Budget 2027 was tabled on 9 October 2026, and most of the property headlines were about first homes. For factories, warehouses and industrial land, the short answer is this: there is no new stamp duty relief for commercial or industrial purchases, no change to RPGT, and no change to foreign-buyer rules. What does matter is the cost side of running an industrial property — wages, machinery tax, capital allowances — plus a few road and flood projects that touch the Nilai, Sepang and Klang Valley corridors. Here is what changed, what didn't, and what to check before you buy, rent or sell.
What Budget 2027 did not change for industrial property
Start here, because buyers often assume the first-home stamp duty news applies to them. It does not.
Stamp duty on factory and warehouse purchases
The new stamp duty exemption covers a Malaysian citizen's first residential home (full exemption up to RM500,000, and 50% on the balance up to RM750,000, for agreements from 1 January 2027 to 31 December 2030). A factory, warehouse or piece of industrial land bought by you or your company still pays the normal scale of stamp duty on the transfer and the loan agreement. Budget your purchase costs the same way you did in 2026.
RPGT on selling a factory
Real Property Gains Tax was not mentioned in the Budget speech. The current LHDN rates still apply:
|
Holding period |
Company |
Citizen / PR individual |
|---|---|---|
|
Up to 3 years |
30% |
30% |
|
4th year |
20% |
20% |
|
5th year |
15% |
15% |
|
6th year onward |
10% |
0% |
A worked example: a company sells a factory in its 7th year of ownership with a chargeable gain of RM2,000,000. RPGT at 10% is RM200,000. The same gain made by a Malaysian individual holding the property in their own name would be taxed at 0% after the 5th year. That difference is one reason holding structure should be decided before you buy, not when you sell.
Foreign buyers
There was nothing new on foreign ownership of industrial property. State consent, minimum price thresholds and land-office conditions remain state-level matters, and they differ between Selangor, Negeri Sembilan and Melaka. Rules and thresholds change — confirm with the relevant authority or a lawyer before committing.
What changed: costs that hit factory and warehouse operators
These measures don't change property prices directly. They change how much it costs to run a factory, which affects how much space a business can justify and what rent it can afford.
Minimum wage rises to RM2,000 from June 2027
The minimum wage goes from RM1,700 to RM2,000 a month from June 2027. MSMEs with annual sales below RM50 million are exempt, to give them time to adjust.
For a larger operator that isn't exempt, the numbers are simple. A warehouse with 40 workers on RM1,700 pays an extra RM300 x 40 = RM12,000 a month, or RM144,000 a year, before EPF and SOCSO. That is when operators start asking whether a building with more loading bays or a higher ceiling would cut headcount. Expect more demand for buildings that suit racking and automation.
Sales tax refund on machinery
Manufacturers will be able to reclaim sales tax on machinery, spare parts and equipment, including items bought from local traders and distributors rather than directly from the maker. If you are fitting out a newly bought or rented factory, keep supplier invoices clean and itemised so the refund claim is straightforward once the procedures are published.
Capital allowances
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☐ Small value assets: the per-asset limit rises from RM2,000 to RM3,000. For non-MSMEs, the yearly cap rises from RM20,000 to RM30,000, from Year of Assessment 2027.
-
☐ Accelerated Capital Allowance for locally produced plant and machinery, ICT equipment and software is extended to 31 December 2030.
-
☐ The Reinvestment Allowance is under review, with a focus on eligibility and how it is delivered. If your expansion plan depends on it, get tax advice before signing for a bigger factory.
Green investment incentives
Green incentives run to 31 December 2030, but advisers report a narrower qualifying list. If a rooftop solar or green-building allowance is part of your numbers, check it still qualifies.
Service tax on industrial rent is now 6%
This one isn't a Budget 2027 item, but it is the tax change landlords and tenants ask about most. Rental and leasing of commercial and industrial property became taxable on 1 July 2025 at 8%. The rate was cut to 6%, deemed effective from 1 January 2026. Landlords only register once their taxable rental income passes RM1 million in 12 months, and some exemptions apply.
Worked example: rent of RM45,000 a month
|
Item |
Amount |
|---|---|
|
Monthly rent |
RM45,000 |
|
Service tax at 6% |
RM2,700 |
|
Annual service tax |
RM32,400 |
Whether you pay this depends on whether your landlord is registered and whether your business qualifies for an exemption. Make sure the tenancy agreement states clearly whether the rent is inclusive or exclusive of service tax. Our factory tenancy agreement checklist covers the clause to look for.
Area impact: Nilai, Sepang and the Klang Valley
Nilai and the Sepang–Enstek corridor
The Budget names Malaysia Vision Valley 2.0 as a driver for Negeri Sembilan, with a Nilai–Labu road to Bandar Enstek, an upgrade of Jalan Pajam–Nilai–Salak and the Klang Valley Double Track Phase 2 (KVDT2). Road works like these improve truck access between Nilai, KLIA and the southern Klang Valley, but only once they are built. Price a property on today's access, and treat the roads as an upside, not a reason to overpay.
Browse what's available in Nilai and Sepang.
Shah Alam, Klang and flood risk
The Federal and Selangor governments have agreed on steps to tackle Klang Valley flash floods, starting with RM100 million for retention ponds and river maintenance. That is welcome, but it does not change the flood history of a particular lot. Before shortlisting anything in Shah Alam or Klang, check:
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☐ The platform level of the building against the road and the nearest drain
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☐ Whether the area flooded in December 2021, and how high the water rose
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☐ Where switchrooms, transformers and stock are stored, and whether they sit at ground level
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☐ Whether your insurer will cover flood for that specific address, and at what premium
Power supply
TNB will invest RM15 billion to strengthen the national grid. That helps overall supply, but it doesn't give any single factory more amps. Supply to a specific lot still depends on the local substation and the upgrade process, so check it lot by lot. Our guide to factory power supply, amps and kVA explains what to ask.
What to do now
-
Buying: budget stamp duty and legal fees at normal rates. Decide on company or personal ownership with your accountant, because the RPGT gap after the 5th year is real.
-
Renting: get the service tax position in writing before you sign, and factor 6% into your budget if your landlord is registered.
-
Expanding: if your plan depends on the Reinvestment Allowance or green incentives, wait for the final rules or get tax advice first.
-
Selling or leasing out: operators facing higher wages are looking for efficient buildings. If yours has good loading access, high ceilings and adequate power, put those details first in your listing.
Frequently asked questions
Does the Budget 2027 stamp duty exemption apply to factories?
No. The exemption is for a Malaysian citizen's first residential home. Factory, warehouse and industrial land purchases pay normal stamp duty.
Did Budget 2027 change RPGT on industrial property?
No. RPGT was not mentioned in the Budget speech. LHDN's current rates still apply, including 10% for companies and 0% for Malaysian individuals on disposals from the 6th year.
Do I pay service tax on factory rent?
Possibly. Service tax of 6% applies to commercial and industrial rental if your landlord is registered (taxable rental income above RM1 million a year), unless an exemption applies to your business. Check the tenancy agreement and ask for the landlord's registration status.
Does the minimum wage increase apply to my business?
The new RM2,000 rate applies from June 2027, but MSMEs with annual sales below RM50 million are exempt. Confirm your status with your accountant or the Ministry of Human Resources.
Talk to Warren directly
Budget changes are one input. The bigger decision is still whether a specific building has the power, loading access and zoning your operation needs. Warren Lim (REN 07753, IQI Realty) has spent over 20 years working only on industrial, commercial and land deals across the Klang Valley, Nilai, Sepang and Melaka. You deal with him directly, and he checks power supply, loading access and zoning before a property makes your shortlist. He can also match you with off-market stock and upcoming units that haven't been listed yet.
Browse factories for sale, warehouses for rent or industrial land for sale, or read the FAQ. Then WhatsApp Warren with your area, size, power and budget requirements.
