Quit rent and assessment tax on a shop lot: what are they, who pays?

Every shop lot carries two recurring property charges. Quit rent (cukai tanah) is a yearly charge on the land, collected by the state land office. Assessment tax (cukai taksiran, usually called cukai pintu) is charged by the local council, for example DBKL in Kuala Lumpur or MBPJ and MBSJ in Petaling Jaya and Subang Jaya, and pays for council services. Both are billed to the registered owner. A tenant pays them only if the tenancy agreement clearly says so.

This is general information, not legal or tax advice. Rates and payment schedules are set by each state and council; check your own bills.

For a whole shoplot, both charges usually cover the entire building on one title. For an individual unit in a stratified building, the arrangement can differ, so check your own bills. MCE focuses on ground-floor shops and whole shoplots, where the owner normally receives both bills directly.

By default, the owner. The authorities bill the registered owner, and if the bill is not paid, it is the owner who faces penalties. Whether the cost is passed on to the tenant is purely a matter of the tenancy agreement.

In practice, many shop rents are quoted with the owner paying quit rent, assessment and building insurance out of the rent. Some landlords instead quote a lower rent and ask the tenant to reimburse assessment. Either way works, as long as it is written down. Our guide to tenancy clauses to check before renting a shop covers the outgoings clause.

One point for landlords: according to the Customs rental and leasing services guide summarised by L&Co (5 June 2026), utility charges a landlord recharges to the tenant form part of the taxable rent for service tax, even at cost, once the landlord is registered. Ask your tax agent whether other recharges are treated the same way before you set them up.

Quit rent and assessment are fixed costs that come out of the rent, so they turn gross yield into net yield. Our rental yield calculator has separate boxes for quit rent, assessment, insurance and maintenance for this reason.

A simple illustration: a shop bought for RM 3 million and let at RM 12,000 a month has a gross yield of 4.8%. Every RM 10,000 a year of outgoings lowers the yield by about 0.33 percentage points. PropertyGuru says well-located shops typically yield 5% to 8%; IQI puts gross yields at 5.0% to 7.0% and net yields at 3.0% to 5.0%. The gap between those two IQI ranges is mostly outgoings and vacancy. Read more in what is a good rental yield for a ground-floor shop.

When a shop changes hands, quit rent and assessment for the current period are normally apportioned to the completion date in the sale and purchase agreement: the seller pays up to that date and the buyer from then on. The buyer's lawyer usually asks for the latest paid receipts as part of the transaction. Unpaid arrears are a seller problem, but a careful buyer makes sure they are settled before completion. See legal fees and stamp duty to buy a shop lot for the other purchase costs.

Late payment leads to penalties set by the authority, and continued non-payment can lead to further action against the property. For a landlord, the simple rule is to keep both bills in your own name and pay them yourself, even if the tenant reimburses you. That way, a tenant who stops paying rent cannot also leave you with arrears on the title.

• Update the land office and council records to your name after you buy
• Note the due dates for both bills in your calendar
• Keep receipts; your buyer's lawyer will ask for them when you sell
• State in the tenancy who bears quit rent, assessment and insurance
• If the tenant reimburses any charge, put the amount and timing in writing
• Include both charges when you calculate net yield

For help setting rent and terms for a ground-floor shop or whole shoplot, see our landlords page.

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