Most expensive thing to pay in life

What is the most expensive thing to pay in whole life?

A car?

A dream house?

A luxury vacation?

Yes these are things that popped out in my mind when I was asked. Answer is no.

Most expensive thing to pay in whole life is tax. March and April are the month to pay tax in Malaysia. I’m not an accountant or an expert, but I read a book called “Rich Dad Poor Dad” by Robert Kiyosaki. Inside he mentioned we should learn how to pay tax lesser legally, like the rich do.

I am here to share some of the things that I learned in a webinar that must know before starting my journey in real estate investment. If I use my personal name to buy a property at RM500k and sold it at RM600k, I will be charged a tax called “real property gains tax”, usually around 10–30%. Means there will be 10k to 30k goes to tax with that one transaction. However, there is a way to cut down the tax being paid.

During sales process, make a record of all renovation costs, legal fees, real estate agent’s commissions, and advertisement fees. During final purchase, make a record of stamp duties, valuation fees, legal fees, and real estate agent’s commission.

These records will help reducing in tax.

There are two types of companies that one can open up for real estate investment in Malaysia. First one is Investment Holding Company (IHC) and the other one is Property Trading Company (PTC). Attached is the comparison between the two. Look out for special rebates given by government before starting up the company too.

Conclusion, do look for the professional if unfamiliar with the tax system and intend to start investing in real estate.