KUALA LUMPUR, Jan 23 (Bernama) -- Bursa Malaysia’s benchmark index recouped earlier losses to settle higher, maintaining a more than six-year high, buoyed by continued buying interest in technology stocks, while the strengthening of the ringgit against the US dollar further lifted investor sentiment. At 2.27 pm today, the local currency strengthened to 3.9992 versus the greenback, its strongest level in more than seven years. It was last seen at this level on June 18, 2018, at 3.9960/9990. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.85 points or 0.17 per cent to 1,719.99 from yesterday’s close of 1,717.14. The index surpassed its previous peak of 1,719.00 recorded on Feb 26, 2019. The barometer index opened 1.30 points lower at 1,715.84 and moved between an intraday low of 1,711.89 in early trade and a high of 1,723.41 in late afternoon before slipping slightly toward the close. However, market breadth was negative with decl...
Malaysia’s real estate investment trust (REIT) sector may avoid a tax shock, with Kenanga Investment Bank expecting the 10% withholding tax on REIT dividends to be fully renewed, despite the concession expiring at end-2025.
Why Renewal Looks Likely
Kenanga believes the government has little incentive to change the current structure, given the limited fiscal benefit.
Annual REIT net earnings: ~RM2.8bn
Contribution to 2026 estimated tax revenue: <0.2%
Any policy shift would offer immaterial fiscal upside, but meaningful downside to the sector
Key point: The cost to REIT valuations outweighs the tax gain to the government.
What’s at Stake for Investors
The concessionary 10% withholding tax, in place since 2016 and renewed annually, has been a key pillar supporting REIT yields.
Investors already face an additional 2% dividend tax on income above RM100,000
Effective dividend tax for large investors: ~12%
If the concession lapses, dividends could be taxed at personal rates up to 24%
Kenanga estimates that REIT valuations could fall by up to 14% if the concession is removed.
Industry Engagement Underway
Kenanga noted that the Malaysian REIT Association is actively engaging regulators to secure a continuation of the concession.
The existing framework also partially mirrors the structure of Singapore REITs, helping Malaysia remain competitive for regional capital flows.
Why It Matters for the Property Ecosystem
REITs play a critical role in Malaysia’s commercial real estate value chain, spanning:
Property development
Asset operations
Asset securitisation
Kenanga warned that removing the concession would reduce Malaysia REITs’ attractiveness to both local and foreign investors, potentially dampening long-term sector growth.
Bottom Line
High likelihood of full renewal of the 10% withholding tax
Limited fiscal upside, significant valuation risk if removed
Yield stability remains intact, pending official confirmation
For income-focused investors, this would be a welcome policy continuity, preserving Malaysia REITs’ appeal in a volatile market environment.
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