The Malaysian government has announced a reduction of SST on commercial rental from 8% back to 6%. Discover how this impacts tenants, landlords, shoplot owners, and commercial property investors in 2026.
The Malaysian government has officially announced a reduction in the Sales and Service Tax (SST) on commercial rental, lowering the rate from 8% back to 6%. This move comes as a relief to business operators, tenants, and commercial property owners who have been facing rising operating costs over the past year.
What Changed in Commercial Rental SST?
Previously, eligible commercial rental properties were subjected to an 8% SST, increasing the overall rental burden on tenants. With the latest announcement, the SST rate is now reduced to 6%, bringing rental taxation closer to pre-increase levels.
This adjustment applies to commercial properties such as:
- Shoplots
- Office buildings
- Factories and warehouses
- Commercial units used for business operations
Impact on Commercial Tenants
For tenants, the SST reduction directly lowers monthly rental expenses. While 2% may seem small, over a long-term lease, this translates into meaningful savings—especially for SMEs, retailers, F&B operators, and industrial occupiers.
Lower rental costs improve:
- Business cash flow
- Operating margin sustainability
- Expansion and hiring decisions
What Landlords and Property Owners Should Know
For landlords, this change helps stabilize tenant retention. With reduced tax pressure, tenants are less likely to renegotiate aggressively or exit upon lease renewal.
Key benefits for owners include:
- Improved tenant affordability
- Lower vacancy risk
- Stronger long-term lease sustainability
In many cases, a healthier tenant means more consistent rental income over time.
Positive Signal for Commercial Property Investors
The SST reduction sends a positive signal to the commercial property market. It reflects the government’s intention to support business continuity and economic activity, especially within retail, industrial, and service sectors.
For investors, this enhances:
- Net rental yield stability
- Market demand for shoplots and commercial units
- Overall investment confidence in income-producing assets
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Conclusion
The reduction of SST on commercial rental from 8% to 6% is a timely move that benefits tenants, landlords, and investors alike. As operating costs ease, the commercial property market is expected to regain momentum in leasing activity and investment demand moving into 2026.
If you are reviewing your commercial property strategy—whether leasing, investing, or expanding—this policy shift creates a more supportive environment to move forward.
