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Real Property Gains Tax (RPGT)

RPGT stands for Real Property Gain Tax is a form of Capital Gain Tax that is imposed on the disposal of property in Malaysia.

Based on the Real Property Gain Tax Act 1976, RPGT is a tax on chargeable gains derived from the disposal of property. A chargeable gain is a profit when the disposal price is more than the purchase price of the property.

Home seller/owner will be only be taxed on the positive net capital gains which are disposal price, minus the purchased price, minus the miscellaneous charges such as; (stamp duty, legal fees, advertisement charges, etc).

Additionally, a waiver on the taxable amount is granted to individuals (but not companies). The holding period is from the date on the S&P agreement till to the disposal date.

For a simple and quick calculation, the formula is:

Chargeable Gain = Disposal Price – Purchased Price

Net Chargeable Gain  = Chargeable gain – Cost (Agency fee, Legal fee and Renovation fee, etc..)

Tax payable = RPGT rate (based on holding period)* Net Chargeable Gain

  Holding Period                  RPGT Rate in 2020
  Company     Citizens     Non-Citizens  
   ~ 3 years       30%      30%          30%
    4 years       20%      20%          30%
    5 years       15%      15%          30%
    6 years ~       10%        5%          10%

 

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