Tax reliefs for the elderly, disabled, composters, and more

BUDGET 2025 | The Budget 2025 proposal tabled by Finance Minister Anwar Ibrahim in Parliament today covered a slew of tax reliefs and incentives for various groups.

This includes people with disabilities and the elderly including their caregivers, first-time homeowners, and even people looking to compost their food waste at home.

These tax measures were detailed in the appendices of Anwar’s budget speech.

Among others, individual income tax relief on medical treatment has been expanded to include a broader range of expenses.

The existing tax relief of up to RM1,000 for medical or mental health checks and Covid-19 tests will be expanded to include self-testing medical devices, such as glucometers, pulse oximeters, blood pressure monitors, and thermometers.

It would cover other types of medical self-test kits in addition to Covid-19, such as influenza self-test kits.

The tax relief is also applicable for disease detection examinations at clinics and hospitals, such as blood tests, ultrasound procedures, mammograms, and pap smears.

These tax reliefs are applicable beginning assessment year 2025.

For breast cancer survivors, mastectomy bras will be exempted from sales tax for applications received by the Finance Ministry from Nov 1 this year until Dec 31, 2027.

To encourage elderly care, Anwar proposed that existing individual tax reliefs for sports equipment for taxpayers and their children be extended to their parents as well.

Tax relief for parents’ medical expenses is expanded to include vaccination, while tax relief for parental care is expanded to include grandparents.

The latter would cover medical treatment, homecare nursing and daycare centres, and dental treatment.

People with disabilities, their spouses, and their parents are eligible to claim additional tax relief, with an increase ranging from RM1,000 to RM2,000 compared to the existing tax reliefs.

Tax relief for homeowners

First-time homeowners are eligible for tax relief up to RM7,000 per year on interest payments for houses priced up to RM500,000, and RM5,000 per year on houses priced above RM500,000 up to RM750,000.

This is only applicable for residential homes with sales and purchase agreements executed from Jan 1, 2025, until Dec 31, 2027, and the relief is applicable for three consecutive years starting from the year the housing loan interest is paid.

The property must also not be used to generate any income.

For those looking to compost their food waste at home, the existing RM2,500 tax relief for electric vehicle charging equipment is expanded to cover food waste composting machines for household use.

This relief is available from 2025 until 2027, and may only be claimed once within the three years of assessment.

For employers, the government is giving additional incentives to implement flexible work arrangements, provide caregiving leave benefits for employees caring for children and ill or disabled family members, and to hire women returning to work.

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