Paying a carer for your parents or grandparents? Budget 2027 proposes tax relief even for non-medical care

Malaysian taxpayers who pay for care services for their parents or grandparents may soon be able to claim tax relief for non-medical care, according to a proposal in Budget 2027. Currently, the government allows a maximum RM8,000 tax relief for medical treatments and care services at clinics, hospitals, day care centres, and residential care centres.

However, the proposed change would allow tax relief for all types of care expenses, such as home care and day care, without requiring verification from a registered medical practitioner. The proposed change would commence from the year of assessment 2027, and taxpayers would still need to provide a carer's written declaration or a copy of the carer's work permit along with receipts.

Additionally, the government plans to reduce the service tax for care centre services for older persons from eight percent to six percent, starting from January 2027. Care centres that charge less than RM96,000 annually per older person would be exempt from service tax altogether.