Budget 2027: what changes for shop tenants, F&B owners and landlords?

Budget 2027, tabled on 9 Oct 2026, changes your shop's running costs more than its property rules. SME income tax falls by one point, the minimum wage rises to RM2,000 from June 2027 (with an exemption for MSMEs under RM50m in annual sales), and the MediAsas health scheme starts in January 2027. No change to commercial property, RPGT, foreign buyers or service tax on rent was announced in the main measures.

This is general information, not legal or tax advice. Check the final Finance Bill and ask your tax agent.

According to PwC Malaysia's Budget 2027 summary (9 Oct 2026):

• MSME income tax falls by one percentage point: 14% on the first RM150,000 of chargeable income and 16% on RM150,001 to RM600,000.
• Accelerated capital allowance for plant, machinery and ICT is extended to 31 Dec 2030. A tenant fitting out a kitchen, POS system or cold room should ask a tax agent whether the spend qualifies.
• Salary deductions will only be allowed if salaries are paid through a financial institution or an approved cashless channel. MSMEs are excluded from this rule.

The Star (9 Oct 2026) reported that the minimum wage rises from RM1,700 to RM2,000 from June 2027. MSMEs with annual sales below RM50m are exempt from the new rate. There is also a new RM2,500 minimum for semi-skilled workers and graduates.

For most single-outlet cafés, kopitiams and restaurants, sales are far below RM50m, so the exemption matters. Chain brands above that line will carry the higher wage bill in every outlet. Here is the arithmetic for a business that does have to pay the new rate:

These are wages only, before statutory contributions. Check the final rules on who qualifies for the exemption when they are gazetted.

MediAsas starts in January 2027. Per PwC, SMEs with fewer than 75 staff get a RM200 first-year premium subsidy per employee, for up to 50 employees. A shop with 10 staff could receive up to RM2,000 in the first year.

Not in the main measures. PwC's Budget 2027 property section lists no commercial-property, RPGT or foreign-buyer change, and no new SST measure on rental. We have not checked every page of the full MOF appendix, so the safe wording is "no change announced in the main measures". Savills' Paul Khong summed it up as "not a property-led budget" (via IQI, 26 Oct 2026).

That means the rules from earlier still apply:

• Service tax on rental and leasing is 6% from 1 Jan 2026, as covered in service tax on shop rent in 2026.
• Tenancy stamp duty follows the 2025 rates explained in stamp duty for a shop tenancy agreement. Estimate it with the stamp duty calculator.
• RPGT is unchanged. Estimate your exposure with the RPGT calculator.

That is residential only. Budget 2027 gives full stamp duty exemption on first homes up to RM500,000. Homes up to RM750,000 get full exemption on the first RM500,000 and 50% on the balance, for SPAs from 1 Jan 2027 to 31 Dec 2030 (PwC). It does not cover shop lots.

Similarly, Budget 2026 raised stamp duty on transfers of residential homes to non-citizens and foreign companies from 4% to 8% from 1 Jan 2026 (MOF Budget 2026 Tax Measures). Shop lots were not covered by that change either. If you are weighing a home against a shop as an investment, see shop lot vs condo investment in Malaysia.

Not directly. Rent depends on what tenants can earn in a location. Where a chain's wage bill rises, it may bargain harder on rent or choose cheaper rows. Where SME tenants save on tax and get the MediAsas subsidy, they have a little more room. Our tenant page explains how we help you find a ground-floor shop that fits your numbers.

This is general information, not legal or tax advice. Budget measures take effect only when legislated.

Written by Tok Ginstee (REN 37505), CID Realtors Sdn Bhd (E (1) 1855). Updated November 2026.