The Real Property Gains Tax (RPGT) in Malaysia is a tax imposed on the profit made from selling real estate. Governed by the Real Property Gains Tax Act 1976, RPGT rates and calculation methods depend on the duration of property ownership and the seller's status. Below is the latest guide to RPGT calculations and policies (as of the end of 2024).
RPGT Calculation Formula
Taxable Gains = Disposal Price – Acquisition Price – Allowable Expenses
Disposal Price : The actual selling price of the property.
Acquisition Price : The original purchase price of the property.
Allowable Expenses : Expenses related to the property, such as:
Stamp duty on acquisition
Legal fees
Renovation costs that enhance the property’s value
Real estate agent fees and other related costs during disposal
Tax Payable = Taxable Gains × RPGT Rate
RPGT Rates (2024 Updates)
Holding Period | Malaysian Citizen / PR | Company | Foreigner |
1st to 3rd year sale | 30% | 30% | 30% |
4th year sale | 20% | 20% | 30% |
5th year sale | 15% | 15% | 30% |
6th year and beyond | 0% | 10% | 10% |
RPGT Exemptions
Once-in-a-Lifetime Exemption
Each Malaysian citizen is entitled to a one-time RPGT exemption for selling a residential property.
Both spouses can claim this exemption separately.
Family Transfers
Transfers between immediate family members (e.g., parents to children) are exempt from RPGT.
Gains Below RM 200,000
For taxable gains under RM 200,000, partial exemptions may apply.
Example of RPGT Calculation
Scenario:
Property Purchase Price: RM 500,000
Selling Price: RM 700,000
Holding Period: 3 years
Allowable Expenses: RM 20,000
Steps:
Taxable Gains = RM 700,000 (Selling Price) – RM 500,000 (Purchase Price) – RM 20,000 (Allowable Expenses) = RM 180,000
Tax Payable = RM 180,000 × 30% = RM 54,000
Recent Policy Changes (2024 Updates)
Properties Held for 6 Years or More:
Malaysian citizens and permanent residents are exempt from RPGT when selling properties held for 6 years or longer.
Foreigners and companies are subject to a 10% RPGT.
Expanded Exemptions:
The government may introduce broader exemptions to encourage market activity and liquidity.
Filing and Payment Process:
Sellers must submit the CKHT-1A form to the Inland Revenue Board of Malaysia (LHDN) within 60 days of the sale.
Buyers must submit the CKHT-2A form and withhold 3% of the disposal price as an RPGT prepayment.
Summary
RPGT is a crucial consideration in Malaysian property transactions, particularly for short-term ownership, where tax rates are higher. Familiarity with the latest rates and exemptions allows sellers to plan their property sales more effectively. Before selling a property, it is advisable to consult with a tax advisor or lawyer to ensure compliance and minimize tax liabilities.