Real Property Gains Tax (RPGT) Calculation | RPGT Exemption
What is Real Property Gains Tax (RPGT)

What is Real Property Gains Tax (RPGT)?

It is a tax charged on the profit earned from the selling of chargeable assets. Chargeable assets include houses, lands, condominiums and also shares in real property companies.

What is Real Property Gains Tax (RPGT) ?

It is a tax charged on the profit earned from the selling of chargeable assets. Chargeable assets include houses, lands, condominiums and also shares in real property companies.

How is RPGT Calculated?

It is computed based on the capital gains from the disposal of chargeable assets

Capital Gain = (Disposal Price – Acquisition Price of Real Property) x RPGT Rate

RPGT Rates can range form 5% to 30%.
The longer the chargeable assets are held, the lower the RPGT Rate.

When to pay RPGT?

You must submit the RPGT return within 60 days of the disposal date. Any later than 60 days, you will receive a penalty of 10% on top of everything else.

Real Property Gains Tax (RPGT) Malaysia

How to file RPGT?

RPGT is commonly filed through lawyers but if you want to do it by yourself, these are the documents that you need to fill in:
  1. Prepare the Disposal of Real Property form (CKHT 1A), Sales and Purchase Agreement (SPA), and supporting documents for the deductions that you plan to make.
  2. To apply for exemptions, you must fill in the Notification under Section 27 in RPGTA 1976 (CKHT 3) form.
  3. The buyer of your property must fill out the Acquisition of Real Property form (CKHT 4) along with the Sales and Purchase Agreement (SPA).
  4. Finally, all forms and submitting documents are to be submitted to the nearest IRB (LHDN) branch within 60 days of the sale.

What is RPGT Rate for individual, Foreigner (Non-Citizen), or Companies?

1) RPGT Rate for Malaysian citizens and Permanent Residents:

Malaysian citizens and permanent residents who sell their property within the first 5 years are subjected to RPGT.

Malaysian will be charged 5% of property taxes after the fifth year according to Budget 2019 RPGT updates.

Period of Ownership RPGT Rate
0-3 Years 30%
3-4 Years 20%
4-5 Years 15%
5+ Years 5%

2) RPGT Rate for Foreigners and Non-Citizens:

Foreigners will be charged 10% RPGT when they sell their property 5 years after purchasing it.

If they sell it before 5 years a 30% RPGT will be imposed.

Period of Ownership RPGT Rate
0-5 Years 30%
5+ Years 10%

3) RPGT Rate for Companies:

Companies are charged RPGT when 75% of their tangible assets include real estate.
Period of Ownership RPGT Rate
0-3 Years 30%
3-4 Years 20%
4-5 Years 15%
5+ Years 10%
Real Property Gains Tax (RPGT) Exemptions

RPGT Exemptions?

Malaysian Citizens and Permanent Residents RPGT exemptions:

  • One-time exemption on any chargeable gain from disposal of private residence. Private residents are a building or part of a building that is owned by an individual or utilised as a place of living. RM10,000 or 10% exemption of the chargeable gain (whichever amount is greater)
  • Exemption when property is transferred within the family between parent, wife, child or grandparent and grandchild. Does not include transfers between siblings. 100% exemption.

RPGT Exemptions for Malaysians ONLY:

  • Exemption of RPGT for the disposal of residential properties within the period of 1st June 2020 to 31st December 2021. 100% tax exemption on the chargeable gain. This exemption is limited to the disposal of three units of residential homes per individual.
  • Exemption on the disposal of low cost residential homes worth RM200,000 and below, in the 6th and following years. 100% exemption.

What is "Allowable Loss", can i offset against rGPT of next property ?

The term “allowable loss” is often associated with RPGT. What is allowable loss? Allowable loss can be applied when more than 1 property is sold by the same owner within the same tax year.

If money is loss in the sales of property A, you can use the loss to offset the profit made from the sales of property B.

What is "Allowable Expenses" in RGPT Calculation ?

Allowable expenses is the money that you have spent on the improvement or maintenance of a property to retain or increase its value.

Enhancement works : Refurbishments, extensions, improvement works. Such expenses can be used to offset your sales profit.

Preservation works: If your landed property is a heritage building and money was spent on maintaining the appearance of the building, the expenses can be used to offset the taxable profit from your sales.

Updates on RPGT in Budget 2020:

In Budget 2020, the base year on which RPGT is assessed against has been shifted from 1 January 2000 to 1 January 2013.

This means that if you have purchased a house before January 2013, the value of the property is assessed against the estimated value of the property on 2013 and not the actual date of purchase of your property.

This means that the tax that you have to pay is lower.

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