What is Real Property Gains Tax (RPGT)
Real Property Gains Tax (RPGT) is a levy imposed by the Malaysian government on profits derived from the sale of real estate assets. The tax rate is contingent upon the duration for which the property has been held by the owner.
As of January 1, 2022, individuals who are Malaysian citizens or permanent residents are exempt from RPGT when disposing of properties held for more than five years. This adjustment reduces the RPGT rate to 0% for such disposals, a change introduced in Budget 2022.
RPGT Rates for Malaysian Citizens and Permanent Residents:
Property held for up to 3 years: 30%
Property held for 4 years: 20%
Property held for 5 years: 15%
Property held for more than 5 years: 0%
RPGT Rates for Non-Citizens and Companies:
Property held for up to 5 years: 30%
Property held for more than 5 years: 10%
Calculating RPGT:
To determine the chargeable gain:
Selling Price minus Purchase Price
Subtract any Allowable Expenses, such as legal fees, stamp duty, and renovation costs.
Example Calculation:
If an individual sells a property after 4 years:
Purchase Price: RM500,000
Selling Price: RM700,000
Allowable Expenses: RM20,000
Chargeable Gain:
RM700,000 (Selling Price) - RM500,000 (Purchase Price) = RM200,000
RM200,000 - RM20,000 (Allowable Expenses) = RM180,000
For a property held for 4 years, the RPGT rate is 20%.
RPGT Payable:
RM180,000 x 20% = RM36,000
Exemptions:
One-time exemption for Malaysian citizens or permanent residents on gains from the disposal of a private residence.
Transfers between family members, such as spouses, parents, and children, are exempt from RPGT.
It's essential to stay updated with the latest regulations, as tax policies can change. For comprehensive details, refer to official resources or consult with tax professionals.
