Net REIT distribution after the 10 percent withholding tax.
Net distribution
—
Gross distribution
—
Withholding tax
—
Why REIT income lands in your account already taxed
Malaysian real estate investment trusts are popular for one reason above all: they must pay out the bulk of their rental profit to unit holders, so the cash flow is steady and visible. When a listed REIT distributes to you, a resident individual, it does not hand over the full amount. The manager deducts a withholding tax at source and remits it to LHDN, the Inland Revenue Board of Malaysia, before the money reaches your broker account. The rate this calculator applies is 10 percent, and it is treated as a final tax, which is the part most newcomers find surprising. Final means you have nothing further to declare on that distribution and no top up to pay even if your other income sits in a higher bracket. It also means you cannot claw any of it back through reliefs. Confirm the current rate with LHDN, because withholding figures are exactly the sort of number that shifts with a budget.
A RM50,000 holding at a 6 percent yield
The arithmetic here is deliberately simple, which is the point. You give the tool an investment amount and an expected distribution yield, it multiplies the two to get the gross payout, takes 10 percent off as withholding, and shows you what actually arrives. Suppose you hold RM50,000 of a retail or industrial REIT quoting a 6 percent yield. Gross distribution is RM3,000 for the year. The withholding tax is RM300. You receive RM2,700, which is an effective 5.4 percent on your capital after tax. Walk through it row by row.
| Step | Amount |
|---|
The chart in the results panel splits the gross payout into the slice you keep and the slice the manager withholds.
Where REIT tax sits among Malaysia's other rules
Two clarifications save people from double counting. First, this 10 percent withholding has nothing to do with the 2 percent tax on individual dividend income above RM100,000 that began in year of assessment 2025. That newer levy targets ordinary company share dividends, and REIT distributions are a separate stream with their own final withholding. Second, and this trips up investors coming from other markets, Malaysia has no general capital gains tax on shares or REIT units for individuals. If you sell your units at a profit on Bursa Malaysia, that gain is not taxed for a resident individual. The tax that does apply to property style assets is RPGT, real property gains tax, and it falls on the disposal of physical land and buildings, not on listed units. Treat each of these as the calculator's modelling assumption and confirm the live position with LHDN.
Who this is for, and one habit worth keeping
This tool suits anyone comparing REITs against fixed deposits or dividend stocks and wanting a like for like after tax number. A fixed deposit return is quoted before any tax, and a REIT yield is quoted before the 10 percent haircut, so put both on a net basis before you judge them. A practical habit: when a REIT advertises a headline yield, multiply by 0.9 in your head to get the figure that reaches your pocket, then compare. The common mistake is reinvesting the gross figure in a spreadsheet when only the net actually compounds.
Does the 10 percent rate apply to everyone?
No. The 10 percent final withholding modelled here is the rate for resident individuals. Non resident individuals, companies, and certain institutional unit holders face different rates, and some categories are not on a final basis at all. If you invest through a company or are non resident for tax purposes, do not assume the 10 percent number, and check the REIT's own distribution notice, which states the rate it withheld.
Is the withholding tax refundable if I earn very little?
Because it is a final tax, it is generally not refundable even if your total income is below the tax free threshold. This is the trade off for the simplicity of never having to declare the income. A retiree living mostly on REIT distributions effectively pays a flat 10 percent on that stream regardless of how low their other income is, which is something to weigh when you build an income portfolio.