It concerns fund managers, not investors in the funds; read the proposed percentage and years in the appendix itself.

First-home stamp duty, for Malaysian citizens

Today, Malaysian citizens buying their first home for up to RM 500,000 pay no stamp duty on the instrument of transfer, for agreements signed until 31 December 2027. The proposal keeps this and adds homes priced up to RM 750,000: full exemption on the first RM 500,000 of the price and 50% exemption on the part above, for agreements signed from 1 January 2027 to 31 December 2030 (Appendix 16). The measure is limited to Malaysian citizens: foreign buyers remain under the rules in our stamp duty guide.

A separate measure (Appendix 17) concerns the stamp duty exemption for the revival of abandoned housing projects, which exists today; read the proposed terms and dates in the appendix itself.

What is not clear yet

• The final text. These are proposals. The measures, rates and dates can change before the law implementing them is published; this page will say so when it is.
• What we left out. The document contains other measures (tax reliefs, incentives, duties) that do not concern the readers of this site, and measures on borrowing documents, which this site does not cover.

Guides updated with this change

The first-home proposal is shown in the “What changed” box of our Kuala Lumpur new launches ranking. Our stamp duty guide and company set-up guide will be updated when the measures become law.

This page reports official texts. It is not legal or tax advice: for your own situation, ask a tax adviser registered in Malaysia.