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Budget 2027: what changes for your money

By the KiraDuit editorial team, last reviewed 18 October 2026

Budget 2027 was tabled on 9 October 2026. These are the measures that touch your own money - income tax, reliefs, property, EPF and prices - and what each would mean for you in ringgit.

The headline changes

Individual relief: RM9,000 → RM12,000
Tax on RM70,001 – RM100,000: 19% → 18%
Tax on RM100,001 – RM150,000: 25% → 24%
Tax on RM1,000,001 – RM2,000,000: 28% → 30%
First-home stamp duty: Free to RM500,000, half off the rest to RM750,000
Applies from: YA 2027: 2027 income, filed in 2028

The individual relief has been RM9,000 since 2010. Raising it to RM12,000 takes RM3,000 more of everyone’s income out of tax, so it is worth the most to people in the higher bands - RM750 a year in the 25% band, RM180 in the 6% band.

What it means for your salary

Enter your salary to compare the tax on the same income under today’s rules and under the Budget 2027 proposal.

Tax you would save a year

RM670.00

Budget 2027 · proposed

Annual income: RM96,000.00
Reliefs, YA 2026: − RM13,000.00
Tax, YA 2026: RM6,170.00
Reliefs, YA 2027: − RM16,000.00
Tax, YA 2027 (proposed): RM5,500.00
Saving a year: RM670.00
About a month: RM55.83

Your tax for the year

YA 2026, current rulesRM6,170
YA 2027, Budget 2027 proposalRM5,500

YA 2027 uses the Budget 2027 proposals tabled on 9 October 2026. They are not law until the Finance Bill is passed and gazetted, and the final rules may change. Reliefs are the individual relief (RM9,000 for YA 2026, RM12,000 for YA 2027), mandatory EPF relief (up to RM4,000) and any other reliefs you enter, claimed the same way in both years.

Who gains, and by how much

Tax saved a year under Budget 2027Monthly salary, standard reliefs only (individual and mandatory EPF)

RM3,000 a monthRM0
RM4,000 a monthRM90
RM5,000 a monthRM180
RM6,000 a monthRM330
RM8,000 a monthRM670
RM10,000 a monthRM1,090
RM12,000 a monthRM1,330
RM15,000 a monthRM1,550
RM20,000 a monthRM1,550
RM50,000 a monthRM1,580

Nearly every taxpayer pays less. The saving grows with income - about RM180 a year on RM5,000 a month, RM670 on RM8,000 and RM1,090 on RM10,000 - and levels off at around RM1,550 once chargeable income passes RM150,000 (roughly RM14,000 a month). Below about RM3,000 a month the RM400 rebate already wipes out the tax, so there is nothing left to save. The government’s own estimate is extra disposable income of up to RM1,600 a year for about five million taxpayers.

At the very top the change runs the other way. Someone with RM1.5 million of chargeable income today would pay about RM388,400 now and RM396,700 under the proposal - RM8,300 more - because income between RM1 million and RM2 million moves from 28% to 30%. The break-even point is about RM1.08 million of chargeable income.

Every tax band, before and after

Chargeable income	YA 2026	YA 2027 (proposed)
First RM5,000	0%	0%
RM5,001 – RM20,000	1%	1%
RM20,001 – RM35,000	3%	3%
RM35,001 – RM50,000	6%	6%
RM50,001 – RM70,000	11%	11%
RM70,001 – RM100,000	19%	18%
RM100,001 – RM150,000	25%	24%
RM150,001 – RM400,000	25%	25%
RM400,001 – RM600,000	26%	26%
RM600,001 – RM1,000,000	28%	28%
RM1,000,001 – RM2,000,000	28%	30%
Above RM2,000,000	30%	30%

Changed rates are in bold. The RM400 rebate for chargeable income up to RM35,000 is unchanged. Try your own figures in the income tax calculator by switching it to YA 2027.

Reliefs that widen in YA 2027

Medical (RM10,000 cap) adds postnatal care, up to RM3,000, and absorbs the breastfeeding equipment relief, up to RM1,000.
Parents’ care (RM8,000 cap) covers all types of care expenses, not only medical.
Lifestyle (RM2,500 cap) adds AI software subscriptions, and pet adoption, vaccination and neutering.
Sports (RM1,000 cap) adds sports shoes, up to RM300.
Education fees (RM7,000 cap) covers any field at a recognised institution, raises TVET upskilling to RM3,000 and extends it to your spouse, and allows up to RM2,000 for non-work courses or children’s STEM, arts, language and religious classes.
Domestic tourism (RM1,000) is extended to YA 2027.

The full list, with the YA 2026 rules side by side, is in the tax reliefs guide.

First-home stamp duty, 2027 to 2030

For Malaysian citizens buying a first home with the sale agreement signed from 1 January 2027 to 31 December 2030:

Home priced	Transfer and loan stamp duty
Up to RM500,000	Fully exempt (as in 2026)
RM500,001 to RM750,000	First RM500,000 exempt, 50% off the rest (new)
Above RM750,000	No exemption

On a RM700,000 first home, the transfer duty falls from RM15,000 to RM3,000. Run your own price through the stamp duty calculator and choose the 2027 option.

EPF, gig workers and Lindung 24 Jam

Automatic EPF membership at 18 for Malaysian citizens. Registration alone does not mean contributions, and no start date had been announced at the time of writing.
i-Saraan Plus continues for e-hailing and p-hailing drivers: a 20% government match, capped at RM600 a year and RM6,000 over a lifetime.
SOCSO relief widens to mandatory Lindung Kendiri contributions, plus up to RM150 extra for voluntary Lindung 24 Jam and Lindung Kendiri contributions.
EPF contribution rates are unchanged: 11% from employees, 13% or 12% from employers.

Prices: SST and duty-free

Elderly care service tax falls from 8% to 6% from 1 January 2027, and registered centres are exempt on annual fees of up to RM96,000 per person.
Langkawi and Labuan: the duty-free purchase limit for visitors rises from RM1,000 to RM10,000, after a stay of at least 48 hours.
No new taxes on individuals were announced, and the general service tax rates of 6% and 8% stay as they are. Our SST guide explains what you pay on a bill today.

What happens next

9 October 2026Budget 2027 tabled in Parliament.
October to December 2026Parliament debates the Budget and the Finance Bill that turns the tax measures into law.
Usually by end-DecemberThe Finance Act is gazetted. Details can still change before this point.
1 January 2027YA 2027 begins. Stamp duty, SST and PCB changes start if legislated.
March to May 2028You file your YA 2027 return and claim the new reliefs.

Frequently asked questions

When do the Budget 2027 changes take effect?

The income tax changes are proposed from Year of Assessment 2027 - income earned from 1 January 2027, declared when you file in 2028. The first-home stamp duty exemption covers sale agreements signed from 1 January 2027 to 31 December 2030, and the elderly care service tax cut starts on 1 January 2027. All of them depend on the Finance Bill being passed and gazetted.

Does Budget 2027 change the tax return I file in 2027?

No. The return you file in 2027 covers your 2026 income (YA 2026), which still uses the RM9,000 individual relief and the current bands.

Will my monthly PCB go down in January 2027?

If the Finance Bill is passed and LHDN updates the PCB schedule in time, PCB from January 2027 would reflect the bigger relief and lower bands. With standard reliefs that is roughly RM15 a month on a RM5,000 salary and RM56 a month on RM8,000.

Who pays more tax under Budget 2027?

Only people with chargeable income above about RM1.08 million a year. The rate on income between RM1 million and RM2 million rises from 28% to 30%, which outweighs the bigger relief and the lower middle bands at about that point.

Do I need to claim the RM12,000 individual relief?

No. Like the current RM9,000, the individual relief is given automatically to every resident individual. You do not need receipts for it.

Sources & last reviewed

Checked Oct 2026

Figures on this page were last reviewed on 18 October 2026 against official Malaysian sources for YA 2026. Always confirm the current figure at the source before acting:

Reviewed by the KiraDuit editorial team.

This page summarises proposals announced in the Budget 2027 speech on 9 October 2026, cross-checked against published professional summaries. It is general information, not tax, legal or financial advice. Proposals can change before they are legislated; confirm the final rules with LHDN, KWSP, PERKESO or the Royal Malaysian Customs Department before acting on them.